What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-25 compared with 2021-03-31 · 436 added, 513 removed, 203 unchanged (82% of the section changed)

FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and Board of Directors of

Actinium Pharmaceuticals, Inc.

Opinion on the Financial

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Pharmaceuticals, Inc.

on the Financial Statements

We have audited the accompanying

consolidated balance sheets of Actinium Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2020 and 2019, the related

consolidated statements of operations, stockholders’

equity and cash flows for each of the years ended December 31, 2020 and 2019,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations

and its cash flows for each of years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control

over financial reporting.

(the “Company”) as of December 31, 2021 and 2020, the

related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the

period ended December 31, 2021 and the related notes (collectively referred to as the “financial statements”).

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021

in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from

the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Marcum llp

We have served as the Company’s auditor since 2012 .

Houston, Texas

have served as the Company’s auditor since 2012 .

March 25, 2022

Actinium Pharmaceuticals, Inc.

Pharmaceuticals, Inc.

Consolidated Balance Sheets

2 unchanged sentences

Cash and cash equivalents

Restricted cash –

Restricted cash – current

Security deposit

Prepaid expenses and other current assets

5 unchanged sentences

Restricted cash

Liabilities and Stockholders’

Liabilities and Stockholders’ Equity

Current Liabilities:

Accounts payable and accrued expenses

Other liability

Operating leases current liability

5 unchanged sentences

Commitments and contingencies

Stockholders’

Stockholders’ Equity:

Preferred stock, $ 0.001 par value;

5 unchanged sentences

Accumulated deficit

Total Stockholders’

Total Liabilities and Stockholders’

See accompanying notes to the consolidated

financial statements.

Actinium Pharmaceuticals, Inc.

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes to the consolidated financial statements.

Pharmaceuticals, Inc.

Consolidated Statements of Operations

1 unchanged sentence

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

Other Revenue

Total revenue

Operating expenses:

8 unchanged sentences

Net loss applicable to common stockholders

Loss per common share - basic and diluted

Net loss per common share - basic and diluted

Weighted average common shares outstanding - basic and diluted

See accompanying notes to the consolidated

financial statements.

Actinium Pharmaceuticals, Inc.

Consolidated Statement of Changes in Stockholders’

accompanying notes to the consolidated financial statements.

Pharmaceuticals, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended December 31, 2021 and 2020

1 unchanged sentence

Additional Paid-In

Stockholders’

Balance, January 1, 2020

$ ( 208,758 )

Stock-based compensation

Sale of common stock and warrants, net of offering costs

Issuance of common stock from exercise of pre-funded warrants

Issuance of common stock from exercise of warrants

1 unchanged sentence

Balance, December 31, 2020

$ ( 230,974 )

Stock-based compensation

Sale of common stock and warrants, net of offering costs

Issuance of common stock from exercise of pre-funded warrants

Issuance of common stock from exercise of warrants

Deemed dividend for warrant down-round protection provision

Sale of common stock, net of offering costs

Issuance of common stock from exercise of stock options

Balance, December 31, 2021

See accompanying notes to the consolidated

financial statements.

Actinium Pharmaceuticals, Inc.

$ ( 255,748 )

accompanying notes to the consolidated financial statements.

Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

9 unchanged sentences

Accounts payable and accrued expenses

Other liability

Operating lease liabilities

7 unchanged sentences

Proceeds from sales of shares of common stock and warrants, net of offering costs

Proceeds from the exercise of stock options

Proceeds from the exercise of warrants

7 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Prepaid expenses financed by accounts payable

Deemed dividend for warrant down-round protection provision

See accompanying notes to the consolidated

financial statements.

Actinium Pharmaceuticals, Inc.

accompanying notes to the consolidated financial statements.

Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

Note 1 - Description of Business and

Summary of Significant Accounting Policies

Nature of Business

- Actinium Pharmaceuticals, Inc.

(the “Company”, “Actinium”, or “We”) is a clinical-stage,

biopharmaceutical company focused on developing and potentially commercializing therapies for targeted conditioning prior to cell

therapies such as a BMT or Bone Marrow Transplant or CAR-T, a type of cellular therapy that

genetically alters a patient’s own T cells to target and kill their cancer cells, and for other adoptive cell therapies.

In addition, the Company is also developing potential therapies for targeting and killing of cancer cells either as single agents

or in combination with other drugs.

Principles of Consolidation

- The consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned

subsidiaries.

1 - Description of Business and Summary of Significant Accounting Policies

of Business - Actinium Pharmaceuticals, Inc.

(the “Company”, “Actinium”,

or “We”) is a clinical-stage, biopharmaceutical company focused on developing and potentially commercializing targeted radiotherapies

for patients with unmet needs.

The Company applies its proprietary technology platform consisting of over 170 patients, know-how and clinical

experience in approximately 600 patients to develop novel therapies for blood cancer and solid tumor indications.

Its clinical and preclinical

development programs utilize multiple isotopes including Actinium-225, Iodine-131 and Lutetium-177 directed at multiple validated cancer

targets including CD45, CD33, CD38, CD47, HER2 and HER3 for targeted conditioning prior to cell and gene therapies including bone marrow

transplant and cancer therapeutics as single agents or in combination with other therapeutic modalities.

of Consolidation - The consolidated financial statements include the Company’s accounts and those of the Company’s wholly

owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

in Financial Statement Presentation - The preparation of these consolidated financial statements in conformity with accounting

principles generally accepted in the United States of America requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of

expenses during the reporting period.

of Estimates in Financial Statement Presentation - The preparation of these consolidated financial statements in conformity with

accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses

during the reporting period.

Actual results could differ from those estimates.

Reverse Stock Split

In August 2020, the

Company effected a reverse stock split of its outstanding common stock by combining outstanding shares of common stock into a lesser

number of outstanding shares of common stock by a ratio of 1-for-30.

Accordingly, all common share and per common share data in

these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of

this reverse stock split for all periods presented.

Impact of COVID–19

Pandemic on Financial Statements

In December 2019, a

novel strain of COVID-19 was reported in China.

Since then, COVID-19 has spread globally.

The spread of COVID-19 from China to

other countries has resulted in the World Health Organization (“WHO”) declaring the outbreak of COVID-19 as a “pandemic,”

or a worldwide spread of a new disease, on March 11, 2020.

