Promissory Note Payable to Related Parties |
6 Months Ended |
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Jun. 30, 2025 | |
| Related Party Transactions [Abstract] | |
| Promissory Note Payable to Related Parties | Promissory Note Payable to Related Parties December 2022 Promissory Notes On December 6, 2022, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”), with Mr. Duggan and Dr. Zanganeh, pursuant to which the Company agreed to sell to each of Mr. Duggan and Dr. Zanganeh unsecured promissory notes in the aggregate amount of $520,000. Pursuant to the Note Purchase Agreement, the Company issued to Mr. Duggan and Dr. Zanganeh unsecured promissory notes in the amount of $400,000 (the “Duggan February Note”) and $20,000 (the “Zanganeh Note”), respectively, which matured and became due on February 15, 2023 and an unsecured promissory note to Mr. Duggan in the amount of $100,000 (the “Duggan September Note” and together with the Duggan February Note and the Zanganeh Note, the “December 2022 Notes”), which was originally due on September 15, 2023. The maturity dates of the December 2022 Notes could have been extended one or more times at the Company’s election, but in no event to a date later than September 6, 2024. In addition, if the Company consummated a public offering, then upon the later to occur of (i) business days after the Company receives the net cash proceeds therefrom or (ii) May 15, 2023, the Duggan February Note and the Zanganeh Note were to be prepaid by an amount equal to the lesser of (a) 100% of the amount of the net proceeds of such offering and (b) the outstanding principal amount on such Notes. On January 19, 2023, the Company provided notice to extend the term of the Duggan February Note and Duggan September Note to a maturity date of September 6, 2024. Furthermore, on January 19, 2023, the Company and Mr. Duggan rectified the Duggan February Note and Duggan September Note in order to correctly reflect the parties’ intent that the Company may only prepay (i) the Duggan February Note following the completion of a public rights offering to be conducted by Summit in the approximate amount of $500,000, or a similar capital raise, in an amount equal to the lesser of (x) the net proceeds of the rights offering or such capital raise or (y) the full amount outstanding of the Duggan February Note, and (ii) Duggan September Note following the completion of a capital raising transaction subsequent to the rights offering in an amount equal to the lesser of (A) the net proceeds of such capital raise or (B) the full amount outstanding of the Duggan September Note. Following the issuance of the two new Promissory Notes (the “Revised Duggan February Note” and the “Revised Duggan September Note”, respectively), the Duggan February Note and Duggan September Note were marked as “cancelled” on their face and replaced in their entirety by the Revised Duggan February Note and the Revised Duggan September Note (together with the Zanganeh Note, the “Notes”). On February 15, 2023, the $20,000 Zanganeh Note matured and the Company repaid the outstanding principal balance. In connection with the closing of the rights offering in 2023 (the “2023 Rights Offering”), the $400,000 Revised Duggan February Note matured and became due, and the Company repaid all principal and accrued interest thereunder using a combination of a portion of the cash proceeds from the 2023 Rights Offering and the extinguishment of a portion of the amount due equal to the subscription price of shares subscribed by Mr. Duggan in the 2023 Rights Offering. The Notes accrued interest at an initial rate of 7.5%. All interest on the Notes was paid on the date of signing for the period through February 15, 2023. Such prepaid interest was paid in a number of shares of the Company’s common stock, par value $0.01 (“Common Stock”) equal to the dollar amount of such prepaid interest, divided by $0.7913 (the consolidated closing bid price immediately preceding the time the Company entered into the Note Purchase Agreement, plus $0.01), which was 9,720,291 shares. For all applicable periods following February 15, 2023, interest accrued on the outstanding principal balance of the Notes at the U.S. prime interest rate, as reported in the Wall Street Journal, plus 50 basis points, as adjusted monthly, for three months immediately following February 15, 2023, and thereafter at the U.S. prime rate plus 300 basis points, as adjusted monthly. Accrued interest was paid in cash, quarterly in arrears, on each of March 31, June 30, September 30 and December 31. Debt issuance costs associated with the Notes were $44 and were capitalized as part of the carrying value of the promissory notes payable to related parties. On February 17, 2024, the