RISK FACTORS

The combined company will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below and those described in the section of this proxy statement/prospectus titled “Forward-Looking Statements” before deciding how to vote your shares of stock. In addition, you should read and consider the risks associated with the business of Spring Bank because these risks may also affect the combined company—these risks can be found in Spring Bank’s Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, all of which are filed with the SEC and incorporated by reference into this proxy statement/prospectus. You should also read and consider the other information in this proxy statement/prospectus and the other documents incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information” in this proxy statement/prospectus.

Risks Related to the Exchange

The Exchange Ratio set forth in the Exchange Agreement is not adjustable based on the market price of Spring Bank common stock, so the Exchange consideration at the Closing may have a greater or lesser value than at the time the Exchange Agreement was signed. As described in the Exchange Agreement, the Exchange Ratio may be adjusted depending on Spring Bank’s net cash at Closing, the timing of Closing, the amount of gross proceeds received in the Pre-Closing Financing and the pre-money valuation attributed to F-star in the Pre-Closing Financing such that the Spring Bank security holders and F-star securityholders may own more or less of the combined company that presented in this proxy statement/prospectus.

At the Closing, the issued and outstanding share capital of F-star will be sold to Spring Bank in exchange for shares of Spring Bank common stock based on the Exchange Ratio. The Exchange Ratio may be adjusted (i) to the extent that Spring Bank’s expected net cash as of Closing is less than $15.0 million or greater than $17.0 million, (ii) to the extent that F-star does not raise at least $25.0 million in the Pre-Closing Financing at a pre-money valuation, or the valuation of F-star prior to receiving any proceeds from the Pre-Closing Financing, of at least $35.0 million, and (iii) to account for the actual proceeds raised in the Pre-Closing Financing. As of                 , 2020, F-star had received commitments from investors to purchase $     million of ordinary shares of F-star in the Pre-Closing Financing. Should the Closing occur after September 30, 2020, the $15.0 million and $17.0 million thresholds will each be reduced by $250,000 on October 30, 2020 and on the last day of each 30-day period thereafter until the Closing occurs. The assumed valuations and Exchange Ratio are likely to change, and the parties currently expect the Closing to occur during the fourth quarter of 2020. These and other adjustments to the Exchange Ratio are described further in this proxy statement/prospectus under the section titled “The Exchange Agreement – Transaction Consideration and Adjustment” and the Exchange Agreement. Immediately following the Closing and assuming an Exchange Ratio of 0.5338 (which assumes both that Spring Bank’s valuation will not be adjusted as a result of its expected net cash at Closing and that F-star raises $25.0 million in the Pre-Closing Financing at a pre-money valuation of at least $35.0 million), the Spring Bank’s securityholders and the holders of F-star’s share capital are expected to own approximately 38.8% and 61.2%, respectively, of the outstanding capital stock of the combined company. However, the Exchange Ratio will be adjusted based on the amount of Spring Bank net cash at Closing, the timing of Closing, the actual ratio of the Reverse Stock Split, amounts raised in the Pre-Closing Financing and as further set forth in the Exchange Agreement. The final Exchange Ratio may vary from the estimated Exchange Ratio presented in this proxy statement/information such that the holders of F-star share capital and Spring Bank securityholders may own more or less of the combined company than estimated in this proxy statement/information statement.

For purposes of the Exchange Agreement, Spring Bank’s net cash at closing is subject to certain reductions, including, without limitation, accounts payable, accrued expenses, current liabilities payable in cash, unpaid expenses related to the Exchange and certain other unpaid obligations, including outstanding lease obligations. In the event the amount of Spring Bank’s cash is smaller or such reductions are greater than anticipated, Spring Bank’s securityholders could hold a significantly smaller portion of the combined company.

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Any changes in the market price of Spring Bank common stock before the completion of the Exchange will not affect the number of shares of Spring Bank common stock issuable to the F-star securityholders pursuant to the Exchange Agreement. Therefore, if before the completion of the Exchange, the market price of Spring Bank common stock declines from the market price on the date of the Exchange Agreement, then the F-star securityholders could receive Exchange consideration with substantially lower value than the value of the Exchange consideration on the date of the Exchange Agreement. Similarly, if before the completion of the Exchange, the market price of Spring Bank common stock increases from the market price of Spring Bank common stock on the date of the Exchange Agreement, then F-star’s securityholders could receive Exchange consideration with substantially greater value than the value of the Exchange consideration on the date of the Exchange Agreement. Because the Exchange Ratio does not adjust as a result of changes in the market price of Spring Bank common stock, for each one percentage point change in the market price of Spring Bank common stock, there is a corresponding one percentage point rise or decline, respectively, in the value of the total Exchange consideration payable to the F-star securityholders pursuant to the Exchange Agreement.

F-star may not obtain sufficient funding in the Pre-Closing Financing and may require additional financing.

Immediately following the Closing and assuming an Exchange Ratio of 0.5338, the Spring Bank securityholders and holders of F-star’s share capital (including all F-star shares issued in connection with the F-star Note Conversion, the F-star Share Conversion and Pre-Closing Financing) are expected to own approximately 38.8% and 61.2%, respectively, of the outstanding capital stock of the combined company. This percentage of ownership assumes that Spring Bank’s valuation will not be adjusted as a result of the expected net cash at Closing and that F-star raises $25.0 million in the Pre-Closing Financing. F-star expects to raise at least $25.0 million in the Pre-Closing Financing, but it cannot guarantee that it will be able to do so. In the event that F-star raises less than $25.0 million in the Pre-Closing Financing, the anticipated percentage of ownership of the combined company by holders of share capital of F-star may be less than presently estimated. If either or both of Spring Bank or F-star hold less cash at the time of the Closing than the parties currently expect, or F-star raises less in the Pre-Closing Financing than anticipated, the combined company will need to raise additional capital sooner than currentlyexpected to fund its planned operations.

Spring Bank stockholders may not receive any payment on the CVRs and the CVRs may otherwise expire valueless.

Pursuant to the Exchange Agreement and the CVR Agreements, each share of Spring Bank common stock held by Spring Bank stockholders as of a record date immediately prior to the Closing will receive a dividend of (i) one contingent value right entitling these holders to receive payments in connection with certain transactions involving Spring Bank’s proprietary STING agonist compound (the “STING Agonist CVR”), and (ii) one contingent value right entitling these holders to receive payments in connection with the execution of a potential development agreement and certain other transactions involving Spring Bank’s proprietary STING antagonist compound (the “STING Antagonist CVR” and, together with the STING Agonist CVR, the “CVRs”).

The right of Spring Bank stockholders to receive any future payment on or to derive any value from the CVRs will be contingent solely upon the achievement of the events specified in the CVR Agreements within the time periods specified in the CVR Agreements and the consideration received being greater than any amounts permitted to be retained or deducted by Spring Bank under the CVR Agreements. The combined company may not be able to successfully achieve the development of Spring Bank’s Agonist or Antagonist compounds in a manner or within a time period that would generate payment pursuant to the CVR Agreements. If these payment triggering events are not achieved for any reason within the time periods specified in the CVR Agreements or the consideration received for these events is not greater than the amounts permitted to be retained or deducted by Spring Bank, no payments will be made under the CVRs, and the CVRs will expire valueless.

Furthermore, the CVRs will be unsecured obligations of the combined company and all payments under the CVRs, all other obligations under the CVR Agreement and the CVRs and any rights or other related claims will be subordinated in right of payment to the prior payment in full of all current or future senior obligations of the combined company. Finally, the U.S. federal income tax treatment of the CVRs is unclear. There is no legal authority directly addressing the U.S. federal income tax treatment of the receipt of, and payments on, the CVRs,

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and there can be no assurance that the Internal Revenue Service would not assert, or that a court would not sustain, a position that could result in adverse U.S. federal income tax consequences to holders of the CVRs. Please review the information in the section titled “Agreements Related to the Share Exchange—Material U.S. Federal Income Tax Consequences of the Receipt of CVRs to U.S. Holders” for a more complete description of the material U.S. federal income tax consequences of the receipt of, and payments on, the CVRs.

The U.S. federal income tax treatment of the CVRs is unclear.

The U.S. federal income tax treatment of the CVRs is subject to substantial uncertainty. There is no legal authority directly addressing the U.S. federal income tax treatment of the receipt of, and payments under, the CVRs, and there can be no assurance that the IRS would not assert, or that a court would not sustain, a position that could potentially result in adverse U.S. federal income tax consequences to holders of the CVRs.

In particular, as discussed in the section titled “Agreements Related to the Exchange—Contingent Value Rights Agreements—Material U.S. Federal Income Tax Consequences of the CVRs to U.S. Holders,” absent a change in law requiring otherwise, Spring Bank intends to take the position that the fair market value of the CVRs cannot be reasonably ascertained on the date of the issuance of the CVRs and, accordingly, the issuance of the CVRs constitutes an “open transaction”. Therefore, absent a change in law requiring otherwise, for U.S. federal income tax purposes, Spring Bank will not report the issuance of the CVRs as a current distribution of property with respect to its common stock and will instead report each future cash payment (if any) on the CVRs as a distribution with respect to Spring Bank’s common stock in the year in which such payment is made. It is possible that the IRS could assert that the issuance of the CVRs is not an “open transaction” and that the Spring Bank stockholders are treated as having received a distribution of property equal to the fair market value of the CVRs on the date the CVRs are distributed, which could be taxable to Spring Bank stockholders without the corresponding receipt of cash. In addition, it is possible that the IRS or a court could determine that the issuance of the CVRs (and/or any payments thereon) and the reverse stock split constitute a single “recapitalization” for U.S. federal income tax purposes with the CVRs constituting taxable “boot” received in such recapitalization exchange. In such case, the tax consequences of the CVRs and the Reverse Stock Split would differ from those described in this proxy statement/prospectus, including with respect to the timing and character of income.

Failure to complete the Exchange may result in either Spring Bank or F-star paying a termination fee to the other party and could significantly harm the market price of Spring Bank common stock and negatively affect the future business and operations of each company.

If the Exchange is not completed and the Exchange Agreement is terminated under certain circumstances, the terminating party may be required to pay the other party a termination fee of $2.0 million. In addition, under certain conditions, Spring Bank may be required to reimburse F-star for up to $750,000 of F-star’s out-of-pocket expenses. Even if a termination fee or expenses of the other party are not payable in connection with a termination of the Exchange Agreement, each of Spring Bank and F-star have incurred significant fees and expenses, which must be paid whether or not the Exchange is completed. Further, if the Exchange is not completed, it could significantly harm the market price of Spring Bank common stock.

In addition, if the Exchange Agreement is terminated and the Spring Bank Board of Directors (the “Spring Bank Board”) or the F-star Board of Directors determines to seek another business combination or strategic transaction, there can be no assurance that either Spring Bank or F-star will be able to find a partner and close an alternative transaction on terms that are as favorable or more favorable than the terms set forth in the Exchange Agreement.

The issuance of Spring Bank common stock in the Exchange pursuant to the Exchange Agreement, the resulting change in control from the Exchange, the Reverse Stock Split and the Spring Bank Name Change must be approved by Spring Bank stockholders. Failure to obtain these approvals and failure of any other closing conditions to the Exchange Agreement would prevent the Closing and Exchange.

Before the Exchange can be completed, the Spring Bank stockholders must approve the issuance of Spring Bank common stock in the Exchange. Failure to obtain the required stockholder approval may result in a material delay in, or the abandonment of, the Exchange. Even if these matters are approved by the Spring Bank stockholders, certain other specified conditions set forth in the Exchange Agreement must be satisfied or waived

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to complete the Exchange. Spring Bank and F-star cannot assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the Exchange will not occur or will be delayed, and Spring Bank or F-star each may lose some or all of the intended benefits of the Exchange. Any delay in completing the Exchange may materially adversely affect the timing and benefits that are expected to be achieved from the Exchange.

The Exchange may be completed even though certain events occur prior to the Closing that materially and adversely affect Spring Bank or F-star.

The Exchange Agreement provides that either Spring Bank or F-star can refuse to complete the Exchange if there is a material adverse change affecting the other party between the date of the Exchange Agreement and the Closing. However, certain types of changes do not permit either party to refuse to complete the Exchange, even if this change could have a material adverse effect on Spring Bank or F-star, including:

If adverse changes occur and Spring Bank and F-star still complete the Exchange, the market price of the combined company’s common stock may suffer. This in turn may reduce the value of the Exchange to the stockholders of Spring Bank, F-star or both.

Some Spring Bank and F-star officers and directors have interests in the Exchange that are different from the respective stockholders of Spring Bank and F-star and that may influence them to support or approve the Exchange without regard to the interests of the respective stockholders of Spring Bank or F-star.

Certain officers and directors of Spring Bank and F-star participate in arrangements that provide them with interests in the Exchange that are different from the interests of the respective stockholders of Spring Bank and F-star. For example, certain members of the Spring Bank Board and executive officers of Spring Bank have

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interests in the Exchange that may be different from, or in addition to, the interests of the Spring Bank stockholders. These interests relate to or arise from, among other things, (i) severance payments to which certain of Spring Bank’s executive officers will be entitled following completion of the Exchange as a result of termination of employment under certain circumstances, (ii) the accelerated vesting of certain of the equity awards held by Spring Bank’s executive officers and directors in connection with the completion of the Exchange, and (iii) the fact that certain current directors of Spring Bank, will continue as directors of the combined company after the Closing, each of which could influence them to support the Exchange.

Spring Bank and F-star securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the Closing as compared to their current ownership and voting interest in the respective companies.

If the proposed Exchange is completed, the current securityholders of Spring Bank and F-star will own a smaller percentage of the combined company than their ownership in their respective companies prior to the Exchange. The issuance of shares of Spring Bank common stock to securityholders of F-star in the Exchange will reduce significantly the relative voting power of each share of Spring Bank common stock held by its current stockholders and will reduce the relative voting power of each share of F-star share capital held by current F-star securityholders. Consequently, Spring Bank stockholders as a group and the F-star securityholders as a group will have less influence over the management and policies of the combined company after the Exchange than prior to the Exchange.

In addition, the eight member board of directors of the combined company will initially include three individuals designated by Spring Bank and five individual designated by F-star. Consequently, securityholders of Spring Bank and F-star will be able to exercise less influence over the management and policies of the combined company following the Closing than they currently exercise over the management and policies of their respective companies.

Spring Bank stockholders and F-star securityholders may not realize a benefit from the Exchange commensurate with the ownership dilution they will experience in connection with the Exchange.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the Exchange, Spring Bank stockholders and F-star securityholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the expected strategic and financial benefits currently anticipated from the Exchange.

During the pendency of the Exchange, Spring Bank and F-star may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Exchange Agreement, which could adversely affect their respective businesses.

Subject to certain limited exceptions, covenants in the Exchange Agreement impede the ability of Spring Bank and F-star to make acquisitions or to complete other transactions that are not in the ordinary course of business pending completion of the Exchange. As a result, if the Exchange is not completed, the parties may be at a disadvantage to their competitors during this period. In addition, while the Exchange Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets, or other business combination outside the ordinary course of business with any third party, subject to certain exceptions relating to fiduciary duties. These transactions could be favorable to Spring Bank’s or F-star’s securityholders.

The pendency of the Exchange could have an adverse effect on the trading price of Spring Bank common stock and its business, financial condition and prospects.

The pendency of the Exchange could disrupt Spring Bank’s business in many ways, including:

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Should they occur, any of these matters could adversely affect the trading price of Spring Bank common stock or harm Spring Bank’s business, financial condition and prospects.

The lack of a public market for F- star shares makes it difficult to evaluate the value of F-star share capital. The F-star securityholders may receive shares of Spring Bank common stock in the Exchange that have a value that is less than, or greater than, the fair market value of the F-star share capital.

The outstanding share capital of F-star is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of F-star. Because the percentage of Spring Bank common stock to be issued to F-star securityholders was determined based on negotiations between the parties, it is possible that the value of Spring Bank common stock to be received by F-star securityholders will be less than the fair market value of F-star, or Spring Bank may pay more than the aggregate fair market value for F-star.

Spring Bank is substantially dependent on its employees to facilitate the consummation of the Exchange.

Spring Bank’s ability to successfully complete the Exchange depends in large part on its ability to retain certain personnel. Despite Spring Bank’s efforts to retain these employees, one or more may terminate their employment with Spring Bank on short notice. The loss of the services of certain employees could potentially harm Spring Bank’s ability to consummate the Exchange, to run its day-to-day business operations, as well as to fulfill its reporting obligations as a public company.

Litigation relating to the Exchange could require Spring Bank or F-star to incur significant costs and suffer management distraction, and could delay or enjoin the Exchange.

As described in the section “Spring Bank Business—Legal Proceedings,” certain Spring Bank stockholders have filed complaints against Spring Bank, members of the Spring Bank Board and/or F-star relating to the Exchange and the registration statement filed in connection therewith. Spring Bank and F-star could be subject to additional demands or litigation related to the Exchange, whether or not the Exchange is consummated. While each of the defendants intends to vigorously defend themselves against these actions and believe these actions are without merit, there can be no assurance that any defendant, including Spring Bank and F-star, will be successful. The currently filed actions and any future actions may create uncertainty relating to the Exchange, or delay or enjoin the Exchange, result in substantial costs to Spring Bank or F-star and divert management time and resources.

Risks Related to the Proposed Reverse Stock Split

The proposed Reverse Stock Split may not increase the combined company’s stock price over the long-term.

One of the purposes of the proposed Reverse Stock Split is to increase the per-share market price of the Spring Bank common stock. It cannot be assured, however, that the proposed Reverse Stock Split will accomplish this objective for any meaningful period of time. While it is expected that the reduction in the number of outstanding shares of Spring Bank common stock will proportionally increase the market price of Spring Bank common stock, it cannot be assured that the proposed Reverse Stock Split will increase the market price of Spring Bank common stock by a multiple of the proposed Reverse Stock Split ratio, or result in any permanent or sustained increase in the market price of Spring Bank common stock, which is dependent upon many factors, including the combined company’s business and financial performance, general market conditions and prospects for future success. Thus, while the stock price of the combined company might meet the listing requirements for the Nasdaq Capital Market initially, it cannot be assured that it will continue to do so.

The proposed Reverse Stock Split may decrease the liquidity of the combined company’s common stock.

The liquidity of the combined company’s common stock could be adversely affected by the reduced number of shares outstanding after the proposed Reverse Stock Split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for Spring Bank common stock.

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The proposed Reverse Stock Split may lead to a decrease in the combined company’s overall market capitalization.

Should the market price of the combined company’s common stock decline after the proposed Reverse Stock Split, the percentage decline may be greater, due to the lesser number of shares outstanding, than it would have been prior to the proposed Reverse Stock Split. A reverse stock split may be viewed negatively by the market and, consequently, can lead to a decrease in the combined company’s overall market capitalization. If the per share market price does not increase in proportion to the proposed Reverse Stock Split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of Spring Bank common stock will remain the same after the proposed Reverse Stock Split is effected, or that the proposed Reverse Stock Split will not have an adverse effect on the stock price of Spring Bank common stock due to the reduced number of shares outstanding after the proposed Reverse Stock Split.

Risks Related to the Combined Company

The market price of the combined company’s common stock following the Exchange may decline as a result of the Exchange.

The market price of the combined company’s common stock may decline as a result of the Exchange for a number of reasons, including if:

The combined company’s stock price is expected to be volatile, and the market price of its common stock may drop following the Exchange.

The market price of the combined company’s common stock following the Exchange could be subject to significant fluctuations following the Exchange. Market prices for securities of early-stage pharmaceutical, biotechnology and other life sciences companies have historically been particularly volatile. Some of the factors that may cause the market price of the combined company’s common stock to fluctuate include:

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Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the combined company’s common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm the combined company’s profitability and reputation.

The combined company will need to raise additional capital by issuing securities or debt or through licensing or other strategic arrangements, which may cause dilution to the combined company’s stockholders or restrict the combined company’s operations or impact its proprietary rights.

If either or both of Spring Bank or F-star hold less cash at the time of the Closing than the parties currently expect, the combined company will need to raise additional capital sooner than expected. The combined company will also generally need to raise substantial additional capital to support its planned operations. Additional financing may not be available to the combined company when it needs it or may not be available on favorable terms. In addition, the combined company’s ability to obtain future funding when needed may be particularly challenging in light of the uncertainties and circumstances regarding the COVID-19 pandemic. To the extent that the combined company raises additional capital by issuing equity securities, this issuance may cause significant dilution to the combined company’s stockholders’ ownership. The terms of any new equity securities may have preferences over the combined company’s common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing, partnering or other strategic arrangements, it may be necessary to relinquish rights to some of the combined company’s technologies or product candidates and proprietary rights, or grant licenses on terms that are not favorable to the combined company.

Following the Exchange, the combined company may be unable to integrate successfully the businesses of Spring Bank and F-star and realize the anticipated benefits of the Exchange.

The Exchange involves the combination of two companies which currently operate as independent companies. Following the Exchange, the combined company will be required to devote management attention and resources to integrating its business practices and operations. The combined company may fail to realize some or all of the anticipated benefits of the Exchange if the integration process takes longer than expected or is more costly than expected. Potential difficulties the combined company may encounter in the integration process include the following:

In addition, Spring Bank and F-star have operated and, until the completion of the Exchange, will continue to operate, independently. It is possible that the integration process also could result in the diversion of the combined company’s management’s attention, the disruption or interruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect the combined company’s ability to maintain relationships with customers, suppliers and employees or the ability to achieve the anticipated benefits of the Exchange, or could otherwise adversely affect the business and financial results of the combined company.

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If the assets subject to the CVR Agreements are not disposed of in a timely manner, the combined company may have to incur time and resources to wind down or dispose of such assets.

In connection with the Exchange, Spring Bank stockholders will receive two separate CVRs for each outstanding share of Spring Bank common stock held by such stockholder immediately prior to the Closing, each representing the non-transferable contractual right to receive certain contingent payments from the combined company upon the occurrence of certain events within agreed time periods relating to the disposition by the combined company of certain STING pathway assets of Spring Bank. See the section titled “Agreements Related to the Exchange—Contingent Value Rights Agreements” included in this proxy statement/prospectus. Pursuant to the terms of the CVR Agreements, the holders of Spring Bank common stock prior to the closing, rather than the holders of the combined company’s common stock, are the primary recipients of any net proceeds of the disposition of the assets subject to the CVR Agreements. Absent such CVR Agreements, the combined company could have allocated such funds, time and resources to its core programs and the foregoing could be a distraction to the combined company’s management and employees. As a result, the combined company’s operations and financial condition may be adversely affected.

The combined company will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

The combined company will incur significant legal, accounting and other expenses that F-star did not incur as a private company, including costs associated with public company reporting requirements. The combined company will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and Nasdaq. These rules and regulations are expected to increase the combined company’s legal and financial compliance costs and to make some activities more time consuming and costly. For example, the combined company’s management team will consist of certain executive officers of F-star prior to the Exchange. These executive officers and other personnel will need to devote substantial time regarding operations as a public company and compliance with applicable laws and regulations. These rules and regulations may also make it difficult and expensive for the combined company to obtain directors’ and officers’ liability insurance. As a result, it may be more difficult for the combined company to attract and retain qualified individuals to serve on the combined company’s board of directors or as executive officers of the combined company, which may adversely affect investor confidence in the combined company and could cause the combined company’s business or stock price to suffer.

If securities or industry analysts do not publish research or reports about the combined company’s business, or if they issue an adverse or misleading opinion regarding the combined company’s stock, the combined company’s stock price and trading volume could decline.

The trading market for the combined company’s common stock may be influenced by the research and reports that industry or securities analysts publish about the combined company’s business. If any of the analysts who cover the combined company issue an adverse or misleading opinion regarding the combined company, the combined company’s business model, intellectual property or stock performance, or if the combined company’s preclinical studies or clinical trials and operating results fail to meet the expectations of analysts, the combined company’s stock price would likely decline. If one or more of these analysts cease coverage of the combined company or fail to publish reports on the combined company regularly, the combined company could lose visibility in the financial markets, which in turn could cause the combined company’s stock price or trading volume to decline.

Spring Bank and F-star do not anticipate that the combined company will pay any cash dividends in the foreseeable future.

The current expectation is that the combined company will retain its future earnings to fund the development and growth of the combined company’s business. As a result, capital appreciation, if any, of the common stock of the combined organization will be your sole source of gain, if any, for the foreseeable future.

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The pro forma financial statements included in this proxy statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined organization’s financial condition or results of operations following the completion of the Exchange.

The pro forma financial statements contained in this proxy statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Exchange for several reasons. The pro forma financial statements have been derived from the historical financial statements of Spring Bank and F-star and certain adjustments and assumptions have been made regarding the combined company after giving effect to the Exchange. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Exchange. The actual financial condition of the combined company following the Exchange may not be consistent with, or evident from, these pro forma financial statements. The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined organization’s financial condition following the Exchange. For more information, see the section titled “Unaudited Pro Forma Condensed Combined Financial Statements” in this proxy statement/prospectus.

Because the Exchange will likely result in an ownership change under Section 382 of the Code for Spring Bank, Spring Bank’s pre-Exchange net operating loss (“NOL”) carryforwards and certain other tax attributes will potentially be subject to limitations.

As of December 31, 2019, Spring Bank had U.S. federal NOL carryforwards and state NOL carryforwards of $115.6 million and $116.5 million, respectively. If a corporation undergoes an “ownership change” within the meaning of Section 382 of the Code (“Section 382”), the corporation’s NOL carryforwards and certain other tax attributes arising before the ownership change are subject to limitations on use after the ownership change. In general, an ownership change occurs if there is a cumulative change in the corporation’s equity ownership by certain stockholders that exceeds fifty percentage points over a rolling three-year period. Similar rules may apply under state tax laws. The Exchange will likely result in an ownership change for Spring Bank and, accordingly, Spring Bank’s NOL carryforwards and certain other tax attributes will potentially be subject to limitations (or disallowance) on their use after the Exchange. Additional ownership changes in the future could potentially result in additional limitations on Spring Bank’s and the combined company’s NOL carryforwards. Consequently, even if the combined company achieves profitability, it may not be able to utilize a material portion of the combined company’s NOL carryforwards and other tax attributes, which could have a material adverse effect on cash flow and results of operations. For more information on limitations on NOL carryforwards and certain other tax attributes, see ”Risk Factors—Risks Related to Spring Bank’s Common Stock—Spring Bank’s ability to use Spring Bank’s net operating loss and credit carryforwards to offset future taxable income may be subject to certain limitations,” below.

Risks Related to Spring Bank’s Financial Position and Capital Needs

If the Exchange is not completed, Spring Bank may not be able to otherwise source adequate liquidity to fund its operations, meet its obligations, and continue as a going concern.

While Spring Bank has entered into the Exchange Agreement with F-star, the Closing may be delayed or may not occur at all and there can be no assurance that the Exchange will deliver the anticipated benefits Spring Bank expects or enhance stockholder value. If the Exchange is not completed and the Exchange Agreement is terminated under certain circumstances, Spring Bank may be required to pay F-star a termination fee of $2.0 million. Even if a termination fee is not payable in connection with a termination of the Exchange Agreement, Spring Bank will have incurred significant fees and expenses, which must be paid whether or not the Exchange is completed.

Spring Bank does not expect to raise any additional funds prior to the completion of the Exchange. However, if for any reason the Exchange does not close, Spring Bank’s existing cash, cash equivalents and marketable securities as of June 30, 2020 would enable it to fund Spring Bank’s operating expenses and capital

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expenditure requirements for at least the next twelve months, excluding transaction costs associated with the Exchange (which Spring Bank expects to pay upon the Closing). If for any reason the Exchange does not close, Spring Bank will be required to obtain additional funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources in order to fund its operations. In addition, pursuant to the instructions to Form S-3, if Spring Bank files a new S-3 shelf registration statement, it would only have the ability to sell shares under such registration statement during any 12-month period in an amount less than or equal to one-third of the aggregate market value of its common stock held by non-affiliates, which is commonly referred to as Spring Bank’s “public float.” Adequate additional funding may not be available to it on acceptable terms or at all for a variety of reasons, including as a result of continuing uncertainty and volatility in the global capital markets as a result of the ongoing COVID-19 pandemic. Spring Bank’s failure to raise capital as and when needed would have a negative impact on Spring Bank’s financial condition and Spring Bank’s ability to pursue its business strategy, and Spring Bank may be forced to delay, reduce or eliminate Spring Bank’s research and development programs or any future commercialization efforts. Spring Bank does not have any committed external source of funds.

Spring Bank has based its expenditure estimates on assumptions that may prove to be wrong, and Spring Bank could deploy its available capital resources sooner than Spring Bank currently expects. Further, changing circumstances, some of which may be beyond Spring Bank’s control, could cause it to consume capital significantly faster than Spring Bank currently anticipates, and Spring Bank may need to seek additional funds sooner than planned. Spring Bank’s future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

Even if Spring Bank is able to secure additional capital to provide it with necessary financial resources to pursue other options, it may continue to operate its business or attempt to pursue another strategic transaction like the Exchange, sell or otherwise dispose of its assets, or dissolve or liquidate the company. Some of these alternatives would be costly and time-consuming and would likely require that Spring Bank obtain additional funding. Spring Bank can make no assurances that it would be able to obtain additional financing or find a partner and close an alternative transaction on terms that are as favorable, or more favorable, than the terms set forth in the Exchange Agreement or that any such alternative transaction would be possible or successful, if pursued. Even if Spring Bank is able to pursue these alternatives, the failure to complete the Exchange may result in negative publicity and/or a negative impression of Spring Bank in the investment community, could significantly harm the market price of Spring Bank common stock and may affect Spring Bank’s relationship with employees and other partners in the business community.

If the Spring Bank Board were to decide to dissolve and liquidate Spring Bank’s assets, Spring Bank would be required to wind down its clinical trials, pay all of its debts and contractual obligations, and to set aside certain

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reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left, if any, to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves. In addition, Spring Bank may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, the Spring Bank Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Spring Bank common stock would likely lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up of Spring Bank.

Spring Bank has incurred significant losses since Spring Bank’s inception and anticipates that Spring Bank will incur significant and increasing losses in the future.

Spring Bank does not have any products approved by regulatory authorities for marketing and has not generated any revenue from product sales, and Spring Bank continues to incur significant research, development and other expenses related to Spring Bank’s ongoing operations. As a result, Spring Bank is not profitable and has incurred losses in every reporting period since Spring Bank’s inception. For the years ended December 31, 2019 and 2018, Spring Bank reported a net loss of $24.1 million and $22.8 million, respectively. Spring Bank’s net loss for the six months ended June 30, 2020 was $14.7 million, and Spring Bank had an accumulated deficit of $140.9 million at June 30, 2020.

Spring Bank expects to continue to incur significant and increasing losses for the foreseeable future. Spring Bank anticipates these losses to increase as its expenses increase, and, if Spring Bank does not complete the Exchange, Spring Bank expects that Spring Bank’s expenses will increase if and as Spring Bank:

Spring Bank intends to expend a significant amount of Spring Bank’s limited resources on the development of Spring Bank’s sole clinical stage product candidate, SB 11285, for treatment of selected cancers, and may fail to capitalize on other technologies, product candidates or other indications that may be more profitable or for which there is a greater likelihood of success.

Spring Bank is focusing a significant amount of Spring Bank’s resources on the development of SB 11285, which concentrates the risk of product failure on one product candidate. SB 11285 may prove to be unsafe or ineffective. Because of this concentration of resources, Spring Bank may forego or delay development of other technologies, product candidates or other indications that later prove to have greater commercial potential.

Until recently, Spring Bank’s sole clinical stage product candidate was inarigivir soproxil, an investigational orally-administered RIG-I agonist compound, as a potential treatment for chronic hepatitis B virus (“HBV”). However, in January 2020, Spring Bank announced the discontinuation of the development of inarigivir in the interest of patient safety based on the occurrence of unexpected serious adverse events in Spring Bank’s Phase 2b chronic HBV CATALYST 2 trial. As a result, Spring Bank has refocused Spring Bank’s clinical development

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efforts on SB 11285, which is at a much earlier stage of development than inarigivir was when Spring Bank’s development program for that product candidate was discontinued.

Spring Bank’s resource allocation decisions may cause it to fail to capitalize on viable commercial products or profitable market opportunities. Spring Bank’s spending on current and future research and development programs and product candidates may not yield any commercially viable products. If Spring Bank does not accurately evaluate the commercial potential or target market for a particular product candidate, Spring Bank may relinquish valuable rights to the candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for it to retain sole development and commercialization rights to the product candidate.

Risks Related to the Discovery, Development and Commercialization of Spring Bank’s Product Candidates

Spring Bank’s future success is substantially dependent on the successful clinical development, regulatory approval and commercialization of SB 11285 and will require significant capital resources and years of additional clinical development effort. If Spring Bank is unable to develop, obtain regulatory approval for or successfully commercialize SB 11285 or experience significant delays in doing so, Spring Bank’s business could be materially harmed.

Spring Bank does not have any products that have gained regulatory approval. As a result, Spring Bank’s business is dependent on Spring Bank’s ability to successfully complete clinical development of, obtain regulatory approval for, and, if approved, to successfully commercialize SB 11285 in a timely manner. The success of SB 11285 will depend on several factors, including the following:

Many of these factors are beyond Spring Bank’s control, including potential delays in its clinical trials as a result of the ongoing COVID-19 pandemic, the regulatory submission process, potential threats to Spring Bank’s intellectual property rights and the manufacturing, marketing and sales efforts of any collaborators. If Spring Bank is unable to develop, receive marketing approval for and successfully commercialize SB 11285 or experience delays because of any of these factors or otherwise, Spring Bank’s business could be substantially harmed.

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Business interruptions resulting from the COVID-19 pandemic or similar public health crises could cause a disruption of the development of Spring Bank’s product candidates and adversely impact Spring Bank’s business.

