What changed in this filing

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Item 1. Financial Statements

2021-11-09 compared with 2021-08-10 · 127 added, 94 removed, 397 unchanged (36% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

4 unchanged sentences

Accounts receivable

Tax refund receivable

Income tax receivable

Prepaid expenses and other current assets

14 unchanged sentences

200,000,000 shares authorized;

39,693,524 and 37,142,946 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

39,702,768 and 37,142,946 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

11 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Operating expenses:

11 unchanged sentences

Interest income

Other income (expense), net

Total other income, net

Other (expense) income, net

Total other (expense) income, net

Net loss before income tax benefit

8 unchanged sentences

( 38,422,700 )

Other comprehensive income (loss) — unrealized gain (loss) on short-term investments

Other comprehensive (loss) income — unrealized (loss) gain on short-term investments

Comprehensive loss

40 unchanged sentences

( 5,038,240 )

Stock-based compensation

Exercise of stock options

Vesting of restricted stock awards including withholding, net

Issuance of common stock from Employee Stock Purchase Plan

Unrealized loss on short-term investments

( 33,510,688 )

Balance at September 30, 2021

( 269,282,102 )

( 5,040,163 )

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

27 unchanged sentences

( 5,031,703 )

Stock-based compensation

Issuance of common stock from exercise of stock options

Vesting of restricted stock awards including withholding, net

Issuance of common stock from Employee Stock Purchase Plan

Issuance of common stock and pre-funded warrants in public offering, net

Issuance of common stock in at-the-market offerings, net

Issuance of common stock upon exercise of warrants

Unrealized loss on short-term investments

( 17,770,135 )

Balance at September 30, 2020

( 175,798,822 )

( 5,042,272 )

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

9 unchanged sentences

Accounts receivable

( 2,815,343 )

Prepaid expenses and other current assets

2 unchanged sentences

Accrued expenses and other liabilities

Income tax receivable

( 1,713,642 )

Tax refund receivable

( 5,564,759 )

10 unchanged sentences

Cash paid for internally developed patents

Net cash provided by investing activities

Net cash provided by (used in) investing activities

( 35,226,668 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Proceeds from issuance of common stock in at-the-market offerings, net

Proceeds from issuance of common stock and pre-funded warrants in public offering, net

Proceeds from issuance of notes payable

Payments of notes payable

Proceeds from issuance of common stock from Employee Stock Purchase Plan

4 unchanged sentences

Cash, cash equivalents and restricted cash at end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES:

Operating lease liability and right of use asset addition

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

5 unchanged sentences

The Company is focused on developing treatments for obesity and liver diseases.

The Company’s pipeline includes next generation peptide therapeutics for obesity, NASH (ALT-801) and chronic hepatitis B (HepTcell);

proprietary intranasal vaccines;

and an intranasal immune modulating therapeutic for the coronavirus disease (“COVID 19”) (T-COVID).

The Company’s pipeline includes proprietary intranasal vaccines and next generation peptide therapeutics for obesity, NASH (pemvidutide, proposed INN, formerly known as ALT-801) and chronic hepatitis B (HepTcell).

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of common and preferred stock, long-term debt, and proceeds from research grants and government contracts.

The Company has not generated any revenues from the sale of any products to date, and there is no assurance of any future revenues from product sales.

On June 29, 2021, the Company announced the discontinuation of the development program for the COVID-19 vaccine candidate, AdCOVID following the Company’s review of findings from the Phase 1 clinical trial, and in view of the highly competitive COVID-19 landscape.

The Company is currently evaluating options for the future development of T-COVID as a result of enrollment challenges due to the effective rollout in the United States of authorized COVID-19 vaccines and decreasing incidence of the disease.

Basis of Presentation

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Summary of Significant Accounting Policies

During the six months ended June 30, 2021, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC, except for the recently adopted accounting standard for income taxes.

During the nine months ended September 30, 2021, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC, except for the recently adopted accounting standard for income taxes.

Use of Estimates

1 unchanged sentence

GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The extent to which the COVID-19 pandemic may directly or indirectly impact the Company’s business, financial condition, and results of operations is highly uncertain and subject to change.

The Company considered the potential impact of the COVID-19 pandemic on the Company’s estimates and assumptions and determined that there was not a material impact to the Company’s unaudited consolidated financial statements as of and for the three and six months ended June 30, 2021.

The extent to which the COVID-19 pandemic, including any resurgences or the emergence of new variants, may directly or indirectly impact the Company’s business, financial condition, and results of operations is highly uncertain and subject to change.