Revised Duggan February Note was amended to extend the maturity date from September 6, 2024 to April 1, 2025. For all applicable periods commencing February 17, 2024, interest accrued on the outstanding principal balance at the greater of 12% or the U.S. prime interest rate, as reported in the Wall Street Journal plus 350 basis points, as adjusted monthly, and compounded quarterly. Interest was paid upon maturity of the loan. The debt discount was amortized to interest expense using an effective interest rate method. The effective interest rate of the Revised Duggan February Note and Zanganeh Note was 8.9% and the effective interest rate of the Revised Duggan September Note was 11.3%. On September 16, 2024, the Company used some of the proceeds raised from the September 2024 Private Placement (see Note 10 for further details) to repay $75,500 in principal on the Revised Duggan September Note. On October 1, 2024, the Company repaid the remaining outstanding balance of the Revised Duggan September Note in full, resulting in principal payments of $24,500 and accrued cash interest of $7,305. As of June 30, 2025 and December 31, 2024, the Company had no debt. During the three and six months ended June 30, 2025, the Company incurred no interest expense. During the three and six months ended June 30, 2024, the Company incurred interest expense of $3,102 and $6,223, respectively, related to the Revised Duggan September Note. Related Party Transactions Leases July 25, 2022 First Amendment to Sublease Agreement with Maky Zanganeh and Associates, Inc. On July 25, 2022 the Company entered into a first amendment, dated July 19, 2022, to its existing sublease agreement with Maky Zanganeh and Associates, Inc. (“MZA”), an entity owned by Maky Zanganeh, consisting of 4,500 square feet of office space at 2882 Sand Hill Road, Menlo Park, California. The existing sublease term, which was set to expire on September 30, 2022, was extended for a period of thirty-nine months from October 1, 2022 through December 31, 2025. The rent payable under the terms of the sublease is equivalent to the proportionate share of the net payable by MZA to the third-party landlord, based on the square footage of office space sublet by the Company, and no mark-up has been applied. The agreement was further amended to include additional space, as noted below under the August 2, 2024 Third Amendment to Sublease Agreement with Maky Zanganeh and Associates, Inc. During the three and six months ended June 30, 2025, payments of $207 and $414, respectively, were made pursuant to the first and third amendments to the Sublease Agreement. During the three and six months ended June 30, 2024, payments of $195 and $390, respectively, were made pursuant to the first amendment to the Sublease Agreement. July 29, 2022 Second Amendment to Sublease Agreement with Maky Zanganeh and Associates, Inc. On July 29, 2022, the Company entered into a second amendment to its existing sublease agreement with MZA, described above. The second amendment was effective as of August 1, 2022 and expires on December 31, 2025. The second amendment includes an additional 1,277 square feet of office space at 2882 Sand Hill Road, Menlo Park, California. The rent payable under the terms of the sublease is equivalent to the proportionate share of the net payable by MZA to the third-party landlord, based on the square footage of office space sublet by the Company, and no mark-up has been applied. During the three and six months ended June 30, 2025, payments of $57 and $114, were made pursuant to the second amendment to the Sublease Agreement. During the three and six months ended June 30, 2024, payments of $55 and $110, were made pursuant to the second amendment to the Sublease Agreement. April 1, 2024 Miami Sublease Agreements On April 1, 2024, the Company entered into two sublease agreements of its Miami headquarters location, one with Genius 24C Inc. (“Genius”), an affiliate of the Company’s Co-CEO, Robert W. Duggan (the “Genius Sublease Agreement”) and one with Duggan Investments Research LLC (“Investments Research”), also an affiliate of the Company's Co-CEO, Robert W. Duggan (the “Investments Research Sublease Agreement”). Pursuant to the Genius Sublease Agreement, Genius sublet from the Company 848 square feet of office space in the Miami HQ for a sixty-two month term for total rental payments of approximately $446. Pursuant to the Investments Research Sublease Agreement, Investments Research sublet from the Company 848 square feet of office space in the Miami HQ for a sixty-two month term for total rental payments of approximately $446. For the three and six months ended June 30, 2025, the Company recognized sublease income of $46 and $94, respectively, which was