Public health crises such as pandemics or similar outbreaks could adversely impact Spring Bank’s business. In December 2019, the coronavirus, which causes COVID-19, surfaced in Wuhan, China and has become a global pandemic affecting most regions and countries, including Massachusetts where Spring Bank’s primary office and laboratory space is located. The COVID-19 pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, shelter-in-place orders, travel restrictions and other public health safety measures, as well as reported adverse impacts on healthcare resources, facilities and providers, in Massachusetts, across the United States and in other countries. The COVID-19 pandemic has disrupted global supply chains, created global economic uncertainty and disrupted financial markets. The extent to which COVID-19 impacts Spring Bank’s operations or those of Spring Bank’s third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, additional or modified government actions, new information that will emerge concerning the severity and impact of COVID-19 and the actions to contain COVID-19 or address its impact in the short and long term, among others.

Additionally, timely initiation and completion of preclinical activities and clinical trials is dependent upon the availability of, for example, preclinical and clinical trial sites, researchers and investigators, regulatory agency personnel, and materials, which may be adversely affected by global health matters, such as pandemics. Spring Bank plans to conduct preclinical activities and clinical trials for Spring Bank’s investigational drug product candidates in geographies which are currently being affected by COVID-19.

Further, in response to the pandemic and in accordance with direction from state and local government authorities, Spring Bank has restricted access to Spring Bank’s facilities mostly to personnel and third parties who must perform critical activities that must be completed on-site, limited the number of such personnel that can be present at Spring Bank’s facilities at any one time, and requested that most of Spring Bank’s personnel work remotely. In the event that governmental authorities were to further modify current restrictions, Spring Bank’s employees conducting research and development activities may not be able to access Spring Bank’s laboratory space, and Spring Bank’s core activities may be significantly limited or curtailed, possibly for an extended period of time.

Some factors from the COVID-19 pandemic that could delay or otherwise adversely affect the completion of Spring Bank’s preclinical activities and the planned initiation of Spring Bank’s clinical trials for Spring Bank’s investigational drug product candidates, including STING, as well as Spring Bank’s business generally, include:

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These and other factors arising from COVID-19 could worsen in countries that are already afflicted with the coronavirus or could continue to spread to additional countries, each of which could further adversely impact Spring Bank’s ability to conduct clinical trials and Spring Bank’s business generally, and could have a material adverse impact on Spring Bank’s operations and financial condition and results.

In addition, the trading prices for Spring Bank’s common stock and other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic. As a result, Spring Bank may face difficulties raising capital through sales of Spring Bank’s common stock or such sales may be on unfavorable terms. The COVID-19 outbreak continues to rapidly evolve. The extent to which the outbreak may impact Spring Bank’s business, preclinical studies and planned clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and other actions to contain the outbreak or address its impact, such as social distancing and quarantines or lock-downs in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and address the disease.

The results of preclinical studies and clinical trials that Spring Bank has conducted to date may not be predictive of results in future clinical trials.

The outcome of preclinical studies and clinical trials that Spring Bank has conducted to date may not be predictive of the results of later clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical trials, even after seeing promising results in earlier preclinical studies and clinical trials. The results from Spring Bank’s in vitro and in vivo preclinical studies may not translate into human efficacy.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants. If Spring Bank fails to receive positive results in clinical trials of SB 11285 or any of Spring Bank’s other product candidates, the development timeline and regulatory approval and commercialization prospects for such product candidate, and, correspondingly, Spring Bank’s business and financial prospects, would be negatively impacted.

Interim, “top-line,” and preliminary data from Spring Bank’s clinical trials that Spring Bank announces or publishes from time to time may change as more patient data become available or as additional analyses are conducted, and the data are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, Spring Bank may publicly disclose interim or “top-line” from Spring Bank’s clinical studies, which are based on a preliminary analysis of then-available efficacy, tolerability, pharmacokinetic and

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safety data. The results and related findings and conclusions Spring Bank may draw from this top-line data are subject to change following a more comprehensive review of the data related to the particular study or trial. Interim data from clinical trials that Spring Bank may complete is subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data Spring Bank previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Material adverse changes between preliminary, “top-line,” or interim data and final data could significantly harm Spring Bank’s business prospects.

The therapeutic efficacy of SB 11285 has not been definitively shown in humans, and Spring Bank may not be able to successfully develop and commercialize SB 11285 or any of Spring Bank’s other product candidates.

SB 11285 and Spring Bank’s other product candidates are novel compounds and their potential benefit as immunotherapies or immunomodulators, as applicable, has not been definitively shown in humans. SB 11285 and Spring Bank’s other product candidates may not prove to be effective against the indications for which they are being designed to act and may not demonstrate in future clinical trials any or all of the pharmacological effects that have been observed in preclinical studies or clinical trials to date.

SB 11285 and Spring Bank’s other product candidates may interact with human biological systems in unforeseen, ineffective or harmful ways. If any of Spring Bank’s product candidates is associated with undesirable side effects or have characteristics that are unexpected, Spring Bank may need to abandon the development of such product candidate or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Because of these and other risks described herein that are inherent in the development of novel therapeutic agents, Spring Bank may never successfully develop or commercialize SB 11285 or any of Spring Bank’s other product candidates, in which case Spring Bank’s business will be harmed.

Clinical development of product candidates involves a lengthy and expensive process. Additionally, there are substantial risks inherent in attempting to commercialize new drugs, and, as a result, Spring Bank may not be able to successfully develop products for commercial use.

Spring Bank may experience delays in Spring Bank’s ongoing or future preclinical or clinical trials and Spring Bank does not know whether planned clinical trials will begin or enroll subjects on a timely basis, need to be redesigned or be completed on schedule, if at all. Failure can occur at any time during the clinical trial process, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements and determination by the FDA or any comparable foreign regulatory authority, such as the EMA, that a product candidate may not continue development or is not approvable. Additionally, because Spring Bank’s product candidates are based on new technologies and costs to treat patients with relapsed/refractory cancer may be significant, Spring Bank’s clinical trial costs are likely to be significantly higher than for more conventional therapeutic technologies or drug products.

There can be no assurance that the FDA or other foreign regulatory authorities will not put clinical trials of SB 11285 or any of Spring Bank’s other product candidates on clinical hold now or in the future. Clinical trials may be delayed, suspended or prematurely terminated or may take longer than anticipated for a variety of reasons, such as:

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If Spring Bank experiences delays in any preclinical or clinical trial of Spring Bank’s product candidates, including as a result of the ongoing COVID-19 pandemic, the product candidate development and approval process could be slowed down, and as a result the costs of the development and approval process may increase, the commercial prospects of Spring Bank’s product candidates may be harmed, and Spring Bank’s ability to generate product revenues from these product candidates may be delayed. Significant preclinical or clinical trial delays also could shorten any periods during which Spring Bank may have the exclusive right to commercialize Spring Bank’s product candidates or allow Spring Bank’s competitors to bring products to market before Spring Bank does and impairs Spring Bank’s ability to commercialize Spring Bank’s product candidates successfully and may harm Spring Bank’s business and results of operations. In addition, many of the factors that lead to clinical trial delays may ultimately lead to the denial of marketing approval of any of Spring Bank’s product candidates.

If Spring Bank or Spring Bank’s collaborators experiences delays or difficulties in the enrollment of patients in clinical trials, Spring Bank’s receipt of necessary regulatory approvals could be delayed or prevented.

Spring Bank or Spring Bank’s collaborators may not be able to initiate or continue clinical trials for any of Spring Bank’s product candidates if Spring Bank or Spring Bank’s collaborators, as applicable, is unable to locate and enroll a sufficient number of eligible patients to participate in clinical trials as required by the FDA or

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comparable foreign regulatory authorities. Patient enrollment is a significant factor in the timing of clinical trials, and is affected by many factors, including the following events:

Spring Bank’s inability to enroll a sufficient number of patients for Spring Bank’s clinical trials could result in significant delays or may require Spring Bank to abandon one or more clinical trials altogether. Enrollment delays in Spring Bank’s clinical trials may result in increased development costs for Spring Bank’s product candidates, delay or halt the development of and approval processes for Spring Bank’s product candidates and jeopardize Spring Bank’s ability to commence sales of and generate revenues from Spring Bank’s product candidates, which could cause the value of Spring Bank to decline.

SB 11285 or any other product candidate that Spring Bank develops may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval or limit the commercial profile of an approved label.

Undesirable side effects caused by SB 11285 or any other product candidate could cause Spring Bank or regulatory authorities to interrupt, delay or halt clinical trials and could result in a restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities.

Results of Spring Bank’s trials could reveal an unacceptably high severity and prevalence of side effects. In such an event, Spring Bank’s trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order Spring Bank to cease further development of or deny approval of Spring Bank’s product candidates for any or all targeted indications. Study drug-related side effects could affect study subject recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims. If SB 11285 or any of Spring Bank’s other product candidates is associated with adverse events or undesirable side effects or has properties that are unexpected, Spring Bank may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. For instance, in January 2020, Spring Bank announced the discontinuation of the development of inarigivir in the interest of patient safety based on the occurrence of unexpected serious adverse events in Spring Bank’s Phase 2b CATALYST 2 trial. Many compounds that initially showed promise in clinical or earlier stage testing have later been found to cause undesirable or unexpected side effects that prevented further development of the compound. Spring Bank cannot provide any assurances that there will not be further treatment-related severe adverse events or deaths with other product candidates or that patient recruitment for trials with Spring Bank’s other product candidates will not be adversely impacted by the events with inarigivir, each of which could materially and adversely affect Spring Bank’s business and prospects.

Product liability lawsuits against Spring Bank could cause Spring Bank to incur substantial liabilities and to limit commercialization of SB 11285 or any other product candidates.

Spring Bank faces an inherent risk of product liability exposure related to the testing of Spring Bank’s current and former product candidates by Spring Bank or Spring Bank’s investigators in human clinical trials, including, but not limited to, Spring Bank determining to discontinue the development of inarigivir, an

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investigational RIG-I agonist compound, in the interest of patient safety based on the occurrence of unexpected serious adverse events in Spring Bank’s Phase 2b CATALYST 2 trial. Product liability claims may be brought against Spring Bank by study subjects enrolled in Spring Bank’s clinical trials, patients, healthcare providers or others using, administering or selling Spring Bank’s product candidates. If Spring Bank cannot successfully defend itself against claims that Spring Bank’s product candidates caused injuries, Spring Bank could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in, for example:

Spring Bank’s inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products Spring Bank develops, alone or with collaborators. Although Spring Bank currently carries clinical trial insurance, the amount of such insurance coverage may not be adequate, Spring Bank may be unable to maintain such insurance, or Spring Bank may not be able to obtain additional or replacement insurance at a reasonable cost, if at all. Spring Bank’s insurance policies may also have various exclusions, and Spring Bank may be subject to a product liability claim for which Spring Bank has no coverage. Spring Bank may have to pay any amounts awarded by a court or negotiated in a settlement that exceed Spring Bank’s coverage limitations or that are not covered by Spring Bank’s insurance, and Spring Bank may not have, or be able to obtain, sufficient capital to pay such amounts. Even if Spring Bank’s agreements with any future corporate collaborators entitle Spring Bank to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

Risks Related to Spring Bank’s Dependence on Third Parties

Spring Bank relies on third parties to conduct Spring Bank’s preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines or their relationship with Spring Bank is terminated, Spring Bank’s business may be harmed and Spring Bank’s drug development efforts could be delayed.

Spring Bank relies on third-party research vendors, academic research institutions, CROs, and other third parties to conduct and provide Spring Bank with significant data and other information related to Spring Bank’s projects, preclinical studies and clinical trials. Spring Bank relies on these parties for execution of Spring Bank’s preclinical studies and clinical trials, and Spring Bank controls only some aspects of their activities. If these third parties provide inaccurate, misleading, or incomplete data, Spring Bank’s business, prospects, and results of operations could be materially adversely affected. Nevertheless, Spring Bank is responsible for ensuring that each of Spring Bank’s preclinical studies and clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and Spring Bank’s reliance on the CROs does not relieve Spring Bank of Spring Bank’s regulatory responsibilities. Spring Bank also relies on third parties to assist in conducting Spring Bank’s preclinical studies in accordance with good laboratory practice (“GLP”), and the Animal Welfare Act requirements. Spring Bank and Spring Bank’s service providers are required to comply with federal regulations and good clinical practice (“GCP”), which are international standards meant to protect the rights and health of subjects that are enforced by the FDA, the Competent Authorities of the Member States of

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the European Economic Area and comparable foreign regulatory authorities. Regulatory authorities enforce GCP through periodic inspections of trial sponsors, principal investigators and trial sites. If Spring Bank or any of Spring Bank’s service providers fails to comply with applicable GCP, the clinical data generated in Spring Bank’s clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require Spring Bank to perform additional clinical trials before approving Spring Bank’s marketing applications. Spring Bank cannot guarantee that upon inspection by a given regulatory authority, such regulatory authority will determine that any of Spring Bank’s clinical trials comply with GCP requirements. In addition, Spring Bank’s clinical trials must be conducted with product produced under current Good Manufacturing Practices (“cGMPs”). Failure to comply with these regulations may require Spring Bank to repeat preclinical studies and clinical trials, which would delay the regulatory approval process.

Spring Bank’s service providers are not Spring Bank’s employees, and except for remedies available to Spring Bank under Spring Bank’s agreements with such service providers, Spring Bank cannot control whether or not they devote sufficient time and resources to Spring Bank’s ongoing clinical, nonclinical and preclinical programs. If service providers do not successfully carry out their contractual duties or obligations or meet expected deadlines (including as a result of the COVID-19 pandemic) or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to Spring Bank’s protocols, regulatory requirements or for other reasons, Spring Bank’s preclinical studies and clinical trials may be extended, delayed or terminated and Spring Bank may not be able to obtain regulatory approval for or successfully commercialize SB 11285 or any of Spring Bank’s other product candidates. As a result, Spring Bank’s results of operations and the commercial prospects for Spring Bank’s product candidates would be harmed, Spring Bank’s costs could increase and Spring Bank’s ability to generate revenues could be delayed.

Because Spring Bank has relied and continue to rely on third parties, Spring Bank’s internal capacity to perform these functions is limited. Outsourcing these functions involves risk that third parties may not perform to Spring Bank’s standards, may not produce results in a timely manner or may fail to perform at all. In addition, the use of third-party service providers requires Spring Bank to disclose Spring Bank’s proprietary information to these parties, which could increase the risk that this information will be misappropriated. Spring Bank currently has a small number of employees, which limits the internal resources Spring Bank has available to identify and monitor Spring Bank’s third-party providers. To the extent Spring Bank is unable to identify and successfully manage the performance of third-party service providers in the future, Spring Bank’s business may be adversely affected. Though Spring Bank carefully manages Spring Bank’s relationships with Spring Bank’s service providers, there can be no assurance that Spring Bank will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on Spring Bank’s business, financial condition and prospects.

Spring Bank’s third-party vendors and service providers generally have the right to terminate their agreements with Spring Bank under certain circumstances. Identifying, qualifying and managing performance of third-party service providers can be difficult, time consuming and cause delays in Spring Bank’s development programs. In addition, there is a natural transition period when a new third-party vendor or service provider commences work, and the new third-party vendor or service provider may not provide the same type or level of services as the original provider. If any of Spring Bank’s relationships with Spring Bank’s third-party vendors or service providers terminate, Spring Bank may not be able to enter into arrangements with alternative third-party vendors or service providers or to do so on commercially reasonable terms.

Spring Bank has no experience manufacturing any product candidate on a commercial scale and have no manufacturing facility. Spring Bank is dependent on contract manufacturers for the manufacture of SB 11285 as well as on third parties for Spring Bank’s supply chain and expects to rely on contract manufacturers for any other product candidates. If Spring Bank experiences problems with any of these contract manufacturers, the manufacturing of SB 11285 or any other product candidate could be delayed.

Spring Bank currently has no manufacturing facilities and limited personnel with manufacturing experience. Spring Bank relies on contract manufacturers to produce both drug substance and drug product required for Spring Bank’s clinical trials. Spring Bank plans to continue to rely upon contract manufacturers to manufacture

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commercial quantities of Spring Bank’s products, if approved. Reliance on these third-party contractors entails risks, including:

Spring Bank currently relies, and expects to continue to rely, on a small number of third-party contract manufacturers to supply the majority of Spring Bank’s active pharmaceutical ingredient (“API”), and required finished product for Spring Bank’s preclinical studies and clinical trials. These contract manufacturers are typically single source suppliers to Spring Bank. Spring Bank does not have long-term agreements with any of these third parties. If any of Spring Bank’s existing manufacturers become unavailable to Spring Bank for any reason, Spring Bank may experience a delay in identifying or qualifying replacements.

If Spring Bank’s current supply of drug substance turns out to be insufficient to complete Spring Bank’s clinical trial for SB 11285 or Spring Bank is unable to obtain alternative sources of supply on favorable terms, on a timely basis or at all, Spring Bank’s business may be adversely affected.

Each of Spring Bank’s API and drug product manufacturers must comply with cGMPs and other stringent regulatory requirements enforced by the FDA and foreign regulatory authorities in other jurisdictions. These requirements include, among other things, quality control, quality assurance and the maintenance of records and documentation, which occur in addition to Spring Bank’s own quality assurance releases. Manufacturers of Spring Bank’s products may be unable to comply with these GMP requirements and with other regulatory requirements. Spring Bank has little control over Spring Bank’s manufacturers’ or partners’ compliance with these regulations and standards.

Any manufacturing problem or the loss of a contract manufacturer could be disruptive to Spring Bank’s operations, delay Spring Bank’s clinical trials and, if any of Spring Bank’s products are approved for sale, result in lost sales. Spring Bank’s manufacturers may experience problems with their respective manufacturing and distribution operations and processes, including for example, quality issues, such as product specification and stability failures, procedural deviations, improper equipment installation or operation, utility failures, contamination and natural disasters. In addition, the raw materials necessary to make API for Spring Bank’s products are acquired from a limited number of sources. Any delay or disruption in the availability of these raw materials or a change in raw material suppliers could result in production disruptions, delays or higher costs with consequent adverse effects on Spring Bank. Any reliance on suppliers may involve additional risks, including a potential inability to obtain critical materials and reduced control over production costs, delivery schedules, reliability and quality. Any unanticipated disruption to future contract manufacture caused by problems at suppliers could delay shipment of Spring Bank’s product candidates, increase Spring Bank’s cost of goods sold or, if any of Spring Bank’s products are approved for sale, result in lost sales.

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If any of Spring Bank’s product candidates are approved by any regulatory agency, Spring Bank plans to enter into agreements with third-party contract manufacturers for the commercial production and distribution of those products. It may be difficult for Spring Bank to reach agreement with a contract manufacturer on satisfactory terms or in a timely manner. In addition, Spring Bank may face competition for access to manufacturing facilities, as there are a limited number of contract manufacturers operating under cGMPs that are capable of manufacturing Spring Bank’s product candidates. Consequently, Spring Bank may not be able to reach agreement with third-party manufacturers on satisfactory terms, which could delay Spring Bank’s commercialization efforts.

Third-party manufacturers are required to comply with cGMPs and similar regulatory requirements outside the United States. Facilities used by Spring Bank’s third-party manufacturers must be approved by the FDA after Spring Bank submits an NDA and before potential approval of the product candidate. Similar regulations apply to manufacturers of Spring Bank’s product candidates for use or sale in foreign countries. Spring Bank does not control the manufacturing process and is completely dependent on Spring Bank’s third-party manufacturers for compliance with the applicable regulatory requirements for the manufacture of Spring Bank’s product candidates. If Spring Bank’s manufacturers cannot successfully manufacture material that conforms to Spring Bank’s specifications or the strict regulatory requirements of the FDA and any applicable foreign regulatory authority, they will not be able to secure the applicable approval for their manufacturing facilities. If these facilities are not approved for commercial manufacture, Spring Bank may need to find alternative manufacturing facilities, which could result in delays in obtaining approval for the applicable product candidate.

In addition, Spring Bank’s manufacturers are subject to ongoing periodic inspections by the FDA and corresponding state and foreign agencies for compliance with cGMPs and similar regulatory requirements both prior to and following the receipt of marketing approval for any of Spring Bank’s product candidates. Some of these inspections may be unannounced. Failure by any of Spring Bank’s manufacturers to comply with applicable cGMPs or other regulatory requirements could result in sanctions being imposed on Spring Bank, including fines, injunctions, civil penalties, delays, suspensions or withdrawals of approvals, operating restrictions, interruptions in supply and criminal prosecutions, any of which could adversely affect supplies of Spring Bank’s product candidates and significantly harm Spring Bank’s business, financial condition and results of operations.

Spring Bank’s current and anticipated future dependence upon others for the manufacture of Spring Bank’s product candidates may adversely affect Spring Bank’s future profit margins and Spring Bank’s ability to commercialize any products that receive marketing approval on a timely and competitive basis.

Spring Bank is subject to healthcare laws and regulations, which could expose Spring Bank to criminal sanctions, civil penalties, contractual damages, reputational harm, fines, disgorgement, exclusion from participation in government healthcare programs, curtailment or restricting of Spring Bank’s operations, and diminished profits and future earnings.

Healthcare providers, physicians and others will play a primary role in the recommendation and prescription of any products for which Spring Bank obtains marketing approval. Spring Bank’s future arrangements with healthcare providers, patients and third-party payors will expose Spring Bank to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which Spring Bank markets, sells and distributes any products for which Spring Bank obtains marketing approval. Restrictions under applicable U.S. federal and state healthcare laws and regulations include the following:

Anti-Kickback Statute. The federal healthcare Anti-Kickback Statute (the “Anti-Kickback Statute”) prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the Anti-Kickback Statute or specific intent to violate it in order to have committed a violation;

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False Claims Laws. Federal civil and criminal false claims laws and civil monetary penalties laws, including the federal False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented to the federal government claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. In addition, the government may assert that a claim including items and services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

HIPAA. The federal Health Insurance Portability and Accountability Act of 1996, (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or for making any false statements relating to healthcare matters. Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate the statute in order to have committed a violation. Additionally, HIPAA, as amended by HITECH and its implementing regulations, imposes obligations on certain covered entities as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms with respect to safeguarding the privacy, security and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information;

Privacy Regulations and the GDPR. Privacy and data security have become significant issues in the United States, Europe and in many other jurisdictions where Spring Bank may in the future conduct Spring Bank’s operations. Regulators globally are imposing greater monetary fines for privacy violations. For example, in 2016, the EU adopted the GDPR, which became effective on May 25, 2018. The GDPR applies to any company established in the EU as well as to those outside the EU if they collect and use personal data in connection with the offering goods or services to individuals in the EU or the monitoring of their behavior. The GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers. Non-compliance with the GDPR may result in monetary penalties of up to €20 million or 4% of worldwide revenue, whichever is higher. The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of personal data, such as healthcare data or other sensitive information, could greatly increase Spring Bank’s cost of providing Spring Bank’s products and services or even prevent Spring Bank from offering certain services in jurisdictions in which Spring Bank may.

