What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-29 compared with 2023-03-31 · 138 added, 120 removed, 223 unchanged (54% of the section changed)

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Total operating expenses

Other income:

Interest income – net

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We determined that certain

collaborations with a third-party are within the scope of Topic ASC 606, Revenue Recognition from Contracts with Customers, or

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

collaborations with a third-party were within the scope of Topic ASC 606, Revenue Recognition from Contracts with Customers, or

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

While the third party has

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services within each module for which we receive monetary consideration.

The consideration is recognized as revenue over each module and

revenue of $0.9 million was recognized during each of the years ended December 31, 2022 and December 31, 2021.

The consideration was recognized as revenue over each module

and revenue of $0.9 million was recognized during the year ended December 31, 2022.

There was no corresponding revenue recognized from

a collaboration during the year ended December 31, 2023.

The National Institutes of

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We recognized other revenue during the

years ended December 31, 2022 and 2021 of $0.1 million and $0.2 million, respectively, from this grant.

years ended December 31, 2023 and December 31, 2022 of $0.1 million in each year from this grant.

On April 7, 2022, we entered

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advanced payments from licensees.

There was no Other revenue deferred-current liability at December 31, 2022, Other revenue deferred –

current liability was $1.0 million at December 31, 2021.

Long-term license revenue deferred was $35.0 million at December 31, 2022, resulting

from the receipt from Immedica;

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.

Long-term license revenue deferred was $35.0 million at both December 31, 2023 and December 31, 2022,

resulting from the receipt from Immedica.

This deferred revenue will be recognized upon European Union regulatory approval of Iomab-B.

Research and Development Expense, net of reimbursements

Research and development expenses increased by $5.1 million to $23.1

million for the year ended December 31, 2022 compared to $18.0 million for the year ended December 31, 2021.

Higher expenses were primarily

due to increased CMC activity related to Iomab-B, as well as increased compensation of $1.0 million resulting from increased headcount.

Research and development expenses

increased by $15.6 million to $38.7 million for the year ended December 31, 2023 compared to $23.1 million for the year ended December

Higher expenses were primarily due to increased CMC activity related to the planned BLA and MAA-enabling work for Iomab-B.

addition, increased compensation of $4.3 million resulting from higher headcount, primarily to support BLA and MAA-enabling activity.

General and Administrative Expenses

General and administrative

expenses increased by $3.9 million to $12.0 million for the year ended December 31, 2022 compared to $8.1 million for the year ended December

Higher expenses were primarily due to increased compensation of $0.9 million, increased non-cash equity compensation of $1.0

million, higher professional fees and consulting fees including recruitment costs, and higher legal fees.

expenses increased by $1.3 million to $13.3 million for the year ended December 31, 2023 compared to $12.0 million for the year ended

December 31, 2022.

Higher expenses were primarily due to increased compensation of $0.9 million resulting from higher headcount and increased

non-cash equity compensation of $0.8 million, partially offset by lower consulting fees and legal fees.

Other income is comprised

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Other income of $3.1 million for the year ended December 31, 2023 increased from $1.1

million for the year ended December 31, 2021 due to a higher average balance and higher interest rates.

Net loss increased by $8.2 million to $33.0 million for the year ended

December 31, 2022 compared to $24.8 million for the year ended December 31, 2021, primarily due to higher research and development expenses

and general and administrative expenses, partially offset by other income.

million for the year ended December 31, 2022 primarily due to higher interest rates.

Net loss increased by $15.8

million to $48.8 million for the year ended December 31, 2023 compared to $33.0 million for the year ended December 31, 2022, primarily

due to higher research and development expenses largely attributed to increased CMC activity and headcount to support the planned BLA

and MAA-enabling activity and general and administrative expenses, partially offset by other income, as discussed above.

Liquidity and Capital Resources

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(amounts in thousands)

Cash provided by/used in operating activities

Cash (used in)/provided by operating activities

Cash used in investing activities

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Net change in cash, cash equivalents and restricted cash

Net cash provided by operating

activities for the year ended December 31, 2022 of $8.6 million increased by $29.5 million from a use of funds of $20.9 million for the

year ended December 31, 2021.

This increase was due to the receipt of the $35.0 million up-front payment from Immedica.

Net cash used in operating

activities for the year ended December 31, 2023 was $47.3 million, a decrease of $56.0 million from $8.6 million of net cash provided

by operating activities in the prior-year period, primarily as a result of the higher net loss of $15.8 million and the receipt in the

prior-year period of the $35.0 million up-front payment from Immedica.