recorded net of operating lease expenses. For the three and six months ended June 30, 2024, the Company recognized $48 of sublease income recorded net of operating lease expense and $48 recognized in other receivables on the unaudited condensed consolidated balance sheet as of June 30, 2024. August 2, 2024 Third Amendment to Sublease Agreement with Maky Zanganeh and Associates, Inc. On August 2, 2024, the Company entered into a third amendment to its existing sublease agreement with MZA. The third amendment was effective August 1, 2024 and included an additional space of 145 square feet of office space located at 2882 Sand Hill Road, Menlo Park, California. The Company continues to be obligated to pay its proportionate share of the net payable by MZA to the third-party landlord, which is revised to 93.6% as of the effective date, based on the square footage of office space sublet by the landlord. Promissory Note Payable to Related Parties Refer to Note 9 for disclosure of the promissory note payable to related parties issued December 6, 2022 and fully repaid as of October 1, 2024. Akeso Agreements Upon the closing of the License Agreement, the Board appointed Dr. Yu (Michelle) Xia to serve as a member of the Board pursuant to the terms of the License Agreement. Dr. Xia is the founder of Akeso, and has been the chairwoman, president and CEO of Akeso since its inception in 2012. Furthermore, in connection with the License Agreement, the Company also entered into a Supply Agreement with Akeso, pursuant to which Summit agreed to purchase a certain portion of drug substance for clinical and commercial supply (the “Supply Agreement”). Refer to Note 4 for details on the License Agreement and Second Amendment. In addition to the License and Second Amendment and supply agreements, the Company also entered into various clinical services agreements with Akeso. During the three and six months ended June 30, 2025, the Company paid $14,000 and $18,743 to Akeso. For the three and six months ended June 30, 2024, the Company paid $944 and $10,125 to Akeso. As of June 30, 2025 and December 31, 2024, the Company included in accrued expenses, related to Akeso, $3,366 and $3,956, respectively. Private Placements September 2024 PIPE On September 11, 2024, the Company's Section 16 officers participated in the “September 2024 Purchase Agreements” along with multiple leading biotech institutional investors, whereby the Company sold an aggregate of 10,352,418 shares of the Company’s Common Stock, at a price per share of $22.70, which was the closing price of the Common Stock on September 11, 2024, for an aggregate gross proceeds to the Company of approximately $235,000. The Company’s Co-CEO and Chairman of the Board, Mr. Robert W. Duggan, purchased 3,325,991 shares for an aggregate purchase price of $75,500; Co-CEO, President and member of its Board, Dr. Mahkam Zanganeh, purchased 44,052 shares for an aggregate purchase price of $1,000; COO and CFO, Manmeet S. Soni, purchased 44,052 shares for an aggregate purchase price of $1,000, and member of the Board, Jeff Huber, through his controlled entity, Caspian Capital LLC, purchased 44,052 shares for an aggregate purchase price of $1,000. The Company sold a total of 3,458,147 shares of its Common Stock to the aforementioned Section 16 officers for an aggregate purchase price of $78,500. The Company used some of the proceeds raised from the September 2024 Private Placement to repay $75,500 in principal on the Duggan September Note. Refer to Note 9 for additional details regarding the promissory note payable to a related party. Warrants Exercise In March 2025, Mr. Duggan, our Co-Chief Executive Officer, exercised 2,936,221 of the 3,985,055 warrants which he received in connection with a private placement completed by the Company with Mr. Duggan and other investors on December 24, 2019, resulting in the purchase of 2,936,221 shares of common stock at an exercise price of $1.58. On April 8, 2025, Mr. Duggan completed the exercise of the remaining warrants received in the December 24, 2019 private placement, resulting in the purchase of 1,048,834 shares of common stock at an exercise price of $1.58. Professional Services During the six months ended June 30, 2025, the Company engaged the law firm Wilson Sonsini Goodrich & Rosati P.C. (“WSGR”), where Mr. Kenneth A. Clark, a member of the Board, is a partner. Payments to be made by the Company to WSGR were approved by the Audit Committee in accordance with its Related Party Transaction Policy. For the three and six months ended June 30, 2025, the Company incurred expenses for legal services rendered by WSGR totaling approximately $0.4 million and $0.6 million, respectively.
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