Transparency Requirements. The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Department of Health and Human Services information related to certain payments and other transfers of value, to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members;

FDCA. The U.S. Federal Food, Drug and Cosmetic Act (the “FDCA”), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; and

Analogous State and Foreign Laws. Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, and transparency laws, may apply to sales or marketing arrangements, and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers. In addition, some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

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Efforts to ensure that Spring Bank’s business arrangements with third parties, and Spring Bank’s business generally, will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that Spring Bank’s business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If Spring Bank’s operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to Spring Bank, it may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, contractual damages, reputational harm, disgorgement, curtailment or restricting of Spring Bank’s operations, any of which could substantially disrupt Spring Bank’s operations and diminish Spring Bank’s profits and future earnings. If any of the physicians or other providers or entities with whom Spring Bank expects to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. The risk of Spring Bank’s being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that some of Spring Bank’s business activities, including Spring Bank’s relationships with physicians and other healthcare providers, some of whom will recommend, purchase and/or prescribe Spring Bank’s products, could be subject to challenge under one or more of such laws.

If Spring Bank fails to comply with environmental, health and safety laws and regulations, Spring Bank could become subject to fines or penalties or incur costs that could harm Spring Bank’s business.

Spring Bank is subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, Spring Bank’s operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if Spring Bank contracts with third parties for the disposal of these materials and waste products, Spring Bank cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of Spring Bank’s hazardous materials, Spring Bank could be held liable for any resulting damages, and any liability could exceed Spring Bank’s resources. Spring Bank also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

Spring Bank maintains workers’ compensation insurance to cover Spring Bank for costs and expenses Spring Bank may incur due to injuries to Spring Bank’s employees resulting from the use of hazardous materials, but this insurance may not provide adequate coverage against potential liabilities. Spring Bank does not maintain insurance for any environmental liability or toxic tort claims that may be asserted against Spring Bank.

In addition, Spring Bank may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair Spring Bank’s research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

Risks Related to Spring Bank’s Intellectual Property

If Spring Bank is unable to protect Spring Bank’s intellectual property rights or if Spring Bank’s intellectual property rights are inadequate for Spring Bank’s technology and product candidates, Spring Bank’s competitive position could be harmed.

Spring Bank’s success will depend in large part on Spring Bank’s ability to obtain and maintain patent and other intellectual property protection in the United States and other countries with respect to Spring Bank’s proprietary technology and product candidates. Spring Bank relies on trade secret, patent, copyright and trademark laws, and confidentiality, licensing and other agreements with employees and third parties. Spring Bank seeks to protect Spring Bank’s proprietary position by filing and prosecuting patent applications in the

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United States and abroad related to Spring Bank’s novel technologies and product candidates that are important to Spring Bank’s business.

The patent prosecution process is expensive and time-consuming, and Spring Bank may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that Spring Bank will fail to identify patentable aspects of Spring Bank’s research and development before it is too late to obtain patent protection. Although Spring Bank enters into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of Spring Bank’s research and development, such as Spring Bank’s employees, strategic partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose Spring Bank’s confidential information before a patent application is filed, thereby jeopardizing Spring Bank’s ability to seek patent protection.

Spring Bank may license patent rights that are valuable to Spring Bank’s business from third parties, in which event Spring Bank may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology or medicines underlying such licenses. Spring Bank cannot be certain that these patents and applications will be prosecuted and enforced in a manner consistent with the best interests of Spring Bank’s business. If any such licensor fails to maintain such patents, or lose rights to those patents, the rights Spring Bank has licensed may be reduced or eliminated and Spring Bank’s right to develop and commercialize any of Spring Bank’s product candidates that are the subject of such licensed rights could be adversely affected. In addition to the foregoing, the risks associated with patent rights that Spring Bank licenses from third parties also apply to patent rights Spring Bank owns.

The patent positions of biotechnology and pharmaceutical companies generally are highly uncertain, involve complex legal and factual questions and have in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of Spring Bank’s patents, including those patent rights licensed to Spring Bank by third parties, are highly uncertain. The steps Spring Bank or Spring Bank’s licensors have taken to protect Spring Bank’s proprietary rights may not be adequate to preclude misappropriation of Spring Bank’s proprietary information or infringement of Spring Bank’s intellectual property rights, both inside and outside the United States. Further, the examination process may require Spring Bank or Spring Bank’s licensors to narrow the claims for Spring Bank’s pending patent applications, which may limit the scope of patent protection that may be obtained if these applications issue as patents. The rights already granted under any of Spring Bank’s currently issued patents or those licensed to Spring Bank and those that may be granted under future issued patents may not provide Spring Bank with the proprietary protection or competitive advantages Spring Bank is seeking. Changes in the patent laws, implementing regulations or interpretation of the patent laws in the United States and other countries may also diminish the value of Spring Bank’s patents or narrow the scope of Spring Bank’s patent protection. If Spring Bank or Spring Bank’s licensors are unable to obtain and maintain patent protection for Spring Bank’s technology and product candidates, or if the scope of the patent protection obtained is not sufficient, Spring Bank’s competitors could develop and commercialize technology and products similar or superior to Spring Bank, and Spring Bank’s ability to successfully commercialize Spring Bank’s technology and product candidates may be adversely affected.

With respect to patent rights, Spring Bank does not know whether any of the pending patent applications for any of Spring Bank’s compounds will result in the issuance of patents that protect Spring Bank’s technology or products, or if any of Spring Bank’s or Spring Bank’s licensors’ issued patents will effectively prevent others from commercializing competitive technologies and products. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or in some cases not at all, until they are issued as a patent. Therefore, Spring Bank cannot be certain that Spring Bank or Spring Bank’s licensors were the first to make the inventions claimed in Spring Bank’s owned or licensed patents or pending patent applications, or that Spring Bank or Spring Bank’s licensors were the first to file for patent protection of such inventions.

Spring Bank’s pending applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Because the issuance of a

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patent is not conclusive as to its inventorship, scope, validity or enforceability, issued patents that Spring Bank own or have licensed from third parties may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in the loss of patent protection, the narrowing of claims in such patents or the invalidity or unenforceability of such patents, which could limit Spring Bank’s ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection for Spring Bank’s technology and products. Protecting against the unauthorized use of Spring Bank’s or Spring Bank’s licensors’ patented technology, trademarks and other intellectual property rights is expensive, difficult and in some cases may not be possible. In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of Spring Bank’s intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult.

If third parties initiate legal proceedings against Spring Bank alleging that Spring Bank is infringing their intellectual property rights, such litigation could be costly and time consuming and could prevent or delay Spring Bank from developing or commercializing Spring Bank’s product candidates.

Spring Bank’s commercial success depends upon Spring Bank’s ability to develop, manufacture, market and sell SB 11285, and any other product candidates and to use Spring Bank’s related proprietary technologies, without infringing the intellectual property and other proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, and interferences, post-grant review, inter partes review, and reexamination proceedings before the United States Patent and Trademark Office (“USPTO”), and corresponding foreign patent offices. As a result, Spring Bank may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to SB 11285 or any other product candidates, including interference or derivation proceedings before the USPTO. Third parties may assert infringement claims against Spring Bank based on existing patents or patents that may be granted in the future. The pharmaceutical and biotechnology industries have produced a significant number of patents, and it may not always be clear to industry participants, including Spring Bank, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

Third parties may assert that Spring Bank is employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods of treatment related to the use or manufacture of Spring Bank’s product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications, which may later result in issued patents that Spring Bank’s product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of Spring Bank’s technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of Spring Bank’s product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block Spring Bank’s ability to commercialize such product unless Spring Bank obtained a license under the applicable patents, or until such patents expire. Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of Spring Bank’s formulations, processes for manufacture or methods of use, the holders of any such patents may be able to block Spring Bank’s ability to develop and commercialize the applicable product candidate.

If Spring Bank were sued for patent infringement, Spring Bank would need to demonstrate that Spring Bank’s product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and Spring Bank may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. If Spring Bank is found to infringe a third party’s intellectual property rights, Spring Bank could be required to obtain a license from such third party. However, Spring Bank may not be able to obtain any required license on commercially reasonable terms or at all. Under certain circumstances, Spring Bank could be forced, including by court order, to cease commercializing the applicable product candidate. In addition, in any such proceeding or litigation, Spring Bank

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could be found liable for monetary damages. A finding of infringement could prevent Spring Bank from commercializing the applicable product candidate or force Spring Bank to cease some of Spring Bank’s business operations, which could materially harm Spring Bank’s business.

Defense of claims of infringement, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from Spring Bank’s business. In the event of a successful claim of infringement against Spring Bank, it may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign Spring Bank’s infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure. Parties making claims against Spring Bank may also obtain injunctive or other equitable relief, which could effectively block Spring Bank’s ability to develop and commercialize one or more of Spring Bank’s product candidates, which could materially harm Spring Bank’s business.

Most of Spring Bank’s competitors are larger than Spring Bank is and have substantially greater resources and may be able to sustain the costs of complex patent litigation longer than Spring Bank could. The uncertainties associated with litigation could have a material adverse effect on Spring Bank’s ability to raise the funds necessary to continue Spring Bank’s research and development, in-license needed technology, or enter into strategic partnerships.

Any claims by third parties that Spring Bank has misappropriated their confidential information or trade secrets could have a similar negative impact on Spring Bank’s business. Even if Spring Bank is successful in these proceedings, Spring Bank may incur substantial costs and the time and attention of Spring Bank’s management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm Spring Bank’s business and operating results. In addition, Spring Bank may not have sufficient resources to bring these actions to a successful conclusion.

While SB 11285 and any other product candidates that Spring Bank may develop will be observed in preclinical studies and/or clinical trials, Spring Bank believes that the use of Spring Bank’s product candidates in these preclinical studies and/or clinical trials falls or will fall within the scope of the exemptions provided by 35 U.S.C. Section 271(e) in the United States, which exempts from patent infringement liability activities reasonably related to the development and submission of information to the FDA. If these product candidates progress toward commercialization, the possibility of a patent infringement claim against Spring Bank increases. Spring Bank attempts to ensure that the methods Spring Bank employs to manufacture SB 11285, as well as the methods for their use that Spring Bank intends to promote, do not infringe other parties’ patents and other proprietary rights. There can be no assurance they do not, however, and competitors or other parties may assert that Spring Bank infringes their proprietary rights in any event.

In addition, Spring Bank plans to evaluate SB 11285 in combination with other product candidates and approved products that are covered by patents held by other companies or institutions. In the event that a labeling instruction is required in product packaging recommending that combination, Spring Bank could be accused of, or held liable for, infringement of the third-party patents covering the product candidate or product recommended for administration with SB 11285. In such a case, Spring Bank could be required to obtain a license from the other company or institution to use the required or desired package labeling, which may not be available on commercially reasonable terms, or at all.

The terms of Spring Bank’s patents may be inadequate to protect Spring Bank’s competitive position on Spring Bank’s products for an adequate amount of time.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. Spring Bank expects to seek extensions of patent terms in the United States and, if available, in other countries where Spring Bank is prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional indications approved during the period of extension). However, the applicable authorities, including the FDA and the USPTO in the

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United States, and any equivalent regulatory authority in other countries, may not agree with Spring Bank’s assessment of whether such extensions are available, and may refuse to grant extensions to Spring Bank’s patents, or may grant more limited extensions than Spring Bank requests. If this occurs, Spring Bank’s competitors may be able to take advantage of Spring Bank’s investment in development and clinical trials by referencing Spring Bank’s clinical and preclinical data and launch their product earlier than might otherwise be the case.