Net cash used in investing

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to the purchase of equipment for our laboratory space.

In August 2020 we entered

into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, or JonesTrading, pursuant to which we

would be able to sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of its common stock.

28, 2022, we entered into an Amendment and Restated Capital on Demand™ Sales Agreement, or the Amended Sales Agreement, with JonesTrading

In August 2020, we entered into the Capital on Demand™ Sales

Agreement with JonesTrading Institutional Services LLC, or JonesTrading, pursuant to which we are able to sell, from time to time, through

or to JonesTrading, up to an aggregate of $200 million of our common stock.

On June 28, 2022, we entered into an Amendment and Restated

Capital on Demand™ Sales Agreement, or the Amended Sales Agreement, with JonesTrading and B.

Riley Securities, Inc.

The Amended Sales Agreement modifies the original Capital on Demand™ Sales Agreement to include B.

Riley as an additional sales agent thereunder.

Shares of common stock are offered pursuant to a shelf registration statement on Form S-3

filed with the SEC on August 7, 2020.

For the year ended December 31, 2022, we sold 3.5 million shares of common stock, resulting in gross

proceeds of $23.9 million and net proceeds of $23.2 million.

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

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

As of December 31, 2022, we have sold 10.2 million

shares of common stock, resulting in gross proceeds of $83.0 million and net proceeds of $80.2 million relating to the Sales Agreement,

We entered into a lease for

corporate office space effective June 1, 2022 and paid a security deposit to the landlord.

The lease has a term of 5 years 2 months, with

an expiration date in 2027, and current annual rent of $0.6 million.

We are also responsible for certain other costs, such as insurance,

utilities and maintenance.

In July 2022, a certificate of deposit was provided as collateral for a letter of credit and the security deposit

was returned.

We will require additional

funds to conduct clinical and non-clinical trials, achieve regulatory approvals, and, subject to such approvals, commercially launch our

product candidates, and will need to secure additional financing in the future to support our operations.

As of the date of filing this

report, we expect that our existing resources will be more than sufficient to fund our planned operations for more than 12 months following

the date of this report.

We base this belief on assumptions that are subject to change, and we may be required to use our available cash

and cash equivalent resources sooner than we currently expect.

Our actual future capital requirements will depend on many factors, including

the progress and results of our ongoing clinical trials, the duration and cost of discovery and preclinical development, laboratory testing

and clinical trials for our pipeline candidates, the timing and outcome of regulatory review of our product candidates, the costs involved

in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the number

and development requirements of other pipeline candidates that we pursue, and the costs of commercialization activities, including product

marketing, sales, and distribution.

Riley as an additional sales

agent thereunder.

Shares of common stock are offered pursuant to a shelf registration statement on Form S-3 (File No.

333-242322) filed

with the SEC on August 7, 2020 (the “Prior Shelf Registration Statement”).

On August 11, 2023, we filed a new registration

statement on Form S-3 (File No.

333-273911), and amended on February 2, 2024, which was declared effective on February 5, 2024, to replace

the Prior Shelf Registration Statement, including a base prospectus which covers the offering, issuance and sale of up to $500 million

of common stock, preferred stock, warrants, units and/or subscription rights;

and a sales agreement prospectus covering the offering,

issuance and sale of up to a maximum aggregate offering price of $200 million of common stock that may be issued and sold under the Amended

Sales Agreement.

For the year ended December 31, 2023, we sold 1.9 million shares of common stock, resulting in gross proceeds of $15.1

million and net proceeds of $14.6 million.

For the year ended December 31, 2022, we sold 3.5 million shares of common stock, resulting

in gross proceeds of $23.9 million and net proceeds of $23.2 million.

We entered into a lease

for corporate office space effective June 1, 2022.

The lease has a term of five years two months, with an expiration date in 2027, and

current annual rent of $0.6 million.

We are also responsible for certain other costs, such as insurance, utilities and maintenance.

issued a letter of credit in connection with the lease and as of December 31, 2023 maintain a $0.3 million certified deposit as collateral

for the letter of credit.

We will require

additional funds to conduct clinical and non-clinical trials, achieve regulatory approvals, and, subject to such approvals,

commercially launch our product candidates, and will need to secure additional financing in the future to support our operations.

of the date of filing this report, we expect that our existing resources will be more than sufficient to fund our planned operations

for more than 12 months following the date of this report.