However, actual results could differ from those estimates and there may be changes to the Company’s estimates in future periods.

3 unchanged sentences

ASU 2019-12 amends the approaches and methodologies in accounting for income taxes during interim periods and makes changes to certain income tax classifications.

The new standard allows exceptions to the use of the incremental approach for intra-period tax allocation, when there is a loss from continuing operations and income or a gain from other items, and to the general methodology for calculating income taxes in an interim period, when a year-to-date loss exceeds the anticipated loss for the year.

The new standard eliminates the legacy exceptions to the general guidance for intra-period tax allocation, when there is a loss from continuing operations and income or a gain from other items, and to the general methodology for calculating income taxes in an interim period, when a year-to-date loss exceeds the anticipated loss for the year.

The standard also requires franchise or similar taxes partially based on income to be reported as income tax and the effects of enacted changes in tax laws or rates to be included in the annual effective tax rate computation from the date of enactment.

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Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2021 consisted of the following:

Fair Value Measurement at June 30, 2021

The Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2021 consisted of the following:

Fair Value Measurement at September 30, 2021

Cash equivalents - money market funds

10 unchanged sentences

Short-term investments have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data (Level 2).

The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

Short-term investments had quoted prices at June 30, 2021 as shown below:

June 30, 2021

The pricing services

utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

Short-term investments had quoted prices at September 30, 2021 as shown below:

September 30, 2021

Unrealized Gain

Amortized Cost

United States treasury securities

Commercial paper and corporate debt securities

Asset backed securities

Certificate of deposit

8 unchanged sentences

The fair value of contingent payments classified as a liability is based on the regulatory milestones described in Note 8 and estimated using the Monte Carlo simulation valuation model with Level 3 inputs.

The assumptions used to estimate the fair value of contingent payments that are classified as a liability at June 30, 2021 include the following significant unobservable inputs:

The assumptions used to estimate the fair value of contingent payments that are classified as a liability at September 30, 2021 include the following significant unobservable inputs:

Unobservable input

7 unchanged sentences

Projected year of payment

If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs.

There were no transfers into and out of any of the levels of the fair value hierarchy as of June 30, 2021 and December 31, 2020.

If applicable, the Company will recognize transfers into and out of Level 3 within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs.

There were no transfers into or out of Level 3 of the fair value hierarchy as of September 30, 2021 and December 31, 2020.

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis.

Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired.

As of June 30, 2021, the Company recorded a non-cash impairment charge to property and equipment, net on a non-recurring basis (see below).

During the nine months ended September 30, 2021, the Company recorded a non-cash impairment charge to property and equipment, net on a non-recurring basis (see below).

As of December 31, 2020, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

Property and Equipment, Net

During the three and six months ended June 30, 2021, the Company recorded a non-cash impairment charge of $ 8.1 million to property and equipment, net.

The fair value of the impaired assets was $ 3.3 million at June 30, 2021.

At June 30, 2021, the fair value of the assets related to construction-in-progress were primarily determined utilizing the cost approach, which determines the current replacement cost of the asset being appraised and then deducts for the loss in value caused by contractual restrictions on the asset, physical deterioration, functional obsolescence, and economic obsolescence the amount required to replace the asset as if new and adjusts to reflect usage.

The fair value measurement is considered Level 3 measurements within the valuation hierarchy.

During the nine months ended September 30, 2021, the Company recorded a non-cash impairment charge of $ 8.1 million to property and equipment, net.

The fair value of the impaired assets was $ 3.3 million at September 30, 2021.

At September 30, 2021, the fair value of the construction-in-progress related assets was primarily determined utilizing the cost approach, which reflects the current replacement cost of the asset being appraised, adjusted for contractual restrictions

on the assets, the probability of satisfying the contractual restrictions, physical deterioration, functional obsolescence, and economic obsolescence.

The fair value measurement is considered a Level 3 measurement within the valuation hierarchy.

Property and Equipment, Net

Property and equipment, net consists of the following:

June 30, 2021

September 30, 2021

December 31, 2020

9 unchanged sentences

Property and equipment, net

As of June 30, 2021, construction-in-progress primarily includes costs related to the procurement of long-lead equipment and build out of the suite associated with the Company’s manufacturing collaboration with Lonza Houston, Inc.

As of September 30, 2021, construction-in-progress primarily includes costs related to the procurement of long-lead equipment associated with the Company’s manufacturing collaboration with Lonza Houston, Inc.