Risks Related to Spring Bank’s Common Stock

The trading market in Spring Bank’s common stock has been limited and substantially less liquid than the average trading market for a stock quoted on The Nasdaq Capital Market.

Since Spring Bank’s initial listing on The Nasdaq Capital Market on May 6, 2016, the trading market in Spring Bank’s common stock has been extremely limited and substantially less liquid than the average trading market for companies quoted on The Nasdaq Capital Market. The quotation of Spring Bank’s common stock on The Nasdaq Capital Market does not assure that a meaningful, consistent and liquid trading market currently exists. Spring Bank cannot predict whether a more active market for Spring Bank’s common stock will develop in the future. An absence of an active trading market could adversely affect your ability to sell Spring Bank’s common stock at current market prices in short time periods, or possibly at all. Additionally, sales of a substantial number of shares of Spring Bank’s common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Spring Bank’s common stock even if Spring Bank’s business is doing well. Ultimately, market visibility for Spring Bank’s common stock may be limited and such lack of visibility may have a depressive effect on the market price for Spring Bank’s common stock.

The price of Spring Bank’s common stock may be volatile and fluctuate substantially, which could result in substantial losses for Spring Bank’s stockholders.

Spring Bank’s stock price is likely to be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. Because of this volatility, you may not be able to sell your common stock at or above the price at which you purchased your shares. The market price for Spring Bank’s common stock may be influenced by many factors, including:

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Spring Bank is an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make Spring Bank’s common stock less attractive to investors.

Spring Bank is an emerging growth company, as defined in the JOBS Act, and may remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the closing of Spring Bank’s initial public offering, which is December 31, 2021. However, if certain events occur prior to the end of such five-year period, including if Spring Bank becomes a “large accelerated filer,” Spring Bank’s annual gross revenues exceed $1.07 billion or Spring Bank issues more than $1.0 billion of non-convertible debt in any three-year period, Spring Bank will cease to be an emerging growth company prior to the end of such five-year period. For so long as Spring Bank remains an emerging growth company, Spring Bank is permitted and intends to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

Spring Bank has taken advantage of these reduced reporting burdens. In particular, in connection with Spring Bank’s recent offerings, Spring Bank has provided only two years of audited financial statements and Spring Bank has not included all of the executive compensation related information that would be required if Spring Bank was not an emerging growth company. Spring Bank expects to continue to take advantage of some or all of the reporting exemptions available to emerging growth companies. Spring Bank cannot predict whether investors will find Spring Bank’s common stock less attractive if Spring Bank relies on these exemptions. If some investors find Spring Bank’s common stock less attractive as a result, there may be a less active trading market for Spring Bank’s common stock and Spring Bank’s stock price may be reduced or more volatile. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies. Spring Bank has irrevocably elected not to avail itself of this exemption from new or revised accounting standards and, therefore, Spring Bank will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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Spring Bank incurs increased costs as a result of operating as a public company and Spring Bank’s management is required to devote substantial time to compliance initiatives and corporate governance practices.

As a public company, and particularly after Spring Bank is no longer an emerging growth company, Spring Bank will incur significant legal, accounting and other expenses that Spring Bank did not incur as a private company. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the exchange or market upon which Spring Bank trades and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Spring Bank’s management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased Spring Bank’s legal and financial compliance costs and will make some activities more time-consuming and costly. For example, Spring Bank expects that these rules and regulations may make it more difficult and more expensive for Spring Bank to maintain Spring Bank’s director and officer liability insurance policies at a reasonable cost, which in turn could make it more difficult for Spring Bank to attract and retain qualified members of Spring Bank’s Board of Directors.

Spring Bank cannot predict or estimate the amount of additional costs Spring Bank may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as regulatory and governing bodies provide new guidance. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

While Spring Bank remains an emerging growth company, Spring Bank is not required to include an attestation report on internal control over financial reporting issued by Spring Bank’s independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, Spring Bank is engaged in a process to document and evaluate Spring Bank’s internal control over financial reporting, which is both costly and challenging. In this regard, Spring Bank continues to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

If Spring Bank fails to maintain an effective system of disclosure controls and internal control over financial reporting, Spring Bank’s ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, Spring Bank is subject to the reporting requirements of the Securities and Exchange Commission, the Sarbanes-Oxley Act and the listing standards of the Nasdaq Capital Market, the exchange on which Spring Bank’s common stock is listed. Spring Bank expects that the requirements of these rules and regulations will continue to increase Spring Bank’s legal, accounting and financial compliance costs, make some activities more difficult, time consuming and costly and place significant strain on Spring Bank’s personnel, systems and resources.

The Sarbanes-Oxley Act requires, among other things, that Spring Bank maintain effective disclosure controls and procedures and internal control over financial reporting. Spring Bank is continuing to refine Spring Bank’s disclosure controls and other procedures that are designed to ensure that the information that Spring Bank is required to disclose in the reports that Spring Bank will file with the SEC is properly recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Spring Bank is also continuing to improve its internal control over financial reporting. Spring Bank has expended, and anticipates that it will continue to expend, significant resources in order to maintain and improve the effectiveness of its disclosure controls and procedures and internal control over financial reporting.

Spring Bank’s current controls and any new controls that Spring Bank develops in the future may become inadequate because of changes in conditions in Spring Bank’s business. Further, weaknesses in Spring Bank’s

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disclosure controls or Spring Bank’s internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm Spring Bank’s operating results or cause Spring Bank to fail to meet Spring Bank’s reporting obligations and may result in a restatement of Spring Bank’s financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of management reports and independent registered public accounting firm audits of Spring Bank’s internal control over financial reporting that Spring Bank will be required to include in Spring Bank’s periodic reports that will be filed with the SEC. If Spring Bank were to have ineffective disclosure controls and procedures or internal control over financial reporting, its investors could lose confidence in its reported financial and other information, which would likely have a negative effect on the market price of Spring Bank common stock.

Provisions in Spring Bank’s restated certificate of incorporation and amended and restated bylaws and under Delaware law could make an acquisition of Spring Bank, which may be beneficial to Spring Bank’s stockholders, more difficult and may prevent attempts by Spring Bank’s stockholders to replace or remove Spring Bank’s current management.

Provisions in Spring Bank’s restated certificate of incorporation and Spring Bank’s amended and restated bylaws may discourage, delay or prevent a merger, acquisition or other change in control of Spring Bank that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of Spring Bank’s common stock, thereby depressing the market price of Spring Bank’s common stock. In addition, because Spring Bank Board is responsible for appointing the members of Spring Bank’s management team, these provisions may frustrate or prevent any attempts by Spring Bank’s stockholders to replace or remove Spring Bank’s current management by making it more difficult for stockholders to replace members of Spring Bank Board. Among other things, these provisions include those establishing:

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Moreover, because Spring Bank is incorporated in Delaware, Spring Bank is governed by the provisions of Section 203 of the DGCL, which prohibits a person who owns in excess of 15% of Spring Bank’s outstanding voting stock from merging or combining with Spring Bank for a period of three years after the date of the transaction in which the person acquired in excess of 15% of Spring Bank’s outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Furthermore, Spring Bank’s restated certificate of incorporation specifies that, unless Spring Bank consents in writing to the selection of an alternative forum, and to the fullest extent permitted by law, as described below, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on Spring Bank’s behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against Spring Bank arising pursuant to the DGCL, Spring Bank’s amended and restated certificate of incorporation, or Spring Bank’s amended and restated bylaws; or any action asserting a claim against Spring Bank that is governed by the internal affairs doctrine. This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act. Further, Spring Bank’s amended and restated bylaws provide that, unless Spring Bank consents in writing to an alternative forum, the U.S. federal district courts will have exclusive jurisdiction for any complaint asserting a cause of action under the Securities Act. However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce this provision with respect to claims under the Securities Act, and Spring Bank’s stockholders cannot waive Spring Bank’s compliance with the federal securities laws and the rules and regulations thereunder.

Spring Bank believes these provisions provide increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, these provisions may have the effect of discouraging lawsuits against Spring Bank’s directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against Spring Bank, a court could find the choice of forum provisions contained in Spring Bank’s restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in such action.

Spring Bank’s ability to use Spring Bank’s net operating loss and credit carryforwards to offset future taxable income may be subject to certain limitations.

As of December 31, 2019, Spring Bank had a balance of federal and state net operating loss (“NOL”) carryforwards of approximately $115.6 million and $116.5 million, respectively. The federal NOL carryforwards of $61.5 million expire between 2029 and 2037 and $54.1 million carryforward indefinitely. The state NOL carryforwards expire between 2030 and 2039. Spring Bank’s ability to utilize Spring Bank’s NOL and credit carryforwards is dependent upon Spring Bank’s ability to generate taxable income in future periods and may be limited due to restrictions imposed on utilization of NOL and credit carryforwards under federal and state laws upon a change in ownership, as described in more detail below.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change,” is subject to limitations on its ability to use its pre-change NOL carryforwards, and other pre-change tax attributes (such as research tax credits) to offset its post-change taxable income. For these purposes, an ownership change generally occurs where the equity ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a three-year period (calculated on a rolling basis). Spring Bank has made a preliminary determination that an ownership change likely occurred in each of April 2012 and December 2013. However, Spring Bank anticipates that the annual limitation attributable to such ownership change will not limit its ability to use its NOLs to offset future taxable income. Spring Bank may have experienced other ownership changes in the past. The Exchange is expected to result in an additional ownership change and Spring Bank may experience ownership changes in the future, some of which are outside

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the company’s control. These ownership changes may limit the ability of Spring Bank’s to utilize its NOLs or credits under Sections 382 and 383 of the Code. Accordingly, Spring Bank may not be able to utilize a material portion of Spring Bank’s NOLs or credits. Limitations on Spring Bank’s ability to utilize Spring Bank’s NOLs to offset U.S. federal taxable income could potentially result in increased future tax liability to Spring Bank. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

Because U.S. federal NOLs arising in taxable years beginning before January 1, 2018, generally may be carried forward up to 20 years, the annual limitation under Sections 382 and 383 of the Code may effectively provide a cap on the cumulative amount of pre-ownership change losses. In addition, if an ownership change were to occur, it is possible that the limitations imposed on Spring Bank’s ability to use pre-ownership change losses and certain recognized built-in losses could cause a net increase in Spring Bank’s U.S. federal income tax liability and require U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect. Further, if for financial reporting purposes the amount or value of these deferred tax assets is reduced, such reduction could have a negative impact on the book value of Spring Bank’s common stock.

In addition to the limitations discussed above under Sections 382 and 383 of the Code, the utilization of NOLs incurred in taxable years beginning after December 31, 2017, are subject to limitations adopted by the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Under the TCJA, in general, NOLs generated in taxable years beginning after December 31, 2017 may offset no more than 80 percent of such year’s taxable income and there is no ability for such NOLs to be carried back to a prior taxable year. The CARES Act modifies the TCJA with respect to the TCJA’s limitation on the deduction of NOLs and provides that NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021, may be carried back to each of the five taxable years preceding the tax year of such loss, but NOLs arising in taxable years beginning after December 31, 2020 may not be carried back. In addition, the CARES Act eliminates the limitation on the deduction of NOLs to 80 percent of current year taxable income for taxable years beginning before January 1, 2021. As a result of such limitation, Spring Bank may be required to pay federal income tax in some future year notwithstanding that Spring Bank has a net loss for all years in the aggregate.