Many countries around the world have imposed quarantines and restrictions

on travel and mass gatherings to slow the spread of the virus and have closed non-essential businesses, and many local jurisdictions

continue to have such restrictions in place.

As local jurisdictions

continue to put restrictions in place, the Company’s ability to continue to operate its business may also be limited.

events may result in a period of business, supply and drug product manufacturing disruption, and in reduced operations, any of

which could materially affect the Company’s business, financial condition and results of operations.

In response to COVID-19,

the Company implemented remote working and thus far, has not experienced a significant disruption or delay in its operations as

it relates to the clinical development or drug production of our drug candidates.

The spread of COVID-19,

which has caused a broad impact globally, may materially affect the Company economically.

While the ultimate economic impact brought

by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, including new information which may emerge

concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others, the pandemic has resulted

in significant disruptions in the general commercial activity and the global economy and caused financial market volatility and

uncertainty in significant and unforeseen ways in the recent months.

A continuation or worsening of the levels of market disruption

and volatility seen in the recent past could have an adverse effect on the Company’s ability to access capital, which could

in the future negatively affect the Company’s liquidity.

In addition, a recession or market correction resulting from the

spread of COVID-19 could materially affect the Company’s business and the value of the Company’s common stock.

Additionally, COVID-19

may result in delays in receiving approvals from local and foreign regulatory authorities, delays in necessary interactions with

IRB’s or Institutional Review Boards, local and foreign regulators, ethics committees and other important agencies and contractors

of COVID–19 Pandemic on Financial Statements - The global health crisis caused by the novel coronavirus (“COVID-19”)

pandemic and its resurgences has and may continue to negatively impact global economic activity, which, despite progress in vaccination

efforts, remains uncertain and cannot be predicted with confidence.

In addition, the Omicron variant of COVID-19, which appears to be

the most transmissible variant to date, has spread globally.

The full impact of the Omicron variant, or any subsequent variants, cannot

be predicted at this time, and could depend on numerous factors, including vaccination rates among the population, the effectiveness

of COVID-19 vaccines against the Omicron variant and subsequent variants and the response by governmental bodies and regulators.

countries around the world have continued to impose quarantines and restrictions on travel and mass gatherings to slow the spread of

Accordingly, the Company’s ability to continue to operate its business may also be limited.

Such events may result in

a period of business, supply and drug product manufacturing disruption, and in reduced operations, any of which could materially affect

the Company’s business, financial condition and results of operations.

In response to COVID-19, the Company implemented remote

working and thus far, has not experienced a significant disruption or delay in its operations as it relates to the clinical development

or drug production of our drug candidates.

A continuation or worsening of the levels of market disruption and volatility seen in

the recent past could have an adverse effect on the Company’s ability to access capital, which could in the future negatively affect

the Company’s liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect

the Company’s business and the value of the Company’s common stock.

Additionally,

COVID-19 may result in delays in receiving approvals from local and foreign regulatory authorities, delays in necessary interactions

with IRB’s or Institutional Review Boards, local and foreign regulators, ethics committees and other important agencies and contractors

due to limitations in employee resources or forced furlough of government employees.

To date, COVID-19 has

not had a financial impact on the Company.

However, COVID-19 has caused severe disruptions in transportation and limited access

to the Company’s facility, resulting in limited support from its staff and professional advisors.

The Company continues to

monitor the impacts of COVID-19 on the global economy and on its business operations.

However, at this time, it is difficult to

predict how long the potential operational impacts of COVID-19 will last or to what degree further disruption might impact the

Company’s operations and financial results.

Cash and Cash Equivalents

- The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents.

Balances held by the Company are typically in excess of Federal Deposit Insurance Corporation insured limits.

Following is a summary

of cash, cash equivalents and restricted cash at December 31, 2020 and December 31, 2019:

date, COVID-19 has not had a financial impact on the Company.

The Company continues to monitor the impacts of COVID-19 on the global

economy and on its business operations.

However, at this time, it is difficult to predict how long the potential operational impacts

of COVID-19 will last or to what degree further disruption might impact the Company’s operations and financial results.

and Cash Equivalents and Restricted Cash- The Company considers all highly liquid accounts with original maturities of three months or less to be

cash equivalents.

Balances held by the Company are typically in excess of Federal Deposit Insurance Corporation insured

is a summary of cash, cash equivalents and restricted cash at December 31, 2021 and December 31, 2020:

(in thousands)

Cash and cash equivalents

Restricted cash –

Restricted cash – current

Restricted cash – long-term

Cash, cash equivalents and restricted cash

Current restricted

cash relates to credit card accounts, while long-term restricted cash relates to a certificate of deposit held as collateral for

a letter of credit issued in connection with the Company’s lease for corporate office space.

Property and Equipment

- Machinery and equipment are recorded at cost and depreciated on a straight-line basis over estimated useful lives of three

to five years.

Current restricted cash of

$ 392 thousand at December 31, 2021 relates to a certificate of deposit held as collateral for a letter of credit issued in connection

with the Company’s lease for corporate office space.

This restricted cash was classified as long-term restricted cash at December

Current restricted cash of $ 48 thousand at December 31, 2020 related to a credit card account.

and Equipment - Machinery and equipment are recorded at cost and depreciated on a straight-line basis over estimated useful lives

of three to five years.

Furniture and fixtures are recorded at cost and depreciated on a straight-line basis over estimated useful lives

3 unchanged sentences

Repairs and maintenance expenditures are charged to operations.

Capitalized lease assets

are recorded at the lesser of the present value of minimum lease payments or fair value and amortized over the estimated useful

life of the related property or term of the lease.

Leases –

Capitalized lease assets are

recorded at the lesser of the present value of minimum lease payments or fair value and amortized over the estimated useful life of the

related property or term of the lease.

– The Company has operating and finance leases for corporate office space, office equipment and furniture located at the corporate

3 unchanged sentences

is recognized on a straight-line basis over the lease term.

Fair Value of Financial

Instruments - Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability,

in an orderly transaction between market participants.

A fair value hierarchy has been established for valuation inputs that gives

the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable

Income Taxes -

The Company accounts for income taxes in accordance with FASB ASC 740 Income Taxes, which requires the asset and liability method

to calculate deferred taxes.