(“Lonza”) for the manufacture of AdCOVID or other adenovirus-based vaccines.

Under the agreement, the Company has committed approximately $ 23.0 million to Lonza to procure long-lead equipment and construct a dedicated manufacturing suite for clinical and commercial production of adenovirus-based vaccines.

This work is expected to be completed by the end of 2021.

This work is expected to be completed during the fourth quarter of 2021.

In June 2021, the Company announced the discontinuation of further development of AdCOVID following the Company’s review of findings from the Phase 1 clinical trial.

1 unchanged sentence

The Company’s current expectation is that, more likely than not, the suite will be disposed of significantly before the end of its previously estimated useful life.

As of June 30, 2021, the Company recorded $ 8.1 million of impairment loss on construction-in-progress in the accompanying unaudited consolidated statements of operations and comprehensive loss, with $ 3.3 million remaining capitalized in the unaudited consolidated balance sheet, as it represents expected recoveries available to the Company under the construction contract.

Depreciation expense related to property and equipment was approximately $ 68,450 and $ 60,664 for the three months ended June 30, 2021 and 2020, respectively, and $ 136,108 and $ 120,169 for the six months ended June 30, 2021 and 2020, respectively.

As of September 30, 2021, the Company recorded $ 8.1 million of impairment loss on construction-in-progress in the accompanying unaudited consolidated statements of operations and comprehensive loss, with $ 3.3 million remaining capitalized in the unaudited consolidated balance sheet, as it represents expected recoveries available to the Company under the construction contract.

Following the discontinuation of AdCOVID, incremental cost incurred under the construction contract has been recorded to research and development expenses in the accompanying unaudited consolidated statements of operations and comprehensive loss.

Research and development expenses related to property and equipment was approximately $ 9.6 million and $ 17.7 million for the three and nine months ended September 30, 2021, respectively.

Depreciation expense related to property and equipment was approximately $ 0.1 million and $ 0.1 million for the three months ended September 30, 2021 and 2020, respectively, and $ 0.2 million and $ 0.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Intangible Assets

The Company’s intangible assets consists of the following:

June 30, 2021

The Company’s intangible assets consist of the following:

September 30, 2021

Internally developed patents

7 unchanged sentences

Total intangible assets subject to amortization

Amortization expense of intangible assets was $ 6,640 and $ 12,025 for the three months ended June 30, 2021 and 2020, respectively, and $ 13,280 and $ 25,876 for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, the weighted average amortization period remaining for intangible assets was 12.2 years.

Amortization expense of intangible assets was $ 6,641 and $ 10,406 for the three months ended September 30, 2021 and 2020, respectively, and $ 19,920 and $ 36,282 for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, the weighted average amortization period remaining for intangible assets was 12.0 years.

Amortization expense was classified as research and development expenses in the accompanying unaudited consolidated statements of operations and comprehensive loss.

1 unchanged sentence

The Company rents office and laboratory space in the United States.

The Company also leases office equipment under a non-cancellable equipment lease through December 2022 .

Rent expense during the three and six months ended June 30, 2021 under all of the Company’s operating leases was $ 123,734 and $ 253,872 , respectively.

Rent expense during the three and six months ended June 30, 2020 under all of the Company’s operating leases was $ 86,295 and $ 173,894 , respectively.

The Company also leases office equipment under non-cancellable equipment leases through June 2026 .

Rent expense during the three and nine months ended September 30, 2021 under all of the Company’s operating leases was $ 0.1 million and $ 0.4 million, respectively.

Rent expense during the three and nine months ended September 30, 2020 under all of the Company’s operating leases was $ 0.1 million and $ 0.3 million, respectively.

Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation.

4 unchanged sentences

The Company has determined that the lease renewal option is not reasonably certain of being exercised.

The cash paid for operating lease liabilities for the three and six months ended June 30, 2021 was $ 118,843 and $ 236,197 , and for the three and six months ended June 30, 2020 was $ 96,770 and $ 192,484 , respectively.

The cash paid for operating lease liabilities for the three and nine months ended September 30, 2021 was $ 0.1 million and $ 0.4 million, respectively, and for the three and nine months ended September 30, 2020 was $ 0.1 million and $ 0.3 million, respectively.

Supplemental other information related to the operating leases balance sheet information is as follows:

June 30, 2021

September 30, 2021

December 31, 2020

6 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

June 30, 2021

September 30, 2021

December 31, 2020

20 unchanged sentences

The Regulatory Milestones will be payable in shares of the Company’s Common Stock, with the number of shares of the Company’s Common Stock to be issued in connection with each milestone amount, if any, are dependent on the share price at the time of achievement.