We base this belief on assumptions that are subject to change, and we may

be required to use our available cash and cash equivalent resources sooner than we currently expect.

Our actual future capital

requirements will depend on many factors, including the progress and results of our ongoing clinical trials, the duration and cost

of discovery and preclinical development, laboratory testing and clinical trials for our pipeline candidates, the timing and outcome

of regulatory review of our product candidates, the costs involved in preparing, filing, prosecuting, maintaining, defending, and

enforcing patent claims and other intellectual property rights, the number and development requirements of other pipeline candidates

that we pursue, and the costs of commercialization activities, including product marketing, sales, and distribution.

We expect to continue to operate

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sheet arrangements.

Critical Accounting Policies

Critical Accounting Estimates

Our management’s discussion

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goods or services we transfer to the customer.

At contract inception, once

the contract is determined to be within the scope of ASC 606, we assess 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, we evaluate 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).

At contract inception,

once the contract is determined to be within the scope of ASC 606, we assess 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, we evaluate 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).

ASC 606 requires us to allocate

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Grant Revenue

We had a grant from a government-sponsored

entity for research and development related activities that provided for payments for reimbursed costs, which included overhead and general

We have a grant from a government-sponsored

entity for research and development related activities that provides for payments for reimbursed costs, which included overhead and general

and administrative costs as well as an administrative fee.

We recognized revenue from the grant as we performed services under this arrangement.

Associated expenses were recognized when incurred as research and development expense.

We recognize revenue from the grant as we perform services under this arrangement.

Associated expenses are recognized when incurred as research and development expense.

Revenue and related expenses are presented gross

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adjustments are recorded on a cumulative catch-up basis and recorded as part of license revenues during the period of adjustment.

Sales-based milestone payments

and royalties :

For arrangements that include sales-based royalties, including milestone payments based on the volume of sales, we

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, we 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).

Sales-based milestone

payments and royalties :

For arrangements that include sales-based royalties, including milestone payments based on the volume of

sales, we 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, we 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

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interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Accounting Standards Recently Adopted

In May 2021, the Financial

Accounting Standards Board, or 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.

We adopted this standard effective January 1, 2022 and the standard did not have a material effect

on our financial statements.

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.

We adopted this standard effective January 1, 2022 and the standard

did not have a material impact on our financial statements.

Accounting Standards Recently Issued

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.

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

Early adoption is permitted, including adoption

in an interim period.

We will evaluate the impact of ASU 2021-08 on any future business combinations that we may enter in the

Recently Issued Accounting Pronouncements

In December 2023, FASB issued

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to enhance the transparency and decision usefulness

of income tax disclosures.

The amendments in ASU 2023-09 provide improvements primarily related to the rate reconciliation and income

taxes paid information included in income tax disclosures.

We would be required to disclose additional information regarding reconciling

items equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applicable statutory tax

Similarly, we would be required to disclose income taxes paid (net of refunds received) equal to or greater than five percent of

total income taxes paid (net of refunds received).

The amendments in ASU 2023-09 are

effective January 1, 2025, including interim periods.

Early adoption is permitted for annual financial statements that have not yet been

issued or made available for issuance.

We will evaluate the impact of ASU 2023-09 on our financial statements.

In November 2023, FASB

issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures , which provides

improvements to reportable segment disclosure requirements, primarily through enhanced disclosures around segment expenses.

2023-07 requires us to disclose significant segment expenses that are regularly provided to the chief operating decision maker, or

CODM, and included within each reported measure of segment profit or loss.

ASU 2023-07 also requires that we disclose an amount for

other segment items by reportable segment, a description of their composition and provide all annual disclosures about a reportable

segment’s profit or loss and assets pursuant to Topic 280 during interim periods.

We must also disclose the CODM’s title

and position, as well as certain information around the measures used by the CODM and an explanation of how the CODM uses the

reported measures in assessing segment performance and deciding how to allocate resources.

For public entities with a single

reportable segment, the entity must provide all the disclosures required by pursuant to ASU 2023-07 and all existing segment

disclosures under Topic 280.

The amendments of ASU 2023-07 are effective for us for annual

periods beginning January 1, 2024, and effective for interim periods beginning January 1, 2025.

Early adoption is permitted for

annual financial statements that have not yet been issued or made available for issuance.

will evaluate the impact of ASU 2023-07 on our financial statements.

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

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.

We will evaluate the impact of ASU 2021-08 on any future business combinations

we may enter in the future.

Subsequent Event

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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 7. Management’s Discussion and Analysis