Exhibit 99.1

LAVA THERAPEUTICS N.V.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

	Page
Condensed Consolidated Interim Statements of Profit and Loss and Comprehensive Profit and Loss (unaudited)	2
Condensed Consolidated Interim Statements of Financial Position (unaudited)	3
Condensed Consolidated Interim Statements of Changes in Equity (unaudited)	4
Condensed Consolidated Interim Statements of Cash Flows (unaudited)	6
Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	7

LAVA Therapeutics N.V.

Condensed Consolidated Interim Statements of Profit and Loss

and Comprehensive Profit and Loss

(in thousands, except share and per share amounts) (unaudited)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	Notes	2023		2022		2023		2022
Revenue from contracts with customers	6	$	53	$	15,261	$	6,416	$	16,751
Cost of sales of goods	6		—		—		(2,546)		—
Cost of providing services	6		(10)		—		(782)		—
Gross profit			43		15,261		3,088		16,751
Operating expenses:
Research and development	7		(7,912)		(13,697)		(30,454)		(29,565)
General and administrative	8		(2,858)		(3,135)		(10,445)		(10,545)
Total operating expenses			(10,770)		(16,832)		(40,899)		(40,110)
Operating loss			(10,727)		(1,571)		(37,811)		(23,359)
Interest income (expense), net			809		39		2,124		(214)
Foreign currency exchange gain, net			1,132		2,515		429		6,763
Total non-operating income			1,941		2,554		2,553		6,549
(Loss) Profit before income tax			(8,786)		983		(35,258)		(16,810)
Income tax expense			(50)		(47)		(218)		(182)
(Loss) Profit for the period		$	(8,836)	$	936	$	(35,476)	$	(16,992)
Items that may be reclassified to profit or loss
Foreign currency translation adjustment			(1,385)		(5,359)		(82)		(14,220)
Total comprehensive loss		$	(10,221)	$	(4,423)	$	(35,558)	$	(31,212)
(Loss) Profit per share:
(Loss) Profit per share, basic		$	(0.34)	$	0.04	$	(1.35)	$	(0.66)
Weighted-average common shares outstanding, basic			26,289,087		25,845,802		26,289,087		25,800,973
(Loss) Profit per share, diluted		$	(0.34)	$	0.04	$	(1.35)	$	(0.66)
Weighted-average common shares outstanding, diluted			26,289,087		26,446,259		26,289,087		25,800,973

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

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LAVA Therapeutics N.V.

Condensed Consolidated Interim Statements of Financial Position

(in thousands) (unaudited)

		September 30,		December 31,
	Notes	2023		2022
Assets
Non-current assets:
Property and equipment, net		$	1,715	$	1,432
Right-of-use assets			1,062		651
Other non-current assets and security deposits			326		809
Total non-current assets			3,103		2,892
Current assets:
Receivables and other			1,077		3,254
Prepaid expenses and other current assets			1,906		4,411
VAT receivable			307		—
Investments	10		41,964		32,535
Cash and cash equivalents			62,663		100,333
Total current assets			107,917		140,533
Total assets		$	111,020	$	143,425
Equity and Liabilities
Equity:
Share capital	4	$	3,715	$	3,715
Equity-settled employee benefits reserve	9		11,421		8,942
Foreign currency translation reserve			(13,054)		(12,972)
Additional paid-in capital			194,424		194,424
Accumulated deficit	9		(141,910)		(108,069)
Total equity			54,596		86,040
Non-current liabilities:
Deferred revenue	6		35,000		35,000
Lease liabilities			671		431
Total non-current liabilities			35,671		35,431
Current liabilities:
Trade payables and other			9,384		3,965
VAT payable			—		45
Borrowings			4,944		4,640
Lease liabilities			580		379
License liabilities	5		—		4,732
Accrued expenses and other current liabilities	11		5,845		8,193
Total current liabilities			20,753		21,954
Total liabilities			56,424		57,385
Total equity and liabilities		$	111,020	$	143,425

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

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LAVA Therapeutics N.V.

