Actinium Pharmaceuticals, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS The accompanying consolidated financial statements have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at September 30, 2022 and December 31, 2021, and the results of operations and cash flows for the three and nine months ended September 30, 2022 and 2021, respectively, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements for the year ended December 31, 2021 in the Company’s Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full year. 1 Actinium Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets (amounts in thousands, except share and per share data) September 30, 2022 December 31, 2021 (Unaudited) (Audited) Assets Current Assets: Cash and cash equivalents $ 111,815 $ 77,829 Restricted cash - current 394 392 Security deposit - 50 Prepaid expenses and other current assets 1,214 1,478 Total Current Assets 113,423 79,749 Property and equipment, net of accumulated depreciation of $ 440 and $ 335 635 340 Restricted cash – long term 300 - Operating leases right-of-use assets 2,454 241 Finance leases right-of-use assets 4 58 Total Assets $ 116,816 $ 80,388 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable and accrued expenses $ 7,869 $ 5,535 Other revenue deferred– current liability 91 998 Operating leases current liability 386 245 Finance leases current liability 4 62 Total Current Liabilities 8,350 6,840 Long-term license revenue deferred 35,000 - Long-term operating leases obligations 2,210 - Long-term finance leases obligations 1 3 Total Liabilities $ 45,561 $ 6,843 Commitments and contingencies Stockholders’ Equity: Preferred stock, $ 0.001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding - - Common stock, $ 0.001 par value; 1,000,000,000 shares authorized; 25,212,072 and 22,143,974 shares issued and outstanding, respectively 25 22 Additional paid-in capital 349,348 329,271 Accumulated deficit ( 278,118 ) ( 255,748 ) Total Stockholders’ Equity 71,255 73,545 Total Liabilities and Stockholders’ Equity $ 116,816 $ 80,388 See accompanying notes to the condensed consolidated financial statements. 2 Actinium Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations (Unaudited) (amounts in thousands, except share and per share data) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Revenue Revenue $ - $ - $ - $ - Other revenue 45 233 1,030 1,121 Total revenue 45 233 1,030 1,121 Operating expenses: Research and development, net of reimbursements 6,771 4,708 15,802 12,615 General and administrative 3,073 1,994 8,041 5,422 Total operating expenses 9,844 6,702 23,843 18,037 Loss from operations ( 9,799 ) ( 6,469 ) ( 22,813 ) ( 16,916 ) Other income: Interest income - net 325 46 443 152 Total other income 325 46 443 152 Net loss $ ( 9,474 ) $ ( 6,423 ) $ ( 22,370 ) $ ( 16,764 ) Net loss per common share – basic and diluted $ ( 0.38 ) $ ( 0.30 ) $ ( 0.94 ) $ ( 0.84 ) Weighted average common shares outstanding – basic and diluted 25,164,599 21,539,455 23,691,218 20,060,315 See accompanying notes to the condensed consolidated financial statements. 3 Actinium Pharmaceuticals, Inc. Condensed Consolidated Statement of Changes in Stockholders’ Equity For the Three and Nine Months Ended September 30, 2022 (Unaudited) (amounts in thousands, except share amounts) Common Stock Additional Paid-In Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance, January 1, 2022 22,143,974 $ 22 $ 329,271 $ ( 255,748 ) $ 73,545 Stock-based compensation - - 421 - 421 Net loss - - - ( 5,129 ) ( 5,129 ) Balance, March 31, 2022 22,143,974 $ 22 $ 329,692 $ ( 260,877 ) $ 68,837 Stock-based compensation - - 425 - 425 Sale of common stock, net of issuance costs 2,726,649 3 16,683 - 16,686 Net loss - - - ( 7,767 ) ( 7,767 ) Balance, June 30, 2022 24,870,623 $ 25 $ 346,800 $ ( 268,644 ) $ 78,181 Stock-based compensation 19,639 - 970 - 970 Sale of common stock, net of issuance costs 321,810 - 1,578 - 1,578 Net loss - - - ( 9,474 ) ( 9,474 ) Balance, September 30, 2022 25,212,072 $ 25 $ 349,348 $ ( 278,118 ) $ 71,255 See accompanying notes to the condensed consolidated financial statements. 4 Actinium Pharmaceuticals, Inc. Condensed Consolidated Statement of Changes in Stockholders’ Equity For the Three and Nine Months Ended September 30, 2021 (Unaudited) (amounts in thousands, except share amounts) Common Stock Additional Paid-In Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance, January 1, 2021 17,532,893 $ 18 $ 292,275 $ ( 230,974 ) $ 61,319 Stock-based compensation - - 376 - 376 Sale of common stock, net of costs 1,712,745 1 14,360 - 14,361 Net loss - - - ( 5,320 ) ( 5,320 ) Balance, March 31, 2021 19,245,638 $ 19 $ 307,011 $ ( 236,294 ) $ 70,736 Stock-based compensation 8,705 - 459 - 459 Sale of common stock, net of issuance costs 1,835,688 2 14,317 - 14,319 Exercise of stock options 900 - 6 - 6 Net loss - - - ( 5,021 ) ( 5,021 ) Balance, June 30, 2021 21,090,931 $ 21 $ 321,793 $ ( 241,315 ) $ 80,499 Stock-based compensation 12,601 - 412 - 412 Sale of common stock, net of issuance costs 927,306 1 5,796 - 5,797 Net loss - - - ( 6,423 ) ( 6,423 ) Balance, September 30, 2021 22,030,838 $ 22 $ 328,001 $ ( 247,738 ) $ 80,285 See accompanying notes to the condensed consolidated financial statements. 