The number of any shares issued in consideration for the IND Milestone Consideration Amount will be determined based on lower of (A) the average of the closing prices of our Common Stock

as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days prior to the IND Reference Date or (B) $ 2.95 .

The number of any shares issued in consideration for the IND Milestone Consideration Amount will be determined based on lower of (A) the average of the closing prices of our Common Stock as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days prior to the IND Reference Date or (B) $ 2.95 .

The value of any shares issued in consideration for the Phase 2 Milestone Consideration Amount shall be determined based the lower of (A) on the average of the closing trading prices of our Common Stock as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days immediately preceding the date of the occurrence of the Phase 2 Milestone Event or (B) $ 3.54 .

7 unchanged sentences

Below is a summary of the contingent consideration activity:

Six Months Ended June 30,

Nine Months Ended September 30,

Beginning balance

1 unchanged sentence

Ending balance

As of June 30, 2021, the decrease in fair value was primarily attributable to a decrease in the closing share price of the Company’s common stock, partially offset by an increase in the probability of milestone achievement.

As of June 30, 2020, the increase in fair value was primarily attributable to an increase in the closing share price of the Company’s common stock and in the probability of milestone achievement.

As of September 30, 2021 and 2020, the increase in fair value was primarily attributable to an increase in the closing share price of the Company’s common stock and in the probability of milestone achievement.

Any changes in fair value have been recorded within research and development expense during the respective periods presented.

1 unchanged sentence

The Company’s other long-term liabilities are summarized as follows:

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

On July 16, 2020, the Company offered and sold (i) 3,369,564 shares of common stock, at a price to the public of $ 23.00 per share, and (ii) pre-funded warrants of the Company to purchase 1,630,436 shares of common stock at an exercise price equal to $ 0.0001 per share (the “Pre-Funded Warrants”), at a price to the public of $ 22.9999 per share of common stock underlying the Pre-Funded Warrants (equal to the public offering price per share of Common Stock, minus the exercise price of each Pre-Funded Warrant).

The Pre-Funded Warrants are exercisable at any time, provided that each Pre-Funded Warrant holder will be prohibited from exercising such Pre-Funded Warrants into shares of the Company’s common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99 % of the total number of shares of the Company’s common stock then issued and outstanding, which percentage may change at the

holders’ election to any other number less than or equal to 19.99 % upon 61 days ’ notice to the Company.

The Pre-Funded Warrants are exercisable at any time, provided that each Pre-Funded Warrant holder will be prohibited from exercising such Pre-Funded Warrants into shares of the Company’s

common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99 % of the total number of shares of the Company’s common stock then issued and outstanding, which percentage may change at the holders’ election to any other number less than or equal to 19.99 % upon 61 days ’ notice to the Company.

The gross proceeds of this offering were approximately $ 132.2 million, which includes the exercise in full of the underwriters’ option to purchase an additional 750,000 shares of common stock, before deducting underwriting discounts and commissions and offering expenses during the third quarter of 2020.

3 unchanged sentences

Accordingly, the Pre-Funded Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance.

As of June 30, 2021, no Pre-Funded Warrants were exercised.

As of September 30, 2021, no Pre-Funded Warrants were exercised.

At-the-Market Offerings

2 unchanged sentences

Any Shares offered and sold in the 2021 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on December 31, 2020, which was declared effective on January 11, 2021, the prospectus supplement relating to the 2021 Offering filed with the SEC on February 25, 2021 and any applicable additional prospectus supplements related to the 2021 Offering that form a part of the Registration Statement.

As of June 30, 2021, the Company has sold 3,516,510 shares of Common Stock under the 2021 Agreement resulting in approximately $ 52.4 million in net proceeds, with $ 70.9 million remaining available to be sold under the 2021 Agreement.

As of June 30, 2021, the Company recorded approximately $ 0.1 million of offering costs which offset the proceeds received from the shares sold through June 30, 2021 and recognized approximately $ 0.1 million of deferred offering costs which will offset future proceeds received under the 2021 Agreement.

As of September 30, 2021, the Company has sold 3,516,510 shares of Common Stock under the 2021 Agreement resulting in approximately $ 52.4 million in net proceeds, with $ 70.9 million remaining available to be sold under the 2021 Agreement.