Condensed Consolidated Interim Statements of Changes in Equity

(in thousands, except share amounts) (unaudited)

					Equity-
					settled		Foreign
					employee		currency
		Common	Share		benefits		translation				Accumulated
	Note	shares	capital		reserves		reserve		APIC		deficit		Total
Balance at June 30, 2023		26,289,087	$	3,715	$	12,132	$	(11,669)	$	194,424	$	(134,709)	$	63,893
Loss for the period		—		—		—		—		—		(8,836)		(8,836)
Foreign currency translation adjustment		—		—		—		(1,385)		—		—		(1,385)
Forfeited options	9	—		—		(1,635)		—		—		1,635		—
Share-based compensation expense	9	—		—		924		—		—		—		924
Balance at September 30, 2023		26,289,087	$	3,715	$	11,421	$	(13,054)	$	194,424	$	(141,910)	$	54,596

					Equity-
					settled		Foreign
					employee		currency
		Common	Share		benefits		translation				Accumulated
	Note	shares	capital		reserves		reserve		APIC		deficit		Total
Balance at January 1, 2023		26,289,087	$	3,715	$	8,942	$	(12,972)	$	194,424	$	(108,069)	$	86,040
Loss for the period		—		—		—		—		—		(35,476)		(35,476)
Foreign currency translation adjustment		—		—		—		(82)		—		—		(82)
Forfeited options	9	—		—		(1,635)		—		—		1,635		—
Share-based compensation expense	9	—		—		4,114		—		—		—		4,114
Balance at September 30, 2023		26,289,087	$	3,715	$	11,421	$	(13,054)	$	194,424	$	(141,910)	$	54,596

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					Equity-
					settled		Foreign
					employee		currency
		Common	Share		benefits		translation				Accumulated
	Note	shares	capital		reserves		reserve		APIC		deficit		Total
Balance at June 30, 2022		25,797,735	$	3,656	$	7,275	$	(15,085)	$	192,282	$	(94,090)	$	94,038
Profit for the period		—		—		—		—		—		936		936
Issuance of VUmc common stock	5	491,352		59		—		—		2,142		—		2,201
Foreign currency translation adjustment		—		—		—		(5,359)		—		—		(5,359)
Share-based compensation expense	9	—		—		841		—		—		—		841
Balance at September 30, 2022		26,289,087	$	3,715	$	8,116	$	(20,444)	$	194,424	$	(93,154)	$	92,657

					Equity-
					settled		Foreign
					employee		currency
		Common	Share		benefits		translation				Accumulated
	Note	shares	capital		reserves		reserve			APIC	deficit		Total
Balance at January 1, 2022		25,775,538	$	3,653	$	4,829	$	(6,223)	$	192,270	$	(76,162)	$	118,367
Loss for the period		—		—		—		—		—		(16,992)		(16,992)
Option Exercise		22,197		3		—		—		12		—		15
Issuance of VUmc common stock	5	491,352		59		—		—		2,142		—		2,201
Foreign currency translation adjustment		—		—		—		(14,221)		—		—		(14,221)
Share-based compensation expense	9	—		—		3,287		—		—		—		3,287
Balance at September 30, 2022		26,289,087	$	3,715	$	8,116	$	(20,444)	$	194,424	$	(93,154)	$	92,657

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

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LAVA Therapeutics N.V.

Condensed Consolidated Interim Statements of Cash Flows

(in thousands) (unaudited)

		Nine Months Ended September 30,
	Notes	2023		2022
Cash flows from operating activities:
Loss before income tax		$	(35,258)	$	(16,810)
Adjusted for:
Depreciation and amortization of non-current assets			433		315
Foreign currency exchange gain, net			(429)		(6,763)
Depreciation of right-of-use assets			493		195
Share-based compensation expense	9		4,114		3,287
Income tax expense			(219)		(181)
Amortization of premium on investments			(1,211)		135
Changes in working capital:
Receivables and other			2,146		(50,227)
VAT payable			(351)		154
Prepaid expenses and other assets			2,939		(1,169)
Trade accounts payable and other			5,448		5,107
Deferred offering & financing costs			—		(106)
Deferred revenue	6		—		33,510
License liabilities			(4,685)		(2,828)
Other liabilities			(2,272)		3,689
Net cash used in operating activities			(28,852)		(31,692)
Cash flows from investing activities:
Purchases of property and equipment			(730)		(322)
Purchases of investments			(53,895)		(46,548)
Maturities of investments			45,677		60,355
Net cash (used in) provided by investing activities			(8,948)		13,485
Cash flows from financing activities:
Proceeds from option exercises			—		15
Proceeds from borrowings			345		509
Payment of principal portion of lease liabilities			(736)		(225)
Net cash (used in) provided by financing activities			(391)		299
Net decrease in cash and cash equivalents			(38,191)		(17,908)
Cash and cash equivalents at beginning of period			100,333		90,869
Effects of exchange rate changes on cash and cash equivalents			521		(8,629)
Cash and cash equivalents at end of period		$	62,663	$	64,332
Supplemental schedule of noncash operating and financing activities:
Issuance of 491,352 common shares to VUmc in lieu of payment for license liabilities	5	$	—	$	2,201

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

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LAVA Therapeutics N.V.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

Note 1—General Information

LAVA Therapeutics N.V., together with its subsidiary, is a clinical-stage immuno-oncology company focused on developing its proprietary Gammabody® platform of bispecific gamma-delta T cell engagers to transform the treatment of cancer. Using its Gammabody platform, the Company is developing a portfolio of novel bispecific antibodies designed to engage and leverage the potency and precision of gamma-delta (gd) T cells to elicit a robust, anti-tumor immune response and improve outcomes for cancer patients. LAVA Therapeutics N.V. was incorporated in 2016 and is headquartered in Utrecht, the Netherlands. Unless the context otherwise requires, references to the “Company,” “we,” “us” and “our” refer to LAVA Therapeutics N.V. and its subsidiary.

In connection with becoming a public company, on March 29, 2021, the Company converted from “LAVA Therapeutics, B.V.” to “LAVA Therapeutics N.V.” The address of the Company’s registered office is Yalelaan 62, 3584 CM Utrecht, the Netherlands. The Company’s common shares are listed for trading under the symbol “LVTX” on The Nasdaq Global Select Market.

The Audit Committee of the Company’s Board of Directors approved these unaudited condensed consolidated interim financial statements on November 14, 2023.

Note 2—Summary of Significant Accounting Policies

Basis of preparation

The unaudited condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) have been condensed or omitted. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2022 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board and are included on Form 20-F filed by the Company on April 11, 2023.

The accounting policies applied are consistent with those of the previous financial year. A description of our accounting policies is provided in the Accounting Policies section of the audited consolidated financial statements as of, and for the years ended, December 31, 2022 and 2021, included on Form 20-F filed by the Company on April 11, 2023.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the unaudited condensed consolidated interim financial statements are disclosed in Note 3. The interim financial data as of September 30, 2023 and 2022, and for the three and nine months ended September 30, 2023 and 2022 are unaudited. In the opinion of management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary to a fair statement of the results for the interim periods.

License Revenue

We may enter into collaboration and licensing arrangements for research and development, manufacturing, and commercialization activities with counterparties for the development and

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commercialization of our product candidates. These arrangements may contain multiple components, such as (i) licenses, (ii) research and development activities, and (iii) the manufacturing of certain material. Payments pursuant to these arrangements may include non-refundable and refundable payments, payments upon the achievement of significant regulatory, development and commercial milestones, sales of product at certain agreed-upon amounts, and royalties on product sales.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under a collaboration agreement, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation.

We must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation, which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates and probabilities of regulatory and commercial success. We also apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time.

Revision of immaterial misstatements

During the year ended December 31, 2022, the Company identified misstatements in its historical accounting for share-based compensation expenses in the condensed consolidated interim financial statements for certain prior periods. Management evaluated the misstatements and concluded that they were immaterial, either individually or in the aggregate, to its current or previously issued consolidated financial statements. As a result, certain comparative amounts in the consolidated statements of profit and loss and comprehensive profit and loss, financial position, changes in equity and cash flows have been revised to correct for such immaterial misstatements with respect to share-based compensation expenses. Such revisions and their impact are disclosed more fully in Note 12, “Revision of Immaterial Misstatements.”