5 Actinium Pharmaceuticals, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (amounts in thousands) For the Nine Months Ended September 30, 2022 2021 Cash Flows From Operating Activities: Net loss $ ( 22,370 ) $ ( 16,764 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 1,816 1,246 Depreciation and amortization expense 538 387 Changes in operating assets and liabilities: Prepaid expenses and other current assets 264 137 Accounts payable and accrued expenses 2,334 ( 566 ) Other revenue deferred– current liability ( 907 ) - Long-term license revenue deferred 35,000 - Operating lease liabilities ( 253 ) ( 254 ) Net Cash Provided By/Used In Operating Activities 16,422 ( 15,814 ) Cash Flows Used In Investing Activities: Purchase of property and equipment ( 350 ) ( 133 ) Net Cash Used In Investing Activities ( 350 ) ( 133 ) Cash Flows From Financing Activities: Payments on finance leases ( 48 ) ( 63 ) Sales of shares of common stock, net of costs 18,264 34,477 Proceeds from exercise of stock options - 6 Net Cash Provided By Financing Activities 18,216 34,420 Net change in cash, cash equivalents, and restricted cash 34,288 18,473 Cash, cash equivalents, and restricted cash at beginning of period 78,221 63,999 Cash, cash equivalents, and restricted cash at end of period $ 112,509 $ 82,472 Supplemental disclosure of cash flow information: Cash paid for interest $ - $ - Cash paid for income taxes $ - $ - Supplemental disclosure of non-cash investing and financing activity: Acquisition of equipment financed by security deposit $ 50 $ - See accompanying notes to the condensed consolidated financial statements. 6 Actinium Pharmaceuticals, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1 - Description of Business and Summary of Significant Accounting Policies Nature of Business - Actinium Pharmaceuticals, Inc. (the “Company” or “Actinium”) 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 195 patents, 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. Its lead drug candidate, Iomab-B, has met the primary endpoint of the pivotal Phase 3 SIERRA Trial with a high degree of statistical significance (p<0.0001) and the Company will report additional data from the SIERRA trial by the end of 2022. Its second most advanced drug candidate, Actimab-A, is being studied in a Phase 1 combination trial with the chemotherapy regimen CLAG-M and has reported median overall survival of 12 months, 53 % 1-year overall survival and 32 % 2-year overall survival in patients with relapsed or refractory AML who have adverse cytogenetics such as a TP53 mutation or have failed targeted therapies. Data from this trial will be presented in an oral presentation at the American Society of Hematology Annual Meeting & Symposium in December 2022. Basis of Presentation - The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for condensed financial information, and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the condensed periods presented. Condensed results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Principles of Consolidation - The basis of consolidation is unchanged from the disclosure in the Company’s Notes to the Consolidated Financial Statements section in its Report on Form 10-K for the year ended December 31, 2021. The unaudited condensed consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned subsidiaries. Use of Estimates - The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP 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. Impact 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 variants of COVID-19, including subvariants BA.4 and BA.5, which appear to be the most transmissible variants to date, have spread globally. The full impact of the Omicron variants, 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 and boosters against the Omicron variants and subsequent variants and the response by governmental bodies and regulators. Many countries around the world have continued to impose quarantines and restrictions on travel and mass gatherings to slow the spread of the virus. 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 hybrid working for its office-based staff, while its research staff has been actively working in its laboratory throughout the pandemic and thus far, has not experienced a significant disruption or delay in its operations as it relates to the clinical development, preclinical research or manufacturing of its drug candidates. Although the Company is adhering to health and safety protocols, an outbreak of COVID-19 at the Company’s facilities could nonetheless cause shutdowns of facilities and a reduction in its workforce, which could cause a disruption or delay in such operations. 