Deferred taxes are recognized based on the differences between the financial reporting and income

tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected

The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that

the deferred tax asset will be fully realized.

FASB ASC 740 prescribes

guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions.

Tax positions must meet

a “more-likely-than-not”

recognition threshold to be recognized.

There were no tax positions for which it is considered

reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next

The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties in operating expenses

Revenue Recognition

- Revenue will be recognized when control of the promised goods or services is transferred to customers in an amount that reflects

the consideration expected to be entitled to in exchange for those goods or services .

Research and Development

Costs - Research and development costs are expensed as incurred.

These costs include the costs of manufacturing drug product,

the costs of clinical trials, costs of employees and associated overhead, and depreciation and amortization costs related to facilities

and equipment.

Research and development reimbursements are recorded by the Company as a reduction of research and development costs.

Share-Based Payments

- The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes option pricing

Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset, or paid to transfer

a liability, in an orderly transaction between market participants.

A fair value hierarchy has been established for valuation inputs

that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable

Recognition - The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue From

Contracts With Customers (“ASC 606”).

Under ASC 606, an entity recognizes revenue when its customer obtains control of

promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods

To determine revenue recognition for arrangements within the scope of ASC 606, the entity performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction

price, including variable consideration, if any;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue as the entity satisfies a performance obligation.

The Company only applies the five-step model to contracts

when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers

to the customer.

contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the promised goods

or services promised within each contract are distinct and, therefore, represent a separate performance obligation.

Goods and services

that are determined not to be distinct are combined with other promised goods and services until a distinct bundle is identified.

determining whether goods or services are distinct, the Company evaluates certain criteria, including whether (i) the customer can

benefit from the good or service either on its own or together with other resources that are readily available to the customer (capable

of being distinct) and (ii) the good or service is separately identifiable from other goods or services in the contract (distinct

in the context of the contract).

Company then determines the transaction price, which is the amount of consideration it expects to be entitled from a customer in exchange

for the promised goods or services for each performance obligation and recognizes the associated revenue as each performance obligation

is satisfied.

The Company’s estimate of the transaction price for each contract includes all variable consideration to which it

expects to be entitled.

Variable consideration includes payments in the form of collaboration milestone payments.

If an arrangement includes

collaboration milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates

the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue

reversal would not occur, the associated milestone value is included in the transaction price.

606 requires the Company to allocate the arrangement consideration on a relative standalone selling price basis for each performance

obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should

be allocated.

The relative standalone selling price is defined in the revenue standard as the price at which an entity would sell a promised

good or service separately to a customer.

The Company then recognizes as revenue the amount of the transaction price that is allocated

to the respective performance obligation as each performance obligation is satisfied, either at a point in time or over time, and if

over time, recognition is based on the use of an output or input method.

Collaborative Arrangements - The Company follows the accounting

guidance for collaboration agreements with third parties, which requires that certain transactions between the Company and collaborators

be recorded in its consolidated statements of operations on either a gross basis or net basis, depending on the characteristics of the

collaborative relationship, and requires enhanced disclosure of collaborative relationships.

The Company evaluates its collaboration agreements

for proper classification in its consolidated statements of operations based on the nature of the underlying activity.

When the Company

has concluded that it has a customer relationship with one of its collaborators, the Company follows the guidance of ASC 606 .

Revenue – The Company has a grant from a government-sponsored entity for research and development related activities

that provide for payments for reimbursed costs, which includes overhead and general and administrative costs as well as an administrative

The Company recognizes revenue from grants as it performs services under this arrangement.

Associated expenses are recognized when

incurred as research and development expense.

Revenue and related expenses are presented gross in the consolidated statements of operations.

and Development Costs - Research and development costs are expensed as incurred.

These costs include the costs of manufacturing drug

product, the costs of clinical trials, costs of employees and associated overhead, and depreciation and amortization costs related to

facilities and equipment.

Research and development reimbursements are recorded by the Company as a reduction of research and development

Payments - The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes option pricing

The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee

1 unchanged sentence

The Company accounts for forfeitures of stock options as they occur.

Loss Per Common

Share - Basic loss per common share is computed by dividing the net loss available to common stockholders by the weighted average

number of common shares outstanding during the reporting period.

For periods of net income, and when the effects are not anti-dilutive,

diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of

shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common shares underlying common

stock options and warrants using the treasury stock method.

For periods of net loss, diluted loss per share is calculated similarly

to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive.

For the years ended December

31, 2020 and 2019, the Company’s potentially dilutive shares, which include outstanding common stock options and warrants

have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive.

Taxes - The Company accounts for income taxes in accordance with FASB ASC 740 Income Taxes, which requires the asset and liability

method to calculate deferred taxes.

Deferred taxes are recognized based on the differences between the financial reporting and income

tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to

The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred

tax asset will be fully realized.

ASC 740 prescribes guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions.

Tax positions

must meet a “more-likely-than-not” recognition threshold to be recognized.

There were no tax positions for which it is considered

reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next year.

The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties in operating expenses

Loss Per Common Share - Basic loss per common share is computed by dividing the net loss available to common stockholders by the

weighted average number of common shares outstanding during the reporting period.

For periods of net loss, diluted loss per share is

calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive.

issued pre-funded warrants in April 2020 and June 2020 that were considered outstanding shares for the purposes of calculating net loss

per common share throughout 2020.

As of December 31, 2020, all of the pre-funded warrants had been exercised.

the years ended December 31, 2021 and 2020, the Company’s potentially dilutive shares, which include outstanding common stock options

and warrants have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive.

(in thousands)

Subsequent Events

- The Company’s management reviewed all material events through the date the consolidated financial statements were issued

for subsequent event disclosure consideration.

Accounting Standards

Recently Adopted -

In August 2018, FASB

issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820).

The updated guidance improves the disclosure

requirements on fair value measurements, primarily associated with Level 3 fair value measurements and is effective for fiscal

years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted upon issuance

of the standard for disclosures modified or removed with a delay of adoption of the additional disclosures until their effective

The Company adopted this standard effective January 1, 2020 and the standard did not have a significant impact to the Company’s

financial statements.

In November 2018, FASB

issued ASU 2018-18, C ollaborative Arrangements (Topic 808):

Clarifying the Interaction Between Topic 808 and Topic 606, which,

among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted

for under Topic 606.