Going concern

These condensed consolidated interim financial statements have been prepared by management on the assumption that the Company will be able to continue as a going concern, which presumes that the Company will, for at least the next 12 months, be able to realize its assets and discharge its liabilities in the normal course of business.

Through September 30, 2023, the Company has funded its operations with proceeds from sales of equity, collaboration and licensing agreements, government grants and borrowings under various agreements. Since its inception, the Company has incurred recurring net losses. The Dutch Research and Development Act (WBSO) provides compensation for a part of research and development wages and other costs through a reduction in payroll taxes. WBSO grant amounts are offset against wages and salaries and included in research and development expenses in the condensed consolidated interim statements of profit and loss and comprehensive profit and loss.

As of September 30, 2023, the Company had an accumulated deficit of $141.9 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash, cash equivalents and investments of $104.6 million as of September 30, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months following the issuance of

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these condensed consolidated interim financial statements. Accordingly, the condensed consolidated interim financial statements have been prepared on a going concern basis.

Until we can generate sufficient product revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements. Disruptions in the financial markets in general may make equity and debt financing more difficult to obtain and may have a material adverse effect on our ability to meet our fundraising needs. If we are unable to obtain sufficient funding in a timely manner or on commercially acceptable terms, we may have to delay, reduce the scope of, or eliminate one or more of our operating activities, and consider other cost reduction initiatives, such as downsizing our operations or withholding initiation or expansion of clinical trials or research. In addition, in the event we are not able to generate sufficient funds, we may be unable to continue as a going concern and our business, financial condition and/or results of operations could be materially and adversely affected and could reduce the price of our common shares and we may ultimately go into insolvency. In addition, any perceived or actual inability by us to finance our clinical development activities and other business activities may cause the market price of our common shares to decline.

Cash and cash equivalents

Cash and cash equivalents in the condensed consolidated interim statements of financial position are comprised of cash at banks and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value. Our cash and cash equivalents are held in multiple currencies, primarily in the Euro and United States (U.S.) dollar. Accordingly, our cash balances may be exposed to foreign currency exchange risk.

For the purposes of the condensed consolidated interim statements of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts.

Investments

As of September 30, 2023, we have determined that we have the intent and ability to hold all investments in debt securities until maturity. Accordingly, all investments are recorded at amortized cost on our condensed consolidated interim statements of financial position, with the amortization of bond premiums or discounts and earned interest income recorded in our condensed consolidated interim statements of profit and loss.

Financial instruments

(i) Financial assets

The Company’s financial assets are comprised of cash and cash equivalents, investments, trade and other receivables, security deposits and other current and non-current assets. All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. These financial assets are subsequently measured at amortized cost, which in general, approximates to the fair value. Purchases and sales of financial assets are recognized on the settlement date; the date that the Company receives or delivers the asset. The Company classifies its financial assets primarily as cash and cash equivalents, investments and receivables. Receivables are non-derivative financial assets, with fixed or determinable payments that are not quoted in an active market. They are included in current assets.

Financial assets are derecognized when the rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full.

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(ii) Financial liabilities

The Company’s financial liabilities are comprised of trade and other payables, lease liabilities, and borrowings. All financial liabilities are recognized initially at fair value, adjusted for transaction costs.

After initial recognition, borrowings are subsequently measured at amortized cost using the effective interest method, minus transaction costs that are directly attributable to the financial liability. The effective interest method amortization is included in finance costs in the condensed consolidated interim statements of profit and loss and other comprehensive profit and loss.

Payables and borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Financial liabilities are derecognized when the obligation under the liability is discharged, canceled, or expires.

(iii) Fair value measurements

The Company does not hold any financial assets and financial liabilities other than those measured at amortized cost. Management assessed that the carrying values of the Company’s financial assets and financial liabilities measured at amortized cost are a reasonable approximation of their fair values.

There were no new standards, interpretations, or amendments that became effective in the current reporting period which had an impact on the unaudited condensed consolidated interim financial statements.