As of September 30, 2021, the Company recorded approximately $ 0.1 million of offering costs which offset the proceeds received from the shares sold through September 30, 2021 and recognized approximately $ 0.1 million of deferred offering costs which will offset future proceeds received under the 2021 Agreement.

O n March 27, 2020, the Company entered into an Equity Distribution Agreement (the “2020 Agreement”) with JMP Securities LLC, serving as placement agent (the “Placement Agent”) with respect to an at-the-market offerings program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $ 0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $ 50.0 million (the “Shares”) through the Placement Agent (the “2020 Offering”).

3 unchanged sentences

On June 1, 2020, the Company filed an amendment to the 2020 Agreement which amended the prospectus supplement dated March 27, 2020 to increase the aggregate offering price to $ 50.0 million.

As of June 30, 2020, the Company sold 2,965,144 shares of Common Stock under the amended 2020 Agreement resulting in $ 22.8 million in net proceeds.

As of June 30, 2021, the 2020 Agreement was fully utilized and no Shares were sold under the 2020 Agreement during the three and six months ended June 30, 2021.

As of September 30, 2020, the Company sold 3,213,009 shares of Common Stock under the amended 2020 Agreement resulting in $ 25.6 million in net proceeds.

The 2020 Agreement was fully utilized during the year ended December 31, 2020, and no Shares were sold under the 2020 Agreement during the three and nine months ended September 30, 2021.

Exchange Agreement

for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.0001 per share.

On February 25, 2021, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of the Company’s common stock, par value $ 0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.0001 per share.

The Exchange Warrants do not expire and are exercisable at any time except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99 % of the Company’s common stock, subject to certain exceptions.

2 unchanged sentences

The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants.

As of June 30, 2021, none of the Exchange Warrants have been exercised.

A summary of warrant activity during the six months ended June 30, 2021 is as follows:

As of September 30, 2021, none of the Exchange Warrants have been exercised.

A summary of warrant activity during the nine months ended September 30, 2021 is as follows:

Warrants outstanding, December 31, 2020

Exchanges (see Note 10)

Warrants outstanding, June 30, 2021

As of June 30, 2021, all of the common stock warrants that were previously classified as a liability were exercised in full.

Warrants outstanding, September 30, 2021

As of September 30, 2021, all of the common stock warrants that were previously classified as a liability were exercised in full.

Stock-Based Compensation

1 unchanged sentence

The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years .

At June 30, 2021, there was $ 10.9 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 3.0 years.

During the six months ended June 30, 2021, the Company granted 907,000 stock options with a weighted average exercise price of $ 15.00 and per share weighted average grant date fair value of $ 12.35 .

Information related to stock options outstanding at June 30, 2021 is as follows:

At September 30, 2021, there was $ 11.3 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 2.6 years.

During the nine months ended September 30, 2021, the Company granted 1,075,700 stock options with a weighted average exercise price of $ 15.07 and per share weighted average grant date fair value of $ 12.38 .

Information related to stock options outstanding at September 30, 2021 is as follows:

Weighted-Average

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Restricted Stock

At June 30, 2021, the Company had unvested restricted stock of 114,363 shares with total unrecognized compensation expense of $ 0.4 million, which the Company expects to recognize over a weighted average period of approximately 1.4 years.

During the six months ended June 30, 2021, the Company released 40,363 shares of common stock from restriction as a result of the vesting of restricted stock.

During the six months ended June 30, 2021, the Company granted 196,279 shares of restricted stock units which vest over four years .

At June 30, 2021, the Company had unvested restricted stock units of 211,279 shares with total unrecognized compensation expense of $ 2.7 million, which the Company expects to recognize over a weighted average period of approximately 3.6 years.

At September 30, 2021, the Company had unvested restricted stock of 94,181 shares with total unrecognized compensation expense of $ 0.3 million, which the Company expects to recognize over a weighted average period of approximately 1.2 years.

During the nine months ended September 30, 2021, the Company released 60,545 shares of common stock from restriction as a result of the vesting of restricted stock.

During the nine months ended September 30, 2021, the Company granted 196,279 shares of restricted stock units which vest over four years .

At September 30, 2021, the Company had unvested restricted stock units of 207,529 shares with total unrecognized compensation expense of $ 2.5 million, which the Company expects to recognize over a weighted average period of approximately 3.4 years.

During the nine months ended September 30, 2021, the Company released 3,750 shares of common stock from restriction as a result of the vesting of restricted stock units.