The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years,

beginning after December 15, 2019, with early adoption permitted.

The Company adopted this standard effective January 1, 2020

and the standard did not have a significant impact to the Company’s financial statements.

Recent Accounting Standards –

In August 2018, FASB

issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820).

The updated guidance improves the disclosure

requirements on fair value measurements and is effective for fiscal years, and interim periods within those fiscal years, beginning

after December 15, 2019.

Early adoption is permitted upon issuance of the standard for disclosures modified or removed with a delay

of adoption of the additional disclosures until their effective date.

The Company is in the process of evaluating the impact the

standard will have on its financial statements.

In November 2018, FASB

issued ASU 2018-18, C ollaborative Arrangements (Topic 808):

Clarifying the Interaction Between Topic 808 and Topic 606,

which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be

accounted for under Topic 606.

The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2019, with early adoption permitted.

The Company is in the process of evaluating the impact

the standard will have on its financial statements.

Accounting Standards

Recently Issued-

In August 2020, FASB

issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts

in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ,

which, among other things, provides guidance on how to account for contracts on an entity’s own equity.

This ASU simplifies

the accounting for certain financial instruments with characteristics of liabilities and equity.

Specifically, the ASU eliminated

the need for the Company to assess whether a contract on the entity’s own equity (1) permits settlement in unregistered shares,

(2) whether counterparty rights rank higher shareholder’s rights, and (3) whether collateral is required.

In addition, the

ASU requires incremental disclosure related to contracts on the entity’s own equity and clarifies the treatment of certain

financial instruments accounted for under this ASU on earnings per share.

This ASU may be applied on a full retrospective of modified

retrospective basis.

This ASU is effective January 1, 2022 and interim periods presented.

Early adoption of the ASU is permitted

by the Company effective January 1, 2021.

The Company is in the process of assessing the adoption of the ASU on the Company’s

financial statements.

Note 2 - Prepaid Expenses and Other

Current Assets

Prepaid expenses and

other current assets consisted of the following at December 31, 2020 and 2019:

Events - The Company’s management reviewed all material events through the date the consolidated financial statements were

issued for subsequent event disclosure consideration.

Standards Recently Adopted - In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic

470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments

and Contracts in an Entity’s Own Equity , which, among other things, provides guidance on how to account for contracts on an

entity’s own equity.

This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and

Specifically, the ASU eliminated the need for the Company to assess whether a contract on the entity’s own equity (1) permits

settlement in unregistered shares, (2) whether counterparty rights rank higher than shareholder’s rights, and (3) whether collateral

In addition, the ASU requires incremental disclosure related to contracts on the entity’s own equity and clarifies

the treatment of certain financial instruments accounted for under this ASU on earnings per share.

This ASU may be applied on a full

retrospective of modified retrospective basis.

This ASU is effective January 1, 2022 and interim periods presented, although early adoption

of this ASU was permitted effective January 1, 2021.

The Company early adopted this standard effective January 1, 2021 and the standard

did not have a significant impact on the Company’s financial statements.

Standards Recently Issued– In May 2021, FASB issued ASU 2021-04, Earnings Per Share (topic 260), Debt — Modifications

and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts

in an Entity’s Own Equity (Subtopic 815-40) – Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding

Equity-Classified Written Call Options , which provides guidance of a modification or an exchange of a freestanding equity-classified

written call option that remains equity classified after modification or exchange as (1) an adjustment to equity and, if so, the related

earnings per share (EPS) effects, if any, or (2) an expense and, if so, the manner and pattern of recognition.

The amendments in this

ASU are effective January 1, 2022, including interim periods.

Early adoption is permitted.

The Company will apply the amendments prospectively

to modifications or exchanges occurring on or after January 1, 2022.

The Company will evaluate the impact of ASU 2017-09 on any future

changes to the terms and conditions of its warrants.

October 2021, FASB issued ASU 2021-08, Business Combinations (Topic 805), Account for Contract Assets and Contract Liabilities from

Contracts with Customers , which provides guidance on accounting for contract assets and contract liabilities acquired in a business

combination in accordance with ASC 606.

To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to

record for the acquired revenue contracts.

Generally, this should result in an acquirer recognizing and measuring the acquired contract

assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements.

amendments of ASU 2021-08 are effective January 1, 2023, including interim periods.

Early adoption is permitted, including adoption in

an interim period.

The Company will evaluate the impact of ASU 2021-08 on any future business combinations the Company may enter in the

November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance ,

which provides guidance on disclosure requirements to entities other than not-for-profit entities about transaction with a government

that are accounted for by applying a grant or contribution accounting model by analogy.

ASU 2021-10 requires an entity to make annual

disclosures related to (1) the nature of the transactions and the related accounting policy used to account for the government transactions,

(2) quantification and disclosure of amounts related to the government transactions included in balance sheet and income statement financial

statement line items, and (3) significant terms and conditions of the government transactions, including commitments and contingencies.

The amendments of ASU 2021-10 are effective January 1, 2022, including interim periods.

The adoption of ASU 2021-10 is not expected to

have a significant impact on the Company’s financial statements.

2 - Prepaid Expenses and Other Current Assets

expenses and other current assets consisted of the following at December 31, 2021 and 2020:

Prepaid insurance

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Total prepaid expenses and other current assets

Note 3 - Property and Equipment

3 - Property and Equipment

consisted of the following at December 31, 2020 and 2019:

and equipment consisted of the following at December 31, 2021 and 2020:

(in thousands)

Lab equipment

Office equipment & furniture

Office equipment and furniture

accumulated depreciation

Property and equipment, net

Depreciation expense

consisted of the following for the years ended December 31, 2020 and 2019, respectively:

expense consisted of the following for the years ended December 31, 2021 and 2020, respectively:

(in thousands)

Research & development

Research and development

General administrative

Total Depreciation expense

Note 4 - Leases

The Company adopted

ASC 842 as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions

at January 1, 2019, the effective date.

Company determines if an arrangement is a lease at inception.

This determination generally depends on whether the arrangement conveys

to the Company the right to control the use of a fixed asset for a period of time in exchange for consideration.

Control of an underlying

asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic

benefits from using the underlying asset.

The Company has lease agreements which include lease and non-lease components, which the Company

has elected to account for as a single lease component for all classes of underlying assets.

Lease expense for variable lease components

are recognized when the obligation is probable.

The Company made an accounting policy election to exclude from balance sheet reporting

those leases with initial terms of 12 months or less.

The Company determines

if an arrangement is a lease at inception.

This determination generally depends on whether the arrangement conveys to the Company

the right to control the use of a fixed asset for a period of time in exchange for consideration.

Control of an underlying asset

is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic

benefits from using the underlying asset.

The Company has lease agreements which include lease and non-lease components, which

the Company has elected to account for as a single lease component for all classes of underlying assets.

Lease expense for variable

lease components are recognized when the obligation is probable.

Right-of-use assets

and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

ASC 842 requires

a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily

assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily

determined, its incremental borrowing rate.

As an implicit interest rate was not readily determinable in the Company’s leases,

the incremental borrowing rate was used based on the information available at commencement date in determining the present value

of lease payments.

The lease term for

all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either

a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to

extend (or not to terminate) the lease controlled by the lessor.

As an implicit interest rate was not readily determinable in the Company’s leases,

the incremental borrowing rate was used based on the information available at commencement date in determining the present value of lease

lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered

by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option

to extend (or not to terminate) the lease controlled by the lessor.

Options for lease renewals have been excluded from the lease term

(and lease liability) for the majority of the Company’s leases as the reasonably certain threshold is not met.

At December 31, 2020,

the Company has an operating lease for corporate office space and two finance leases for office equipment and furniture located

in the corporate office space.

(and lease liability) for the majority of the Company’s leases as the reasonably certain threshold is not met.

December 31, 2021, the Company has an operating lease for corporate office space and two finance leases for office equipment and furniture

located in the corporate office space.

In addition, the Company has auxiliary corporate office space that it rents on a month-to-month

this rental is accounted for as an operating lease with the same term as the Company’s main office in the same building.

The components of lease expense are as follows:

this rental is accounted for as an operating lease with the same term as the Company’s main office in the same building.

components of lease expense are as follows:

(in thousands)

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Total finance lease cost

Supplemental cash flow information

related to leases are as follows:

cash flow information related to leases are as follows:

(in thousands)

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Finance Leases

Weighted average remaining lease terms are as follows at December

average remaining lease terms are as follows at December 31, 2021:

Weighted average remaining lease term:

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Finance Leases

As the Company’s

leases did not provide an implicit rate, the Company used its incremental borrowing rate based on the information available in

determining the present value of lease payments.

The Company’s incremental borrowing rate was based on the term of the lease,

the economic environment of the lease and reflect the rate the Company would have had to pay to borrow on a secured basis.

is information on the weighted average discount rates used at the time that the leases were evaluated:

As the interest rate implicit

in the leases was not readily determinable at the time that the leases were evaluated, the Company used its incremental borrowing rate

based on the information available in determining the present value of lease payments.

The Company’s incremental borrowing rate

was based on the term of the lease, the economic environment of the lease and reflect the rate the Company would have had to pay to borrow

on a secured basis.

Below is information on the weighted average discount rates used at the time that the leases were evaluated:

Weighted average discount rates:

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Finance Leases

Maturities of lease

liabilities are as follows:

of lease liabilities are as follows:

Year ending December 31,

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Present value of lease liabilities

Note 5 - Commitments and Contingencies

The Company has entered

into agreements with third parties for the rights to certain intellectual property, manufacturing and clinical trial services under

which the Company may incur obligations to make payments, including upfront payments, as well as milestone and royalty payments.

Notable inclusions in this category are:

Oak Ridge National Laboratory (“ORNL”) –

The Company is contracted to purchase radioactive material to be used for research and development, with a renewal option at the contract end.

During the years ended December 31, 2020 and 2019, the Company purchased material from ORNL of $0.2 million and $0.2 million, respectively.

In December 2020, the Company signed a contract with ORNL to purchase $0.3 million of radioactive material during calendar year 2021.

On June 15, 2012, the Company entered into a license and sponsored research agreement with Fred Hutchinson Cancer Research Center (“FHCRC”) to build upon previous and ongoing clinical trials with BC8 (licensed antibody).

FHCRC has completed both a Phase 1 and Phase 2 clinical trial with BC8.

The Company has been granted exclusive rights to the BC8 antibody and related master cell bank developed by FHCRC.

A milestone payment of $1 million will be due to FHCRC upon FDA approval of the first drug utilizing the licensed BC 8 antibody.

Note 5 - Other revenue

The Company has a grant from a government-sponsored entity for research and development related activities that provide for payments for

reimbursed costs, which includes overhead and general and administrative costs as well as an administrative fee.

The Company recognizes

revenue from grants as it performs services under this arrangement.

Associated expenses are recognized when incurred as research and development

Revenue of $ 0.2 million was recognized during year ended December 31, 2021.

The Company determined that certain collaborations with a third-party

are within the scope of ASC 606.

The collaboration agreement is made up of multiple modules related to various research activities.

Company identified a single performance obligation to provide research services within each module for which the Company receives monetary

consideration.

The third-party can choose to proceed with each module or can terminate the agreement at any time.

The Company recognizes

revenue for each module on a straight-line basis over the expected module period.

Revenue for succeeding modules is not recognized until

all contingencies are resolved, inclusive of the third-party’s ability to terminate the module.

The consideration is recognized

to revenue over each module and revenue recognized during the year ended December 31, 2021 was $ 0.9 million.

Other liability consists

of $ 1.0 million of deferred other revenue that is expected to be recognized during 2022.

6 - Commitments and Contingencies

June 15, 2012, the Company entered into a license and sponsored research agreement with Fred Hutchinson Cancer Research Center (“FHCRC”)

to build upon previous and ongoing clinical trials with apamistamab (licensed antibody).

FHCRC has completed both a Phase 1 and Phase

2 clinical trial with apamistamab.

The Company has been granted exclusive rights to the antibody and related master cell bank developed

A milestone payment of $ 1 million will be due to FHCRC upon FDA approval of the first drug utilizing the licensed antibody.

Upon commercial sale of the drug, royalty payments of 2% of net sales will be due to FHCRC.

Collaborative Agreement

In March 2018, the Company entered into

a research and option agreement with Astellas Pharma Inc.

(“Astellas”) to develop ARCs using the Company’s AWE

Technology Platform.

Under this collaboration, the Company will utilize its AWE Platform to conjugate and label selected Astellas

targeting agents with an Actinium-225 payload.

The Company is also responsible for conducting preclinical validation studies on

any ARCs generated.

Payments from Astellas under this agreement are accounted for as a reduction to research and development expense

Note 6 - Equity

On April 24, 2020,

the Company issued and sold 4.3 million shares of common stock and 2.8 million pre-funded warrants to purchase shares of common

April 24, 2020, the Company issued and sold 4.3 million shares of common stock and 2.8 million pre-funded warrants to purchase shares

of common stock.

The price to the public in this offering for each share of common stock was $ 4.50 and for each pre-funded warrant was

1 unchanged sentence

Gross proceeds

from this offering were $31.6 million, before deducting underwriting discounts and commissions and other offering expenses payable

by the Company.

from this offering were $ 31.6 million, before deducting underwriting discounts and commissions and other offering expenses payable by

Net proceeds from this offering were $ 29.1 million.

During the year ended

December 31, 2020, holders of all of the 2.8 million pre-funded April 2020 warrants exercised their warrants at $0.003 per share

and received 2.8 million shares of common stock.

On June 19, 2020, the

Company issued and sold 1.9 million shares of common stock and 0.7 million pre-funded warrants to purchase shares of common stock.

the year ended December 31, 2020, holders of all of the 2.8 million pre-funded April 2020 warrants exercised their warrants at $ 0.003

per share and received 2.8 million shares of common stock.

June 19, 2020, the Company issued and sold 1.9 million shares of common stock and 0.7 million pre-funded warrants to purchase shares

of common stock.

The price to the public in this offering for each share of common stock was $ 9.75 and for each pre-funded warrant was

pre-funded warrant had an exercise price of $0.003 per share and was exercisable immediately upon issuance.

Gross proceeds from

this offering were $25.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by

Each pre-funded warrant had an exercise price of $ 0.003 per share and was exercisable immediately upon issuance.

Gross proceeds

from this offering were $ 25.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by

Net proceeds from this offering were $ 23.0 million.

During the year ended

December 31, 2020, holders of all of the 0.7 million pre-funded June 2020 warrants exercised their warrants at $0.003 per share

and received 0.7 million shares of common stock.

In August 2020, the

Company entered into the Capital on Demand™

Sales Agreement with JonesTrading Institutional Services LLC (“JonesTrading”),

pursuant to which the Company may sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of its

common stock.

Shares of common stock are offered pursuant to the Company’s shelf registration statement on Form S-3 filed

with the SEC on August 7, 2020.

As of December 31, 2020, the Company has sold 2.1 million shares of common stock, resulting in

gross proceeds of $22.6 million and net proceeds of $21.7 million.

In December 2018, the

Company entered into the Amended and Restated At Market Issuance Sales Agreement with B.

Riley FBR, Inc.

and JonesTrading, pursuant

to which the Company conducted its at-the market program.

During the year ended December 31, 2020, the Company sold 0.3 million

shares of common stock through its at-the-market program, resulting in net proceeds of $2.5 million.

In October 2018, the

Company and Lincoln Park Capital Fund, LLC (“Lincoln Park”) entered into a purchase agreement and a registration rights

agreement, pursuant to which the Company has the right to sell to Lincoln Park shares of the Company’s common stock having

an aggregate value of up to $32.5 million, subject to certain limitations and conditions set forth in the agreement.

year ended December 31, 2020, the Company elected to sell to Lincoln Park 27 thousand shares and received $0.2 million.

In April 2019,

the Company sold 1.4 million shares of common stock at an offering price of $11.55 per share and warrants to purchase 1.4 million

shares of common stock at an exercise price of $15.00 per share and with a term of 5 years, resulting in gross proceeds of $16.5

million and net proceeds of $15.1 million after deducting underwriting and other offering expenses.

ended December 31, 2019, the Company sold 93 thousand shares of common stock through its at-the-market program with Jones Trading,

resulting in net proceeds of $0.7 million.

The Company elected to sell to Lincoln Park 13 thousand shares and received $0.1 million.

In March 2018, the

Company sold an aggregate of 1.0 million units consisting of an aggregate of 1.0 million shares of common stock, 0.3 million series

A warrants and 0.8 million series B warrants, with each series A warrant exercisable for one share of common stock at an exercise

price of $18.00 per share and each series B warrant exercisable for one share of common stock at an exercise price of $21.00 per

During the year ended December 31, 2019, holders of March 2018 series A warrants exercised 84 thousand shares, resulting

in the Company receiving $1.5 million.

The remaining March 2018 series A warrants expired in March 2019.

The March 2018 Series

B warrants expired in September 2020.

the year ended December 31, 2020, holders of all of the 0.7 million pre-funded June 2020 warrants exercised their warrants at $ 0.003

per share and received 0.7 million shares of common stock.

August 2020, the Company entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC (“JonesTrading”),

pursuant to which the Company may sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of its common

Shares of common stock are offered pursuant to the Company’s shelf registration statement on Form S-3 filed with the SEC

on August 7, 2020.

As of December 31, 2020, the Company had sold 2.1 million shares of common stock, resulting in gross proceeds of $ 22.6

million and net proceeds of $ 21.7 million.

For the year ended December 31, 2021, the Company sold 4.6 million shares of common stock,

resulting in gross proceeds of $ 36.5 million and net proceeds of $ 35.3 million.

Amended and Restated Stock Plan

In December 2019, the

Company’s 2019 Stock Plan was established.

The expiration date of the plan is October 18, 2029 and the total number of shares

of the Company’s common stock available for grant to employees, directors and consultants of the Company was 333,333 shares.

At the Company’s Annual Meeting of Stockholders held on November 18, 2020, its stockholders authorized an increase in the

December 2019, the Company’s 2019 Stock Plan was established.

The expiration date of the plan is October 18, 2029 and the total

number of shares of the Company’s common stock available for grant to employees, directors and consultants of the Company was 333,333

At the Company’s Annual Meeting of Stockholders held on November 18, 2020, its stockholders authorized an increase in the

number of shares authorized under the plan, resulting in the number of shares authorized in the plan to be 3,083,333 shares.

At the Company’s

Annual Meeting of Stockholders held on November 9, 2021, its stockholders authorized an increase in the number of shares authorized under

the plan, resulting in the number of shares authorized in the plan to be 5,833,333 shares.

Amended and Restated Stock Plan

In September 2013,

the Company’s 2013 Stock Plan was established.

The expiration date of the plan is September 9, 2023 and at the time of approval,

the total number of shares of the Company’s common stock available for grant to employees, directors and consultants of the

Company under the plan was 91,666 shares.

September 2013, the Company’s 2013 Stock Plan was established.

The expiration date of the plan is September 9, 2023 and at the

time of approval, the total number of shares of the Company’s common stock available for grant to employees, directors and consultants

of the Company under the plan was 91,666 shares.

After a number of amendments approved by stockholders, the number of shares authorized

1 unchanged sentence

Equity Incentive Plan

In September 2013,

the Company’s 2013 Equity Incentive Plan was established.

The expiration date of the plan is September 9, 2023 and the total

number of shares of the Company’s common stock available for grant to employees, directors and consultants of the Company

under the plan was 15,000 shares.

September 2013, the Company’s 2013 Equity Incentive Plan was established.

The expiration date of the plan is September 9, 2023

and the total number of shares of the Company’s common stock available for grant to employees, directors and consultants of the

Company under the plan was 15,000 shares.

In December 2013, the shareholders of the Company approved the plan and increased the number

of shares authorized under the plan to 33,333 shares.

Stock Options

Following is a summary

of stock option activity for the years ended December 31, 2020 and 2019:

is a summary of stock option activity for the years ended December 31, 2021 and 2020:

(in thousands, except for per-share amount)

Value at December 31, 2021

Outstanding, January 1, 2020

2 unchanged sentences

Exercisable, December 31, 2021

During 2020, the Company

granted its employees and members of the Board of Directors options to purchase 458 thousand shares of common stock with an exercise

price ranging from $6.63 to $12.41 per share, a term of 10 years, and a vesting period from 4 to 4.2 years.

The options have

an aggregated fair value of $3.2 million that was calculated using the Black-Scholes option-pricing model.

Variables used in the

Black-Scholes option-pricing model include:

2021, the Company granted its employees and members of the Board of Directors options to purchase 881 thousand shares of common stock

with an exercise price ranging from $ 6.02 to $ 9.25 per share, a term of 10 years, and a vesting period from 4 to 4.2 years.

options have an aggregated fair value of $ 3.9 million that was calculated using the Black-Scholes option-pricing model.

Variables used

in the Black-Scholes option-pricing model include:

(1) discount rate range from 0.65% to 1.28% (2) expected life of 6 years, (3) expected

volatility range from 79.8% to 85.1%, and (4) zero expected dividends.

During 2019, the Company

granted its employees and members of the Board of Directors options to purchase 195 thousand shares of common stock with an exercise

price ranging from $6.44 to $17.40 per share, a term of 10 years, and a vesting period from 4 to 4.2 years.

The options have

an aggregated fair value of $1.1 million that was calculated using the Black-Scholes option-pricing model.

Variables used in the

Black-Scholes option-pricing model include:

2020, the Company granted its employees and members of the Board of Directors options to purchase 458 thousand shares of common stock

with an exercise price ranging from $ 6.63 to $ 12.41 per share, a term of 10 years, and a vesting period from 4 to 4.2 years.

options have an aggregated fair value of $ 3.2 million that was calculated using the Black-Scholes option-pricing model.

Variables used

in the Black-Scholes option-pricing model include:

(1) discount rate range from 0.34% to 0.56% (2) expected life of 6 years, (3) expected

volatility range from 83.6% to 85.5%, and (4) zero expected dividends.

During the years ended

December 31, 2020 and 2019, options to purchase 23 thousand and 56 thousand common shares were cancelled, respectively, upon the

termination of employment.

There were no exercises of options during 2020 and 2019.

The fair values of

all options issued and outstanding are being amortized over their respective vesting periods.

The unrecognized compensation expense

at December 31, 2020 was $4.0 million related to unvested options, which is expected to be expensed over a weighted average of

the years ended December 31, 2021 and 2020, options to purchase 333 thousand and 23 thousand common shares were cancelled, respectively,

upon the termination of employment.

During 2021, 1 thousand options were exercised for shares of common stock.

There were no exercises

of options during 2020.

fair values of all options issued and outstanding are being amortized over their respective vesting periods.

The unrecognized compensation

expense at December 31, 2021 was $ 4.9 million related to unvested options, which is expected to be expensed over a weighted average of

During 2021 and 2020, the Company recorded total option expense of $ 1.5 million and $ 1.2 million, respectively.

Pre-funded Warrants

As part of the financings

in April 2020 and June 2020, the Company issued pre-funded warrants.

Each pre-funded warrant had an exercise price of $0.003 per

share and was exercisable immediately upon issuance.

part of the April 2020 offering and the June 2020 offering, the Company issued pre-funded warrants.

Each pre-funded warrant had an exercise

price of $ 0.003 per share and was exercisable immediately upon issuance.

The pre-funded warrants did not have an expiration date.

During 2020 all the

pre-funded warrants were exercised for shares of common stock.

Following is a summary

of pre-funded warrant activity for the year ended December 31, 2020:

(in thousands, except for per-share amounts)

Number of Shares

Outstanding, December 31, 2019

Outstanding, December 31, 2020

Following is a summary

of warrant activities for the years ended December 31, 2020 and 2019:

2020 all the pre-funded warrants were exercised for shares of common stock.

is a summary of warrant activities for the years ended December 31, 2021 and 2020:

(in thousands, except for per-share amounts)

3 unchanged sentences

Exercisable, December 31, 2021

In April 2019, the

Company sold 1.4 million shares of common stock at an offering price of $11.55 per share and warrants to purchase 1.4 million shares

of common stock at an exercise price of $15.00 per share and with a term of 5 years.

The transaction date relative fair value of

the April 2019 warrants of $5.3 million was determined utilizing the Black-Scholes option pricing model and variables of (1) a

discount rate of 2.35%, (2) expected term of 5 years, (3) expected volatility of 78% and (4) zero expected dividends.

In March 2018, the

Company sold an aggregate of 1.0 million units consisting of an aggregate of 1.0 million shares of common stock, 0.3 million series

A warrants and 0.8 million series B warrants, with each series A warrant exercisable for one share of common stock at an exercise

price of $18.00 per share and each series B warrant exercisable for one share of common stock at an exercise price of $21.00 per

During the year ended December 31, 2019, holders of March 2018 series A warrants exercised 84 thousand shares, resulting

in the Company receiving $1.5 million.

The remaining March 2018 series A warrants expired in March 2019.

The March 2018 Series

B warrants expired in September 2020.

The Company has an

outstanding warrant to purchase 1,907 shares of common stock, issued on March 14, 2017 to Sandesh Seth, the Company’s Chairman

and Chief Executive Officer.

Company has an outstanding warrant to purchase 1,907 shares of common stock, issued on March 14, 2017 to Sandesh Seth, the Company’s

Chairman and Chief Executive Officer.

The warrant included down-round protection up until it was amended on August 11, 2020.

1 unchanged sentence

is triggered.

As a result of the April 2019 offering, the exercise price of the warrant was reset from $37.50 per share to $26.40

As a result of the April 2020 offering and June 2020 offering, the exercise price of the warrant was reset from $ 26.40

per share to $ 15.62 per share.

The down-round protection provision in the above warrants created a deemed dividend to common

stockholders of $1 thousand in the years ended December 31, 2020 and 2019, which are reflected in the accompanying consolidated

statement of operations and consolidated statement of changes in stockholders’

On August 11, 2020, the Company and

Seth agreed to amend the warrant to remove the anti-dilution provision that had been in the warrant.

Accordingly, pursuant

to the amendment, as of August 11, 2020, the exercise price of the warrant will no longer be subject to a proportional adjustment

if and when the Company issues any shares of its common stock for a consideration less than the exercise price of the warrant.

The down-round protection provision in the above warrants created a deemed dividend to common stockholders

of $ 1 thousand in the year ended December 31, 2020 which is reflected in the accompanying consolidated statement of operations and consolidated

statement of changes in stockholders’ equity.

On August 11, 2020, the Company and Mr.

Seth agreed to amend the warrant to remove

the anti-dilution provision that had been in the warrant.

Accordingly, pursuant to the amendment, as of August 11, 2020, the exercise

price of the warrant will no longer be subject to a proportional adjustment if and when the Company issues any shares of its common stock

for a consideration less than the exercise price of the warrant.

All other terms of the warrant remained the same.

During the years ended

December 31, 2020 and 2019, the Company recorded stock-based compensation expense related to warrants of $13 thousand and $8 thousand,

respectively.

Note 7 - Income Taxes

Deferred income taxes

reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting

purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities

at December 31, 2020 and 2019 are as follows:

the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation expense related to warrants of $ 16 thousand

and $ 13 thousand, respectively.

8 - Income Taxes

income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and

liabilities at December 31, 2021 and 2020 are as follows:

(in thousands)

5 unchanged sentences

Deferred tax assets, net

The Company has recorded

a valuation allowance of $56.2 million and $49.9 million against its deferred tax assets at December 31, 2020 and 2019, respectively,

because management determined that it is not more-likely-than not that those assets will be realized.

For federal income

tax purposes, the Company has $152.0 million of unused net operating losses (“NOLs”) at December 31, 2020 available

for carry forward to future years.

NOLs generated prior to 2018 will begin to expire if unused in 2021.

The NOLs generated in 2018

and later years have an indefinite life, but will be limited to 80% of their value if used in a tax year ending after January 1,

For state income tax

purposes, the Company has $81.7 million of unused NOLs at December 31, 2020 available for carry forward to future years.

NOLs will begin to expire in 2034 if unused.

The Company has federal

research and development tax credits of $2.2 million at December 31, 2020 which will begin to expire in 2034 if unused and orphan

drug credits of $10.4 million which will begin to expire in 2028 if unused.

Federal and state tax

laws impose limitations on the utilization of net operating losses and credit carryforwards in the event of an ownership change

for tax purposes, as defined in Section 382 of the Internal Revenue Code.

Accordingly, the Company’s ability to utilize these

carryforwards may be limited as a result of an ownership change which may have already happened or may happen in the future.

an ownership change could result in a limitation in the use of the net operating losses in future years and possibly a reduction

of the net operating losses available.

The Company has recorded a

valuation allowance of $ 62.6 million and $ 56.2 million against its deferred tax assets at December 31, 2021 and 2020 respectively, because

management determined that it is not more-likely-than not that those assets will be realized.

For federal income tax purposes, the Company has $ 163.0 million

of unused net operating losses (“NOLs”) at December 31, 2021 available for carry forward to future years.

NOLs of $120.8 million

generated prior to 2018 will begin to expire if unused in 2022.

NOLs generated in 2018 and later years of $42.2 million have an indefinite

life, but will be limited to 80% of their value if used in a tax year ending after January 1, 2022.

For state income tax purposes,

the Company has $ 87.9 million of unused NOLs at December 31, 2021 available for carry forward to future years.

These NOLs will begin to

expire in 2034 if unused.

Company has federal research and development tax credits of $ 2.9 million at December 31, 2021 which will begin to expire in 2034 if unused

and orphan drug credits of $ 11.6 million which will begin to expire in 2028 if unused.

and state tax laws impose limitations on the utilization of net operating losses and credit carryforwards in the event of an ownership

change for tax purposes, as defined in Section 382 of the Internal Revenue Code.

Accordingly, the Company’s ability to utilize

these carryforwards may be limited as a result of an ownership change which may have already happened or may happen in the future.

an ownership change could result in a limitation in the use of the net operating losses in future years and possibly a reduction of the

net operating losses available.

difference between the income tax provision and the amount that would result if the U.S.

Federal statutory rates were applied to

pre-tax losses for the year ended December 31, 2020 and 2019 are as follows:

Federal statutory rates were applied to pre-tax

losses for the year ended December 31, 2021 and 2020 are as follows:

(in thousands)

5 unchanged sentences

Provision for income tax

Note 9 - Subsequent Events

Since December 31, 2020,

the Company has sold 1.7 million shares of common stock under its Capital on Demand™

Sales Agreement with JonesTrading, resulting

in net proceeds of $14.4 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE.

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-K

Item 8. Financial Statements and Supplementary Data