Note 3—Significant Accounting Judgments, Estimates and Assumptions

In the application of our accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgments made in the process of applying our accounting policies which have the most significant effect on the amounts recognized in our unaudited condensed consolidated interim financial statements relate to revenue recognition, share-based payments, accruals for clinical trial expenses, lease accounting, and to our research and license agreements.

The key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year, primarily relate to recognition of accruals for manufacturing and clinical trial activities. No significant adjustments to accruals have been recognized during the first nine months of 2023 or 2022, due to conditions that existed as of December 31, 2022 or 2021, respectively. Additionally, there have been no changes to the application of significant accounting estimates, and no impairment losses have been recognized during the first nine months of 2023 or 2022.

The unaudited condensed consolidated interim financial statements do not include all disclosures for critical accounting estimates and judgments that are required in the annual consolidated financial statements and should be read in conjunction with the Company’s audited consolidated financial statements as of, and for the years ended, December 31, 2022 and 2021.

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Note 4—Equity

On March 29, 2021, the Company completed an initial public offering (IPO) of common shares in the U.S. pursuant to its registration statement on Form F-1, as amended (File No. 333-253795). Pursuant to the registration statement, the Company issued and sold 6,700,000 shares of $0.14 par value common shares at a price of $15.00 per share. Net proceeds from the IPO were approximately $88.7 million after deducting underwriting discounts and commissions of $7.0 million and offering costs of $4.5 million.

On April 19, 2021, underwriters of the Company’s IPO consummated the exercise of their option to purchase 425,712 common shares from the Company at the price of $15.00 per share resulting in additional IPO proceeds to the Company of $5.9 million after deducting underwriting discounts and commissions of $0.4 million.

In March 2021, the Company also received $56.6 million in proceeds from the Series C financing, net of repurchasing Series A Preferred shares and common shares. Prior to the IPO in March 2021, all outstanding series of preferred shares were converted to common shares.

The share capital of LAVA Therapeutics N.V. consisted of 26,289,087 issued and outstanding common shares at a nominal value of $0.14 per share as of September 30, 2023.

Note 5—License Liabilities

On February 25, 2021, the license and assignment agreement with Stichting VUmc (VUmc) was restated, due to the Company’s IPO which triggered a $13.1 million payment (VUmc payment). The VUmc payment was calculated as the following:

● The Company shall issue common shares equal to $3.3 million divided by the IPO price and pay $0.2 million in cash, which was executed and paid in 2021; and

● On each of the first and second anniversary of the IPO, the Company shall pay $4.8 million. Such payment shall be made in cash or common shares, at the election of the Company, valued using the closing price of common shares on the date two trading days prior to the respective anniversary of the IPO.

The first of the $4.8 million payments became due to VUmc in March 2022 and was settled through the issuance of 491,352 shares of common stock and $2.4 million in cash in August 2022. The second VUmc IPO anniversary payment became due in March 2023 and payment was made in cash in May 2023. As of September 30, 2023 the Company has no further obligations to VUmc.

Note 6—Revenue and cost of sales

Seagen Agreement

In September 2022, the Company entered into an exclusive worldwide license agreement with Seagen, Inc. (Seagen Agreement) to develop, manufacture and commercialize SGN-EGFRd2 (LAVA-1223), an advanced preclinical asset that utilizes LAVA’s proprietary Gammabody technology to target EGFR-expressing solid tumors. Under the terms of the Seagen Agreement, the Company received a $50.0 million nonrefundable upfront payment in October 2022 and could receive up to approximately $650.0 million in potential development, regulatory and commercial milestones, and royalties ranging from high single-digit to mid-teen percentages on future sales, within a range of less than 10%. The Seagen Agreement also provides Seagen with the opportunity to exclusively negotiate rights to apply LAVA's proprietary Gammabody platform for up to two additional tumor targets, which exclusive rights, if not exercised during a specified period, will expire.

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The Company is entitled to receive tiered royalties based on commercial sales levels from mid-single to double digit percentages of net sales of licensed products. Seagen has also granted us a one-time option to obtain increased royalties if the Company exercises a buy-up option within a certain amount of time from certain key early clinical data becoming available for the first licensed product. The Company has a specified period of time after notice of such buy-up option to pay Seagen a one-time fee of $35.0 million (buy-up fee). In the event the Company exercises the buy-up option and pays the buy-up fee, it is entitled to receive increased future royalty percentages to a range of low double-digit to high mid-teen percentages on future sales, within a range of less than 10%, and certain future milestones will be decreased by 30%.

Royalties are payable on a licensed product-by-licensed product and country-by-country basis beginning with the first commercial sale of such licensed product in such country of sale and expiring ten years after such sale, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products, and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory.

Under the Seagen Agreement, the Company is also entitled to receive reimbursement of up to $6.5 million for certain agreed to research, manufacturing and supply activities, as well as the transfer of all manufacturing-related know-how and materials, including all CMC documentation, data and processes, to enable the manufacture of licensed compounds and products by Seagen. As of September 30, 2023 a cumulative total of $6.2 million reimbursement revenue was recognized.

The Company determined that the Seagen Agreement and the research, manufacturing and supply activities and materials transfer fall within the scope of IFRS 15, Revenue from Contracts with Customers (IFRS 15). In calculating the transaction price, the Company determined the following four performance obligations under the agreement: (i) provide exclusive license; (ii) provide manufacturing technology transfer activities; (iii) provide initial drug supply; and (iv) research activities, including data and support for regulatory submission.

For the three and nine months ended September 30, 2023 and 2022, no changes were made to the allocation of performance obligations to the purchase price. The Company allocated the transaction price to the performance obligations as of September 30, 2023 and 2022 as follows:

			Revenue Recognized		Revenue Recognized		Cumulative Revenue
	Transaction		for the three months		for the nine months		Recognized
(in thousands)	Price		ended September 30, 2023		ended September 30, 2023		as of September 30, 2023
License	$	50,000	$	—	$	—	$	15,165
Manufacturing technology transfer activities		2,167		12		112		2,185
Initial supply		3,583		13		3,287		3,287
Research activities		750		2		23		686
Buy-up fee (*)		(35,000)		—		—		—
	$	21,500	$	27	$	3,422	$	21,323
(*) Buy-up fee remains deferred until option expires or is exercised

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			Revenue Recognized		Revenue Recognized
	Transaction		for the three months		for the nine months		Other assets as of
(in thousands)	Price		ended September 30, 2022		as of September 30, 2022		September 30, 2022
License	$	50,000	$	15,165	$	15,165	$	—
Manufacturing technology transfer activities		2,167		90		90		—
Initial supply		3,583		—		—		2,212
Research activities		750		6		6		—
Buy-up fee (*)		(35,000)		—		—		—
	$	21,500	$	15,261	$	15,261	$	2,212
(*) Buy-up fee remains deferred until option expires or is exercised

For the three and nine months ended September 30, 2023 the revenue primarily relates to the initial supply and manufacturing technology transfer related stability studies. For the three and nine months ended September 30, 2022 revenue of $15.3 million was recognized. Of that amount, $15.2 million related to the nonrefundable upfront payment and $0.1 million related to reimbursement for research and manufacturing technology transfer activities.

Janssen Agreement

Upfront payment

In May 2020, the Company entered into a research collaboration and license agreement (Janssen Agreement) with Janssen Biotech, Inc. (Janssen). As part of the Janssen Agreement, the Company received a non-refundable upfront payment of $8.0 million, which was recognized on a straight-line basis over the two-year term of the research activities under the agreement. Revenues for the three months ended September 30, 2023 and 2022 were zero. Revenues for the nine months ended September 30, 2023 and 2022 were zero and $1.5 million, respectively. These revenues were only related to the straight-line recognition of the upfront payment. The straight-line method of recognition materially approximates the cost to cost method of revenue recognition. As of September 30, 2023, the Company had no remaining deferred revenue related to this payment.

Milestone payment

In May 2023, a milestone payment of $2.5 million from Janssen was triggered under the terms of the Janssen Agreement following the selection of a candidate novel bispecific antibody to engage gamma-delta T cells to an undisclosed tumor associated antigen for the treatment of cancer. Efforts are underway to advance the candidate towards the clinic. This milestone payment was recognized as revenue in the three months ended June 30, 2023 and the payment of the $2.5 million milestone was received in July 2023. No milestone revenue was recognized in the three and nine months ended September 30, 2022.

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Note 7—Research and Development Expenses

Research and development expenses were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Pre-clinical and clinical trial expenses	$	4,899	$	10,943	$	20,542	$	20,926
Personnel-related expenses		1,763		1,296		5,346		4,236
Facilities and other research and development expenses		622		389		1,842		1,101
Research and development activities expenses		325		675		1,297		1,706
Share-based compensation expense		303		394		1,427		1,596
	$	7,912	$	13,697	$	30,454	$	29,565

Note 8—General and Administrative Expenses

General and administrative expenses were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Professional and consultant fees	$	887	$	930	$	2,667	$	2,664
Personnel-related expenses		742		1,047		2,932		3,991
Share-based compensation expense		621		447		2,687		1,691
Insurance, facilities, fees and other related costs		608		711		2,159		2,199
	$	2,858	$	3,135	$	10,445	$	10,545

Note 9—Share-based Awards

As of March 25, 2021, the 2018 Stock Option Plan and the 2020 U.S. Stock Option Plan ceased to have any future shares available, and the Company established the 2021 Long-Term Incentive Option Plan (the Plan) for all its employees, members of the Board of Directors and select external consultants.

Stock Options

There were 5,398,019 stock options outstanding as of September 30, 2023, at a weighted-average exercise price of $3.89 per share. During the three months ended September 30, 2023, no options were granted to employees and 234,322 options were forfeited at a weighted-average exercise price of $5.00 per share as a result of headcount reductions. During the nine months ended September 30, 2023, 857,271 options were granted to employees and nonemployee directors at a weighted-average exercise price of $3.21 per share and 739,383 options were forfeited at a weighted-average exercise price of $4.28 per share.

Total compensation cost recognized for all stock option awards was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	303	$	394	$	1,427	$	1,596
General and administrative		621		447		2,687		1,691
	$	924	$	841	$	4,114	$	3,287

Due to headcount reductions, we recognized a reversal of compensation costs for unvested options during the three months ended September 2023 of $0.3 million. In addition, we transferred $1.6 million from the equity settled employee benefits reserve to accumulated deficit as a result of forfeited vested options. For

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these forfeited vested options there is no longer a requirement for a legal reserve as there are no limitations for distribution within equity.

The fair value of the share options has been measured using the Black-Scholes model. The assumptions used in the measurement of the fair values and the weighted average of the share options granted during the nine months ended September 30, 2023:

		September 30, 2023
Expected annual average volatility		88.3%
Expected life, years		6.08
Fair value of the common share	$	1.42 - 2.92
Exercise price	$	1.90 - 3.86
Dividend yield		—
Risk-free interest rate		3.46% - 4.16%
Weighted average grant date fair value	$	2.43

The Company estimates volatility based on the historical volatility of its peer group. The unrecognized remaining stock-based compensation balance for shares issued from all option plans was approximately $4.4 million as of September 30, 2023, which is expected to amortize over a weighted-average 0.90 years.

Note 10—Investments

Our investments in debt securities consist of investments in U.S. Treasury securities, with maturities ranging from three months to one year. All of these investments are classified as held to maturity and recorded in current assets on our condensed consolidated interim statements of financial position at amortized cost. As of September 30, 2023, the carrying value of our investments was $42 million, which approximates fair value. Given the high-quality ratings of these investments in debt securities, we have not recorded an allowance for credit losses as of September 30, 2023.

Note 11—Restructuring

In June 2023, we announced that the ongoing clinical trial of LAVA-051 targeting the CD1d-expressing hematological tumors, multiple myeloma (MM), chronic lymphocytic leukemia (CLL), and acute myeloid leukemia, is no longer recruiting and would be discontinued after no patients remain on treatment. LAVA-051 was being evaluated in an open-label, multi-center Phase 1/2a clinical trial in patients with relapsed or refractory CLL and MM to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics, immunogenicity, and preliminary anti-tumor activity of LAVA-051. The decision to discontinue LAVA-051’s clinical trial follows a recent review of the competitive landscape that has continued to evolve. The decision was not due to safety concerns. As a result, we accrued an estimated amount of $1.4 million in June 2023 for costs associated with the discontinuation of our clinical trial, contract manufacturing and bioanalytical activities for LAVA-051. Of this accrual, invoices have been received for an amount of $0.7 million in the three months ended September 30, 2023 and the remaining accrual of $0.7 million is recorded in accrued expenses and other current liabilities on our condensed consolidated interim statements of financial position. The Company reviewed the relevant items of its condensed consolidated interim statements of financial position and did not identify any asset that would be subject to impairment as a result of the discontinuation of the clinical trial of LAVA-051.

In August 2023, we finalized a reduction in workforce of approximately 36% in the U.S and the Netherlands to better align the Company’s resources with the Company’s focus on LAVA-1207 and redesigned focus on research and development.  The majority of the charges in connection with the reduction, approximately $0.5 million, was incurred in the three months ended September 30, 2023 and we anticipate the implementation of headcount reductions, including cash payments, will be substantially completed by the end of 2023.

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Note 12 – Revision of Immaterial Misstatements

In connection with the preparation and review of the Company's consolidated interim and year-end financial statements for December 31, 2022, management identified an immaterial misstatement in our historical financial statements related to the accounting for share-based compensation expenses. We incorrectly computed and recorded the share-based compensation expenses due to an error in the calculation of the expense attribution over the vesting period, resulting in an incorrect and accelerated expense being recorded.

In accordance with the guidance set forth in Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) 99, Materiality, and SEC SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financials, the Company concluded the misstatement was not material to the previously issued consolidated financial statements. We adjusted our historical financial statements to revise the immaterial misstatement.

The revision for the share-based compensation expense misstatement did not have an impact on total equity as of September 30, 2023, or any prior periods. As a result of the Company’s immaterial misstatement, net profit for the three months ended September 30, 2022 was overstated $0.1 million and net loss for the nine months ended September 30, 2022 was understated by $0.1 million. Operating expenses for the three and nine months ended September 30, 2022 were both understated by $0.1 million.

In the Condensed Consolidated Interim Statement of Loss and Comprehensive Loss, we have revised the following:

	Three Months Ended						Nine Months Ended
	September 30, 2022						September 30, 2022
(in thousands)	As reported			Adjustment	As revised		As reported			Adjustment	As revised
Research and development expenses	$	(13,675)	$	(22)	$	(13,697)	$	(29,619)	$	54	$	(29,565)
General and administrative expenses	$	(3,096)	$	(39)	$	(3,135)	$	(10,410)	$	(135)	$	(10,545)
Total operating expenses	$	(16,771)	$	(61)	$	(16,832)	$	(40,029)	$	(81)	$	(40,110)
Operating loss	$	(1,510)	$	(61)	$	(1,571)	$	(23,278)	$	(81)	$	(23,359)
Profit (Loss) before income tax	$	1,044	$	(61)	$	983	$	(16,729)	$	(81)	$	(16,810)
Profit (Loss) for the period	$	997	$	(61)	$	936	$	(16,911)	$	(81)	$	(16,992)
Total comprehensive loss	$	(4,362)	$	(61)	$	(4,423)	$	(31,131)	$	(81)	$	(31,212)

In the Condensed Consolidated Interim Statements of Financial Position and Changes in Equity, we have revised the following:

	September 30, 2022
(in thousands)	As reported			Adjustment	As revised
Equity-settled employee benefits reserve	$	8,426	$	(310)	$	8,116
Accumulated deficit	$	(93,463)	$	310	$	(93,153)
Equity:	$	92,658	$	—	$	92,658

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In the Condensed Consolidated Interim Statements of Cash Flows, we have revised the following:

	Nine Months Ended
	September 30, 2022
(in thousands)	As reported			Adjustment	As revised
Loss before income tax	$	(16,729)	$	(81)	$	(16,810)
Share-based compensation expense	$	3,207	$	81	$	3,287
Net cash used in operating activities	$	(31,692)	$	—	$	(31,692)

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