Because Spring Bank does not anticipate declaring or paying any cash dividends on Spring Bank’s common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

Spring Bank has never declared or paid cash dividends on Spring Bank’s common stock. Spring Bank currently intends to retain all of Spring Bank’s future earnings, if any, to finance the growth and development of Spring Bank’s business. As a result, capital appreciation, if any, of Spring Bank’s common stock will be your sole source of gain for the foreseeable future.

Spring Bank could be subject to securities class action litigation.

When the market price of a stock is volatile, holders of that stock have often initiated securities class action litigation against the company that issued the stock. This risk is especially relevant for Spring Bank because pharmaceutical companies have experienced significant stock price volatility in recent years. If Spring Bank faces such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm Spring Bank’s business. Spring Bank may not be successful in defending itself or asserting Spring Bank’s rights in future lawsuits, investigations, or claims that may be brought against Spring Bank and, as a result, Spring Bank’s business could be materially harmed. These lawsuits, arbitrations, investigations or claims may result in large judgments or settlements against Spring Bank, any of which could have a negative effect on Spring Bank’s financial performance and business. Additionally, lawsuits, arbitrations and investigations can be expensive to defend, whether or not the lawsuit, arbitration or investigation has merit, and the defense of these actions may divert the attention of Spring Bank’s management and other resources that would otherwise be engaged in running Spring Bank’s business.

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Risks Related to F-star’s Financial Position and Need for Additional Capital

F-star is a clinical-stage immuno-oncology company and have incurred significant losses since F-star’s inception. F-star expects to incur losses for the foreseeable future and may never achieve or maintain profitability.

F-star is a clinical-stage immuno-oncology company with a limited operating history. F-star incurred net losses of £35.0 million for the year ended December 31, 2019 and £10.2 million and £9.8 million for the six months ended June 30, 2020 and 2019, respectively, and net profits of £12.9 million and £3.8 million for the years ended December 31, 2018 and 2017, respectively. As of June 30, 2020, F-star had an accumulated loss of £25.7 million. F-star’s losses have resulted principally from expenses incurred in research and development, preclinical testing and clinical development of its mAb² product candidates as well as expenses incurred for research programs and from general and administrative costs associated with its operations. F-star expects to continue to incur significant and increasing operating losses for the foreseeable future as it continues its clinical trial plans, research and development efforts and seeks to obtain regulatory approval and commercialization of its tetravalent bispecific antibody (“mAb^2”) product candidates, and F-star does not know whether or when it will become profitable. F-star’s losses, among other things, will continue to cause its working capital and shareholders’ equity to decrease. F-star anticipates that its expenses will increase substantially if and as it:

To date, F-star has funded its operations through private placements of equity securities and upfront and milestone payments and expense reimbursement payments received from its collaborators. F-star has invested substantially all of its financial resources and efforts to developing its mAb² product candidates in immuno-oncology, building its intellectual property portfolio, developing its supply chain, conducting business planning, licensing F-star’s technology to its collaborators, raising capital and providing general and administrative support for these operations. F-star does not currently have any approved products and has never generated any revenue from product sales.

To become and remain profitable, F-star must succeed in developing and eventually commercializing products that generate significant revenue. This will require F-star to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of its mAb² product candidates supportive of product approval, discovering and developing additional mAb² product candidates, obtaining regulatory approval for any mAb² product candidates that successfully complete clinical trials, establishing manufacturing and marketing capabilities and ultimately selling any products for which it may obtain regulatory approval. F-star is only in the preliminary stages of most of these activities. F-star may never succeed in these activities and, even if it does, may never generate revenue that is significant enough to achieve or maintain profitability. Even if one or

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more of the mAb² product candidates that F-star develops is approved for commercial sale, F-star anticipates incurring significant costs associated with commercializing any approved product candidate. F-star’s expenses could increase beyond current expectations if F-star is required by the FDA, the EMA or other comparable foreign regulatory agencies to perform clinical trials or studies in addition to those that F-star currently anticipates. Even if F-star is able to generate revenue from the sale of any approved products, it may not become profitable and may need to obtain additional funding to continue operations.

Even if F-star achieves profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis. F-star’s failure to become and remain profitable could impair its ability to raise capital, expand its business, maintain its research and development efforts or continue its operations and you could lose some or all of your investment.

F-star’s limited operating history may make it difficult to evaluate the success of its business to date and to assess F-star’s future viability.

Since inception, F-star has invested most of its resources in developing its modular antibody technology platform, its mAb² technology and mAb² product candidates, building its intellectual property portfolio, conducting business planning, licensing its technology to its collaborators, raising capital and providing general and administrative support for these operations. F-star’s most advanced mAb² product candidate, FS118, is in a Phase 1 clinical trial in heavily pretreated patients with advanced cancer who have relapsed on programmed cell death ligand-1 (“PD-L1”), or programmed cell death protein-1, (“PD-1”), checkpoint inhibitor therapies. F-star has not yet demonstrated its ability to successfully complete any Phase 1 clinical trials, Phase 2 clinical trials or any Phase 3 or other pivotal clinical trials, obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on its behalf or conduct sales and marketing activities necessary for successful product commercialization. In addition, given its limited operating history, F-star may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors in achieving its business objectives. Additionally, F-star expects its financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond F-star’s control. Consequently, any predictions you make about the F-star’s future success or viability may not be as accurate as they could be if F-star had a longer operating history or more experience developing mAb² product candidates.

F-star will need substantial additional funding in order to complete the development and commence commercialization of its mAb² product candidates. Failure to obtain this necessary capital at acceptable terms and when needed may force it to delay, reduce or eliminate its product development programs or commercialization efforts.

F-star expects its expenses to increase in connection with its ongoing activities, particularly as F-star completes the Phase 1 clinical trial of FS118 and initiates later-stage clinical development, and continues to research, develop and initiate clinical trials of FS120, FS222 and any other mAb² product candidates. In addition, if F-star obtains regulatory approval for any of its mAb² product candidates, it expects to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

Furthermore, upon the Closing, F-star expects to incur additional costs associated with operating as a public company. Accordingly, F-star will need to obtain substantial additional funding in connection with its continuing operations. If F-star is unable to raise capital when needed or on attractive terms, it could be forced to delay, reduce or eliminate its product development programs or any future commercialization efforts.

F-star expects that its available cash and cash equivalents immediately prior to the completion of the Exchange, together with net cash held by Spring Bank upon consummation of the Exchange, the anticipated proceeds of approximately $25.0 million from the Pre-Closing Financing, the projected receipt of contingent milestones and research and development payments under its current collaborations with Merck and Denali and annual UK research and development tax refunds will enable it to fund its operating expenses, preclinical and clinical trial costs, including capped costs per the CVR Agreement towards continuing the ongoing Phase 1a/1b clinical trial of Spring Bank’s SB 11285 program and capital expenditure requirements through at least the next

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24 months. However, F-star has based this estimate on assumptions that may prove to be wrong, including raising at least $25.0 million in the Pre-Closing Financing and the timing of contingent milestones and research and development payments from the current collaborations with Merck and Denali, and it could use its capital resources sooner than it currently expects. The combined company will need to raise additional capital to complete the development and commercialization of FS118, FS120, FS222, if approved, and may also need to raise additional funds to pursue other development activities related to additional product candidates.

F-star’s future capital requirements will depend on many factors, including:

Until F-star can generate sufficient product revenue to finance its cash requirements, which it may never do, F-star expects to finance its 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 and more recently due to the COVID-19 pandemic have made equity and debt financing more difficult to obtain, and may have a material adverse effect on F-star’s ability to meet its fundraising needs.

F-star’s ability to raise additional funds will depend on financial, economic and market conditions and other factors, over which it may have no or limited control. If adequate funds are not available on commercially acceptable terms when needed, F-star may be forced to delay, reduce or terminate the development or commercialization of all or part of its research programs or mAb² product candidates or it may be unable to take advantage of future business opportunities.

Raising additional capital may cause dilution to holders of existing shareholders of F-star, restrict F-star’s operations or require F-star to relinquish rights to its technologies or mAb² product candidates.

Until such time, if ever, as F-star can generate substantial product revenues, F-star expects to finance its operations with its existing cash and cash equivalents, including the Pre-Closing Financing and revenue from its

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collaborations. In order to further advance development of its mAb² product candidates, discover additional mAb² product candidates and pursue its other business objectives, however, F-star will need to seek additional funds.

F-star cannot guarantee that future financing will be available in sufficient amounts or on commercially reasonable terms, if at all. To the extent that F-star raises additional capital by issuing equity securities, F-star’s existing shareholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect F-star’s rights as a shareholder. Equity and debt financing, if available, may involve agreements that include covenants limiting or restricting F-star’s ability to take specific actions, such as redeeming F-star’s shares, making investments, incurring additional debt, making capital expenditures or declaring dividends.

The incurrence of indebtedness could result in increased fixed payment obligations and F-star may be required to agree to certain restrictive covenants therein, such as limitations on F-star’s ability to incur additional debt, limitations on F-star’s ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely affect F-star’s ability to conduct its business.

If F-star is unable to obtain funding on a timely basis, F-star may be required to significantly curtail, delay or discontinue one or more of its research or development programs or the commercialization of any of its mAb² product candidates, if approved, or be unable to expand its operations or otherwise capitalize on its business opportunities, as desired, which could materially affect its business, financial condition and results of operations.

F-star will need to hire additional qualified accounting personnel in order to remediate material weaknesses in its internal control over financial reporting, and F-star will need to expend any additional resources and efforts that may be necessary to establish and to maintain the effectiveness of its internal control over financial reporting and its disclosure controls and procedures.

Although F-star is not yet subject to the certification or attestation requirements of Section 404 of the Sarbanes-Oxley Act, in connection with the preparation and audit of its financial statements for the year ended December 31, 2019, its management identified two material weaknesses related to its financial reporting process. PCAOB guidance regarding management’s report on internal control over financial reporting defines a material weakness as a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of its annual or interim financial statements will not be prevented or detected and corrected on a timely basis. As a result, the financial statements for the years ended December 31, 2017 and 2018 required restatements related to income taxes. Additionally, these material weaknesses could result in further misstatements of account balances or disclosures that could result in further material misstatements to the F-star annual or interim consolidated financial statements that would not be prevented or detected.

These material weaknesses relate to (i) the lack of formal policies and procedures and sufficient complement of personnel to implement effective segregation of duties and (ii) the company did not have sufficient formality and evidence of controls over key reports and spreadsheets.

F-star has commenced measures to remediate these material weaknesses and it intends to hire additional finance and accounting personnel with appropriate expertise to perform specific functions and allow for proper segregation of duties, design key controls and implement improved processes and internal controls, build its financial management and reporting infrastructure, and further develop and document its accounting policies and financial reporting procedures, including ongoing senior management review and audit committee oversight.

There can be no assurance that F-star will be successful in pursuing these measures or that these measures will significantly improve or remediate the material weaknesses described above. There is also no assurance that F-star has identified all of its material weaknesses or that F-star will not in the future have additional material weaknesses. If F-star fails to remediate the material weaknesses or to meet the demands that will be placed upon it as a public company, including the requirements of the Sarbanes-Oxley Act, F-star may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in F-star’s financial reporting, and F-star’s

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share price may decline as a result. F-star also could become subject to investigations by Nasdaq, the SEC or other regulatory authorities.