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. 7 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 direct 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 . Cash, 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 limits. The following is a summary of cash, cash equivalents and restricted cash at September 30, 2022 and December 31, 2021: (amounts in thousands) September 30, 2022 December 31, 2021 Cash and cash equivalents $ 111,815 $ 77,829 Restricted cash - current 394 392 Restricted cash – long-term 300 - Cash, cash equivalents and restricted cash $ 112,509 $ 78,221 Restricted cash relates to certificates of deposit held as collateral for letters of credit issued in connection with the Company’s leases of corporate office spaces. Leases – The Company has operating and finance leases for corporate office space, office equipment and furniture located at the corporate office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term. The Company entered into a lease for corporate office space effective June 1, 2022 and paid a security deposit to the landlord. A certificate of deposit was provided as collateral for a letter of credit issued with this office space during 2022 and at that time, the security deposit was returned to the Company. Revenue 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 or services. 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. At 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. In 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). 8 The 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. ASC 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 and comprehensive loss 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 and comprehensive loss 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 . Grant Revenue – The Company has a grant from a government-sponsored entity for research and development related activities that provides 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 and all conditions are met 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. License Revenue – The Company entered into a product licensing agreement whereby the Company allowed a third party to commercialize a certain product in specified territories using the Company’s trademarks. The terms of this arrangement includes payment to the Company for a combination of one or more of the following: upfront license fees; development, regulatory and sales-based milestone payments; and royalties on net sales of licensed products. The Company uses its judgment to determine whether milestones or other variable consideration should be included in the transaction price. Upfront license fees : If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from upfront license fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company determines whether the combined performance obligation is satisfied over time or at a point in time. Development, regulatory or commercial milestone payments : At the inception of each arrangement that includes payments based on the achievement of certain development, regulatory and sales-based or commercial events, the Company evaluates whether the milestones are considered probable of being achieved 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. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until regulatory approval is received. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjust the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis and recorded as part of license revenue during the period of adjustment. 9 Sales-based milestone payments and royalties : For arrangements that include sales-based royalties, including milestone payments based on the volume of sales, the Company will determine whether the license is deemed to be the predominant item to which the royalties or sales-based milestones relate and if such is the case, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Upfront payments and fees may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements or when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with any variable consideration is subsequently resolved. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. 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 model. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for forfeitures of stock options as they occur. Net 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 shares of common stock 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. For the three and nine months ended September 30, 2022 and 2021, the Company’s potentially dilutive shares, which include outstanding common stock options, restricted stock units and warrants, have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive. (amounts in thousands) September 30, 2022 September 30, 2021 Options 3,192 1,426 Restricted Stock Units 300 - Warrants 1,443 2,114 Total 4,935 3,540 Recently Adopted Accounting Pronouncements – 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. The Company adopted this standard effective January 1, 2022 and the standard did not have a material effect on the Company’s financial statements. 10 In 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 Company adopted this standard effective January 1, 2022, and the standard did not have a material impact on the Company’s financial statements. Recently Issued Accounting Pronouncements – In 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. The 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 future. Note 2 - Commitments and Contingencies 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 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 by FHCRC. A milestone payment of $ 1 million will be due to FHCRC upon U.S. Food and Drug Administration (“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. Note 3 - Leases The Company entered into a lease for corporate office space, effective June 1, 2022. The lease has a term of 5 years 2 months , with an expiration date of July 30, 2027 , and a current annual rate of $ 0.6 million. The Company is also responsible for certain other costs, such as insurance, utilities and maintenance. As of September 30, 2022, the Company has two operating leases for corporate office space and two finance leases for office equipment and furniture located in one of the corporate office spaces. In addition, the Company has auxiliary corporate office space that it rents on a month-to-month basis; this rental is accounted for as an operating lease with the same term as the Company’s main office. The components of lease expense are as follows: Three months ended Nine Months ended (amounts in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Operating lease expense $ 206 $ 93 $ 440 $ 279 Finance lease cost Amortization of right-to-use assets $ 14 $ 20 $ 54 $ 61 Interest on lease liabilities $ - $ 2 $ 2 $ 7 Total finance lease cost $ 14 $ 22 $ 56 $ 68 11 Supplemental cash flow information related to leases are as follows: Cash flow information: Nine Months ended (amounts in thousands) September 30, 2022 September 30, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow use from operating leases $ 302 $ 282 Operating cash flow use from finance leases $ 2 $ 7 Financing cash flow use from finance leases $ 48 $ 63 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,605 $ - Finance Leases $ - $ - Weighted average remaining lease terms are as follows at September 30, 2022: Weighted average remaining lease term: Operating leases 4.8 years Finance Leases 1.3 year 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: Operating leases 4.8 % Finance Leases 8.0 % Maturities of lease liabilities are as follows: (amounts in thousands) Year ending December 31, Operating Leases Finance Leases 2022 (excluding nine months ended September 30, 2022) $ 50 $ 1 2023 606 4 2024 618 - 2025 630 - 2026 643 - 2027 380 - Total lease payments $ 2,927 $ 5 Less imputed interest ( 331 ) - Present value of lease liabilities $ 2,596 $ 5 Note 4 – Other revenue 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. The 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. Other revenue recognized during the three months and nine months ended September 30, 2022 was $ 0.0 million and $ 0.9 million, respectively, and for the three months and nine months ended September 30, 2021 was $ 0.0 million and $ 0.9 million, respectively. 12 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 expense. Other revenue recognized during the three months and nine months ended September 30, 2022 was $ 0.0 million and $ 0.1 million, respectively. Other revenue recognized during the three and nine months ended September 30, 2021 was $ 0.2 million. On April 7, 2022, the Company entered into a license and supply agreement (the “License Agreement”) with Immedica Pharma AB (“Immedica”), pursuant to which Immedica licensed the exclusive product rights for commercialization of Iomab-B (I-131 apamistamab) in the European Economic Area, Middle East and North Africa (EUMENA) including Algeria, Andorra, Bahrain, Cyprus, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Monaco, Morocco, Oman, Palestine, Qatar, San Marino, Saudi Arabia, Switzerland, Syria, Tunisia, Turkey, the United Arab Emirates, the United Kingdom, the Vatican City and Yemen. Upon signing, the Company was entitled to an upfront payment of $ 35 million from Immedica, which was received in May 2022. Under the terms of the License Agreement, the Company is eligible to receive regulatory and commercial milestone payments and is entitled to receive royalties in the mid-20 percent range on net sales of the product in certain countries that may result from the License Agreement. The Company will continue to be responsible for certain clinical development activities and the manufacturing of Iomab-B and will retain commercialization rights in the U.S. and rest of the world. The Company’s contract liabilities are recorded within Other revenue deferred – current liability or Long-term license revenue deferred in its condensed consolidated balance sheets depending on the short-term or long-term nature of the payments to be recognized. The Company’s contract liabilities primarily consist of advanced payments from licensees. Other revenue deferred – current liability was $ 0.1 million at September 30, 2022 and $ 0.9 million at December 31, 2021. Long-term license revenue deferred was $ 35.0 million at September 30, 2022; there was no long-term license revenue deferred at December 31, 2021. This deferred revenue will be recognized upon European Union regulatory approval of Iomab B. Note 5 - Equity In August 2020 the Company entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, or 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 a shelf registration statement on Form S-3 filed with the SEC on August 7, 2020. As of December 31, 2021, the Company had sold 6.7 million shares of common stock, resulting in gross proceeds of $ 59.1 million and net proceeds of $ 57.0 million. For the nine months ended September 30, 2022, the Company sold 3.0 million shares of common stock, resulting in gross proceeds of $ 18.9 million and net proceeds of $ 18.3 million. For the nine months ended September 30, 2021, the Company sold 4.5 million shares of common stock, resulting in gross proceeds of $ 35.6 million and net proceeds of $ 34.5 million. On June 28, 2022, the Company entered into an Amendment and Restated Capital on Demand™ Sales Agreement (the “A&R Sales Agreement”) with JonesTrading and B. Riley Securities, Inc. (“B. Riley Securities”). The A&R Sales Agreement modifies the original Capital on Demand™ Sales Agreement to include B. Riley Securities as an additional sales agent thereunder. 13 Stock Options The following is a summary of stock option activity for the nine months ended September 30, 2022: (amounts in thousands, except for per-share amounts) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding, January 1, 2022 1,362 $ 12.45 8.69 $ - Granted 1,885 4.99 Cancelled ( 55 ) 11.06 Outstanding, September 30, 2022 3,192 8.06 9.03 5,377 Exercisable, September 30, 2022 638 17.94 7.43 397 During the nine months ended September 30, 2022, the Company granted options to purchase 1.9 million shares of common stock with an exercise price ranging from $ 4.96 to $ 8.46 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of $ 6.6 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 1.52% to 3.45% (2) expected life of 6 years, (3) expected volatility range from 78.8% to 80.2%, and (4) zero expected dividends. The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2022 was $ 9.7 million related to unvested options, which is expected to be expensed over a weighted average of 3.5 years. During the nine months ended September 30, 2022 and 2021, the Company recorded compensation expense related to stock options of $ 1.6 million and $ 1.0 million, respectively. Restricted Stock Units The Company issued 300 thousand restricted stock units (“RSUs”) in August 2022 to an employee. These RSUs were immediately vested on the date of the grant, however, shares under the RSUs will not be issued until the earlier of a change of control event, the termination of the recipient’s continuous service status for any reason other than by the Company for cause, or the third anniversary of the date of the grant. The fair value of the RSUs, $ 1.8 million, was determined based on the stock price of $ 5.85 on the date of the grant and is being recognized over three years . The unrecognized compensation expense at September 30, 2022 of $ 1.7 million is expected to be expensed over 2.9 years. During the three months and nine months ended September 30, 2022, the Company recorded compensation expense related to RSUs of $ 0.1 million. Warrants Following is a summary of warrant activity for the nine months ended September 30, 2022: (in thousands, except for per-share amounts) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding, January 1, 2022 2,112 $ 20.52 1.76 $ 276 Granted - - Exercised - - Cancelled/Expired ( 669 ) 29.01 Outstanding, September 30, 2022 1,443 $ 16.58 1.58 $ - Exercisable, September 30, 2022 1,440 $ 15.95 1.58 $ - On August 2, 2022, warrants to purchase an aggregate of 0.6 million shares of common stock expired. These warrants were issued on August 2, 2017, when the Company completed an underwritten offering of 0.7 million shares of common stock and warrants to purchase 0.6 million shares of common stock at a price of $ 22.50 per share and related warrant. The warrants were exercisable for a period of 5 years at an exercise price of $ 31.50 per share. Note 6 – Subsequent Event Since September 30, 2022, the Company has sold 0.3 million shares of common stock under its A&R Sales Agreement, resulting in net proceeds of $ 2.7 million. 14