2019 Employee Stock Purchase Plan

Under the Employee Stock Purchase Plan, employees purchased 8,733 shares for $ 0.1 million during the six months ended June 30, 2021.

During the three and six months ended June 30, 2021, the Company recognized compensation expense of $ 0.1 million and $ 0.2 million, respectively.

Under the Employee Stock Purchase Plan, employees purchased 24,100 shares for $ 0.2 million during the nine months ended September 30, 2021.

During the three and nine months ended September 30, 2021, the Company recognized compensation expense of $ 28,811 and $ 0.3 million, respectively.

Stock-based Compensation Expense

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and 2020 as follows:

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020 as follows:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Research and development

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Under the contract, MTEC will pay the Company a firm fixed fee based upon the achievement of certain milestones for conduct and completion of a Phase 1/2 study and research and development work on the replication-deficient adenovirus 5 (“RD-Ad5”) vector vaccine platform.

For the six months ended June 30, 2021, the Company has recognized approximately $ 0.5 million of grant revenue under the contract.

For the nine months ended September 30, 2021, the Company has recognized approximately $ 0.5 million of grant revenue under the contract.

For the three and nine months ended September 30, 2020, the Company recognized $ 2.3 million of grant revenue under the contract.

In July 2016, the Company signed a five-year contract with BARDA.

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Under the contract, BARDA pays the Company a fixed fee and reimburses certain costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through cGMP manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity.

The contract consists of an initial base performance period providing approximately $ 27.8 million in funding for the period July 2016 through September 2021.

The contract consists of an initial base performance period providing approximately $ 30.9 million in funding for the period July 2016 through December 2021.

BARDA has seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical studies.

Each option, if exercised by BARDA, would provide additional funding ranging from approximately $ 1.1 million to $ 34.4 million for a three-year period beginning in 2021.

For the three and six months ended June 30, 2021, the Company has recognized approximately $ 0.1 million and $ 0.3 million, respectively, of grant revenue under the current BARDA contract.

For the three and six months ended June 30, 2020, the Company recognized approximately $ 0.5 million and $ 2.1 million, respectively, of grant revenue under the current BARDA contract.

Due to a full valuation allowance, the Company did not record an income tax benefit for the six months ended June 30, 2021.

For the three and nine months ended September 30, 2021, the Company has recognized approximately $ 0.1 million and $ 0.4 million, respectively, of grant

revenue under the current BARDA contract.

For the three and nine months ended September 30, 2020, the Company recognized approximately $ 0.6 million and $ 2.7 million, respectively, of grant revenue under the current BARDA contract.

Due to a full valuation allowance, the Company did not record an income tax benefit for the nine months ended September 30, 2021.

With respect to the prior year, on March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The CARES Act provided both stimulus measures and a number

of tax provisions, including:

The CARES Act provided both stimulus measures and a number of tax provisions, including:

temporary changes regarding the utilization and carry back of net operating losses, temporary changes to the prior and future limitations on interest deductions, technical corrections from prior tax legislation for tax depreciation of qualified improvement property, and certain refundable employee retention credits.

As of June 30, 2020, the Company recognized a total tax benefit of $ 4.8 million related to the carry back of losses back to obtain a refund of its 2016 tax liability.

As of September 30, 2020, the Company recognized a total tax benefit of $ 5.3 million related to the carry back of losses back to obtain a refund of its 2016 tax liability.

Net Loss Per Share

5 unchanged sentences

Potential common shares issuable upon conversion, vesting or exercise of unvested restricted stock, common stock warrants, and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows:

For the Three and Six

June 30, 2021

June 30, 2020

For the Three and Nine

September 30, 2021

September 30, 2020

Common stock warrants

6 unchanged sentences

Lonza Manufacturing Agreement

In March 2021, the Company expanded its manufacturing collaboration with Lonza in connection with the Manufacturing Agreement entered into in November 2020 for the manufacture of AdCOVID.

Under the expanded agreement, the Company has committed approximately $ 23.0 million to Lonza to procure long-lead equipment and construct a dedicated manufacturing suite for clinical and commercial production of AdCOVID.

As of June 30, 2021, the Company decided to discontinue further development of AdCOVID.

In March 2021, the Company expanded its manufacturing collaboration with Lonza in connection with the Manufacturing Agreement entered into in November 2020 for the manufacture of AdCOVID or other adenovirus-based

As of September 30, 2021, the Company had $ 2.0 million in remaining commitments under the agreement.

In June 2021, the Company discontinued further development of AdCOVID.

Refer to Note 4 for further details.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements