What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-12 compared with 2021-08-12 · 196 added, 166 removed, 593 unchanged (38% of the section changed)

10 unchanged sentences

(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE AMOUNTS)

September 30,

Current assets:

29 unchanged sentences

no shares issued or outstanding)

Shareholders’ equity/(deficit):

Shareholders’ equity:

Ordinary shares, £ 0.000025 nominal value;

13 unchanged sentences

Noncontrolling interest

Total shareholders’ equity/(deficit)

Total shareholders’ equity

Total liabilities, redeemable convertible preferred shares and shareholders’ equity

5 unchanged sentences

Three months ended

Six months ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine months ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

License revenue

16 unchanged sentences

Tax (expense)/benefit

Net loss attributable to noncontrolling interest

Net loss attributable to Vaccitech Plc.

Weighted-average ordinary shares outstanding, basic and diluted

Net loss per share attributable to ordinary shareholders, basic and diluted

Other comprehensive income/(loss) – foreign currency translation adjustments

Comprehensive loss

Comprehensive loss attributable to noncontrolling interest

Comprehensive loss attributable to Vaccitech Plc.

Net (loss)/ income

Net loss/ (income) attributable to noncontrolling interest

Net (loss)/ income attributable to Vaccitech plc Shareholders

Weighted-average ordinary shares outstanding, basic

Weighted-average ordinary shares outstanding, diluted

Net( loss)/ income per share attributable to ordinary shareholders, basic

Net (loss)/ income per share attributable to ordinary shareholders, diluted

Net (loss)/ income

Other comprehensive (loss)/ income – foreign currency translation adjustments

Comprehensive (loss)/ income

Comprehensive loss/ (income) attributable to noncontrolling interest

Comprehensive (loss)/ income attributable to Vaccitech plc shareholders

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

3 unchanged sentences

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

Six months ended June 30, 2021

Nine months ended September 30, 2021

Convertible Preferred

7 unchanged sentences

Shareholders’

(Deficit)/Equity

Balance, January 1, 2021, as previously reported

16 unchanged sentences

Balance, June 30, 2021

Share-based compensation

Offering cost refund

Foreign currency translation adjustments

Balance, September 30, 2021

1 Indicates amount less than thousand

4 unchanged sentences

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

Six months ended June 30, 2020

Nine months ended September 30, 2020

Convertible Preferred

18 unchanged sentences

Balance, June 30, 2020

Share-based compensation

Exercise of stock options

Foreign currency translation adjustments

Balance, September 30, 2020

1 Indicates amount less than thousand

3 unchanged sentences

(IN THOUSANDS)

Six months ended

June 30, 2021

June 30, 2020

Nine months ended

September 30, 2021

September 30, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

26 unchanged sentences

Proceeds from issuance of ordinary shares, net of underwriters fees

Transaction costs for convertible loan notes

Proceeds from convertible loan notes

Net cash provided by financing activities

6 unchanged sentences

Cash paid for income taxes

Non-Cash investing activities

Capital expenditures included in accounts payable

Non-Cash financing activities

Non-Cash investing and financing activities

Issue of ordinary shares

3 unchanged sentences

Issue of Series B shares

ROU assets obtained in exchange for operating lease liabilities

1 Indicates amounts less than thousand

22 unchanged sentences

Certain notes or other information that are normally required by GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements.

Accordingly, the unaudited condensed consolidated financial statements should be read in connection with the Company’s audited financial statements and related notes as of and for the year ended December 31, 2020.

On May 4, 2021, the Company effected a 309 -for-1 stock split of ordinary shares.

9 unchanged sentences

Unaudited Condensed Financial Information

The accompanying Condensed Consolidated Balance Sheet as of June 30, 2021, the Condensed Consolidated Statements of Operations and Comprehensive Loss and Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit) for the three months and six months ended June 30, 2021 and 2020 and the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 are unaudited.

The accompanying Condensed Consolidated Balance Sheet as of September 30, 2021, the Condensed Consolidated Statements of Operations and Comprehensive loss and Condensed Consolidated Statements Of Changes In Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit) for the three months and nine months ended September 30, 2021 and 2020 and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 are unaudited.

These unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements.

In our opinion, the unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2021, our results of operations for the three months and six ended June 30, 2021 and 2020, and our cash flows for the six months ended June 30, 2021 and 2020.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, or any other interim periods.

In our opinion, the unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of September 30, 2021, our results of operations for the three and nine months ended September 30, 2021 and 2020, and our cash flows for the nine months ended September 30, 2021 and 2020.

The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, or any other interim periods.

Summary of Significant Accounting Policies

20 unchanged sentences

Net Loss Per Share

Because the Company has reported a net loss attributable to ordinary shareholders for the period presented, basic and diluted net loss per share attributable to ordinary shareholders are the same for the period presented.

All stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact.

The following table sets forth the computation of basic and diluted net loss per share for the three months and six months ended June 30, 2021 and 2020 (in thousands, except number of shares):

Three months ended June 30,

Six months ended June 30,

Net loss attributable to noncontrolling interest

Net loss attributable to Vaccitech shareholders

Weighted-average ordinary shares outstanding, basic and diluted

Net loss per share attributable to ordinary shareholders, basic and diluted

The weighted-average ordinary shares outstanding includes 514,923 shares issuable on vesting of the restricted stock units with a performance condition linked to the IPO resolution date (see note 11).

Because the Company has reported a net loss attributable to ordinary shareholders for the periods presented, basic and diluted net loss per share attributable to ordinary shareholders are the same for the periods presented, except for the period ended September 30, 2020 in which the Company reported net income attributable to ordinary shareholders.

The following table sets forth the computation of basic and diluted net loss per share for the three months and nine months ended September 30, 2021 and 2020 (in thousands, except number of shares):

Three months ended September 30,

Nine months ended September 30,

Net (loss)/income

Net (loss)/income attributable to noncontrolling interest

Net (loss)/income attributable to Vaccitech shareholders

Weighted-average ordinary shares outstanding, basic

Effect of dilutive securities

Stock Options

Series A Shares

Weighted-average ordinary shares outstanding, diluted

Net (loss)/ income per share attributable to ordinary shareholders, basic

Net (loss)/ income per share attributable to ordinary shareholders, diluted

The weighted-average ordinary shares outstanding for the three months and nine months ended September 30, 2021 includes 514,923 shares issuable on vesting of the restricted stock units with a performance condition linked to the IPO resolution date (see note 11).

Potential ordinary shares issuable for stock options that are excluded from the computation of diluted weighted-average shares outstanding because including them would have had an anti-dilutive effect are as follows:

Six months ended June 30,

Nine months ended September 30,

Stock options

3 unchanged sentences

Prepaid and other current assets (in thousands)

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

Accrued expenses and other current liabilities consist of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

6 unchanged sentences

Ordinary Shares

On May 4, 2021, the Company closed its initial public offering (“IPO”) of 6,500,000 ADS representing 6,500,000 ordinary shares having a nominal value of £ 0.000025 per share, at a public offering price of $ 17.00 per share, for aggregate net proceeds of $ 102,765 thousand after deducting underwriting commissions of $ 7,735 thousand and incurred offering cost of $ 2,394 thousand.

All ordinary shares rank pari passu as a single class.

The following is a summary of the rights and privileges of the holders of ordinary shares as of June 30, 2021:

The following is a summary of the rights and privileges of the holders of ordinary shares as of September 30, 2021:

Liquidation preference:

14 unchanged sentences

Series A and Series B shares

On March 15, 2021, the Company issued 28,957 Series B preferred shares (“Series B Shares”) amounting to $ 125,239 thousand and incurred transaction cost of $ 3,402 thousand.

On March 15, 2021, the Company issued 28,957 Series B preferred shares (“Series B Shares”) amounting to $ 125,239 thousand and incurred transaction costs of $ 3,402 thousand.

On March 31, 2021, Vaccitech plc subdivided each of the Series A shares and Series B shares (including the Series B shares issued on conversion of the convertible loan notes) into one share of the same class and one deferred A share with a nominal value of £ 1.00 per share.

1 unchanged sentence

Convertible loan notes

The Company recognized interest expense of $ 2,650 thousand and a change in fair value of $ 5,994 thousand in relation to the conversion and redemption features embedded in the convertible loan notes in the condensed consolidated statements of operations and comprehensive loss for the period ended June 30, 2021.

For the period ended September 30, 2020, interest expense was $ 969 thousand and change in fair value in relation to the conversion and redemption features embedded in the convertible loan notes was $ 3 thousand.

The Series B funding on March 15, 2021 constituted a qualified equity financing in accordance with the terms of the convertible loan notes.

1 unchanged sentence

The conversion was accounted for as an extinguishment of the convertible loan notes.

As a result, the 12,421 Series B preferred shares issued on conversion was recognized at the settlement-date fair value of the Series B shares ($ 53,721 thousands) and a loss of $ 13,789 thousand for the six month period was recognized in earnings for the difference between (1) the fair value of those shares and (2) the sum of the carrying amounts of the convertible loan notes ($ 25,557 thousand) and the bifurcated conversion and redemption feature liability ($ 14,375 thousand).

As a result, the 12,421 Series B preferred shares issued on conversion was recognized at the settlement-date fair value of the Series B shares ($ 53,721 thousands) and a loss of $ 13,789 thousand for the nine month period was recognized in earnings for the difference between (1) the fair value of those shares and (2) the sum of the carrying amounts of the convertible loan notes ($ 25,557 thousand) and the bifurcated conversion and redemption feature liability ($ 14,375 thousand).

Deferred Shares

2 unchanged sentences

The deferred shares shall confer on the holders thereof no further right to participate in the assets of the Company.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities.

As of June 30, 2021, and December 31, 2020, the carrying amount of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

VACCITECH PLC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities.

As of September 30, 2021, and December 31, 2020, the carrying amount of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

As of December 31, 2020, the Company had an embedded derivative liability of $ 20,109 thousand related to the conversion features, the cash redemption feature on maturity and the cash redemption feature upon an exit event that settles in noncash consideration embedded in convertible loan notes.

2 unchanged sentences

The changes in the fair value of the embedded derivatives was as follows (in thousands):

Six months ended June 30,

Nine months ended September 30,

Beginning balance

10 unchanged sentences

Option awards generally vest over one to four years , but vesting conditions can vary at the discretion of the Company’s Board.

As of June 30, 2021, 2,162,114 ordinary shares are available for future grants.

As of September 30, 2021, 2,131,214 ordinary shares are available for future grants.

On April 30, 2021, the Company granted 1,513,566 options under the Plan to employees and directors with a grant date fair value $ 11.33 per option and a weighted average exercise price of $ 17.00 per option.

For the six months ended June 30, 2021, the Company granted 1,878,186 options with a weighted average grant date fair value of $ 10.91 per option and a weighted average exercise price of $ 13.70 of which 364,620 options were issued under the Enterprise Management Incentive Share Option Scheme which has been discontinued on adoption of the Plan.

For the six months ended June 30, 2020, the Company granted 302,820 options to employees and directors under the Enterprise Management Incentive Share Option Scheme with a weighted average grant date fair value of $ 4.98 and a weighted average exercise price of $ 0.00036 per share.

On September 30, 2021, the Company granted 30,900 options under the Plan with a grant date fair value of $ 12.83 and a weighted average exercise price of $ 14.96 per option.

For the nine months ended September 30, 2021, the Company granted 1,909,086 options with a weighted average grant date fair value of $ 10.94 per option and a weighted average exercise price of $ 13.72 of which 364,620 options were issued under the Enterprise Management Incentive Share Option Scheme which has been discontinued on adoption of the Plan.

For the nine months ended September 30, 2020, the Company granted 302,820 options to employees and directors under the Enterprise Management Incentive Share Option Scheme with a weighted average grant date fair value of $ 4.98 and a weighted average exercise price of $ 0.00036 per share.

VACCITECH PLC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The fair value of each stock option issued to employees was estimated at the date of grant using Black-Scholes with the following weighted-average assumptions:

Six months ended June 30,

Nine months ended September 30,

Expected volatility

2 unchanged sentences

Expected dividend yield

VACCITECH PLC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On April 22, 2021, the exercise price of 267,903 options was changed from $ 0.0004 (£ 0.0003 ) to $ 4.84 (£ 3.49 ) in order to enable employees to benefit from tax advantages under the Enterprise Management Incentive Scheme.

This modification did not result in an incremental compensation cost and the Company continues to recognize compensation cost on these options equal to the grant date fair value of the original award.

At June 30, 2021 3,408,663 options with a weighted average exercise price of $ 7.84 were outstanding of which 703,495 with a weighted average exercise price of $ 0.35 were exercisable.

At June 30, 2021, there was $ 19,825 thousand unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 2.66 years.

During the three months and six months ended June 30, 2021, 514,923 restricted stock units with a performance condition linked to the IPO resolution date vested on occurrence of the IPO resulting in $ 5,760 thousand recognized as compensation cost .

At September 30, 2021 3,356,648 options with a weighted average exercise price of $ 7.98 were outstanding of which 741,219 with a weighted average exercise price of $ 0.38 were exercisable.

At September 30, 2021, there was $ 16,061 thousand unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 2.37 years.

During the six months ended June 30, 2021, 514,923 restricted stock units with a performance condition linked to the IPO resolution date vested on occurrence of the IPO resulting in $ 5,760 thousand recognized as compensation cost .

Share-based compensation expense is classified in the unaudited condensed consolidated statement of operations and comprehensive loss as follows (in thousands):

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Research and development

3 unchanged sentences

Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed at the reporting date.

As of June 30, 2021, the Company did not have any contract assets.

As of September 30, 2021, the Company did not have any contract assets.

Contract liabilities primarily relate to payments received from customers in advance of performance under the contract and are disclosed as deferred revenue separately in the Condensed Consolidated Balance Sheet.

1 unchanged sentence

Changes in the contract liabilities during the period are as follows:

June 30, 2021

September 30,

Balance at December 31, 2020

1 unchanged sentence

Foreign exchange translation

Balance at June 30, 2021

Balance at September 30, 2021

VACCITECH PLC.

9 unchanged sentences

The obligation to make these payments is contingent upon the Company’s ability to develop candidates for submission for phased testing and approvals, and for the development of markets for the products developed by the Company.

The Company has not made any material payments under these license agreements during the periods ended June 30, 2021 and June 30, 2020.

The Company has not made any material payments under these license agreements during the periods ended September 30, 2021 and September 30, 2020.

The Company leases certain laboratory and office space under operating leases, which are described below.

The Oxford Science Park, Oxford

The Company leases an office and laboratory space from a related party in Oxford, England under an operating lease with a contractual term expiring in 2028.

1 unchanged sentence

Variable payments include amounts due to the lessor for additional services and cost reimbursements.

The Harwell Science and Innovation Campus, Oxfordshire

On September 3, 2021, the Company entered into a lease agreement for the lease of approximately 31,000 square feet in Harwell, Oxfordshire which expires in September 2031.

The Company intends to use the property as its corporate headquarters.

As the Company's leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date, being the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment.

The Company has provided the lessor with a refundable security deposit of $ 719 thousand (£ 534 thousand) which is included in Other assets.

The Company recorded a right-of-use asset and a lease liability on the effective date of the lease term.

The Company’s right-of-use asset and lease liability are as follows (in thousands):

September 30,

Right-of-use asset

1 unchanged sentence

Lease liability, noncurrent

VACCITECH PLC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other information

Six months ended June 30,

Nine months ended September 30,

Cash paid for amounts included in the measurement of lease liabilities

During the six months ended June 30, 2021, the Company recorded $ 189 thousand (six months ended June 30, 2020:

During the nine months ended September 30, 2021, the Company recorded $ 372 thousand (nine months ended September 30, 2020:

$ 253 thousand) in operating lease costs (including short-term lease expense and variable lease costs).

VACCITECH PLC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Future annual minimum lease payments under operating leases as of June 30, 2021 were as follows (in thousands):

Future annual minimum lease payments under operating leases as of September 30, 2021 were as follows (in thousands):

Remainder of 2021

6 unchanged sentences

Related Party Transactions

During the three months and six months ended June 30, 2021, the Company paid $ 86 thousand and $ 126 thousand respectively (three months and six months ended June 30, 2020:

$ 120 thousand and $ 170 thousand respectively) to its shareholder, Oxford Sciences Innovation Plc, mostly related to the lease of a laboratory and office space in Oxford.

At June 30, 2021, the Company owed $ 0 (December 31, 2020:

$ 0 ) to Oxford Sciences Innovation Plc.

During the three months and six months ended June 30, 2021, the Company incurred expenses of $ 0 and $ 19 thousand respectively (three months and six months ended June 30, 2020:

$ 100 thousand and $ 100 thousand respectively) to its shareholder, the University of Oxford, related to clinical study costs.

At June 30, 2021, the Company owed $ 0 (December 31, 2020:

$ 300 thousand) to University of Oxford.

During the three months and six months ended June 30, 2021, the Company incurred expenses of $ 24 and $ 141 thousand respectively (three months and six months ended June 30, 2020:

$ 64 thousand and $ 134 thousand respectively) for services from Oxford University Innovation Limited which is a wholly owned subsidiary of the Company’s shareholder, the University of Oxford.

At June 30, 2021, the Company owed $ 21 thousand (December 31, 2020:

$ 25 thousand) to Oxford University Innovation Limited.

During the three months and six months ended June 30, 2021, the Company incurred expenses of $ 16 thousand and $ 49 thousand respectively (three months and six months ended June 30, 2020:

$ 0 thousand and $ 6 thousand respectively) to its shareholder, the Oxford University Hospitals, related to clinical study costs.

At June 30, 2021, the Company owed $ 0 thousand (December 31, 2020:

$ 0 thousand) to Oxford University Hospitals.

During the six months ended June 30, 2021, the Company issued 263,886 shares with a nominal value of £0.000025 per share at a price of £ 0.00032 per share to William Enright, Chief Executive officer and director in relation to vested RSUs.

During the six months ended June 30, 2020, the Company issued 479,568 shares with a nominal value of £0.000025 per share at a price of £ 0.00032 per share to William Enright, Chief Executive officer and director.

During the six months ended June 30, 2021, the interest on convertible loans issued to Oxford Sciences Innovation PLC and the University of Oxford, shareholders of the Company was $ 429 thousand (June 30, 2020:

At June 30, 2021 these convertible loan notes including the embedded derivative was $ 0 (December 31, 2020:

During the three months and nine months ended September 30, 2021, the Company paid $ 110 thousand and $ 236 thousand respectively (three months and nine months ended September 30, 2020:

$ 80 thousand and $ 250 thousand respectively) to its shareholder, Oxford Sciences Enterprises plc (formerly, Oxford Sciences Innovation plc), mostly related to the lease of a laboratory and office space in Oxford.

At September 30, 2021, the Company owed $ 0 thousand (December 31, 2020:

$ 0 ) to Oxford Sciences Enterprises plc.

During the nine months ended September 30, 2021, the interest on convertible loans issued to Oxford Sciences Enterprises plc and the University of Oxford, shareholders of the Company was $ 429 thousand (nine months ended September 30, 2020:

$ 368 thousand).

VACCITECH PLC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On March 15, 2021 Oxford Sciences Innovation PLC subscribed to 3,468 Series B Shares in an amount of $ 14,999 thousand.

At September 30, 2021 these convertible loan notes including the embedded derivative was $ 0 (December 31, 2020:

$ 7,356 thousand).

On March 15, 2021 Oxford Sciences Enterprises plc subscribed to 3,468 Series B Shares in an amount of $ 14,999 thousand.

The Company also recognized a loss of $ 2,125 thousand on the conversion of the convertible loan notes into 2,008 Series B Shares.

On May 4, 2021 prior to the closing of the Company’s initial public offering and pursuant to the terms of its articles of association, the Series B Shares were converted into 1,692,084 ordinary shares.

Subsequent Events

July 6, 2021 the Company entered into a clinical trial collaboration agreement with Arbutus Biopharma to evaluate an innovative therapeutic combination for the treatment of subjects with chronic hepatitis B virus infection.

The Phase 2a clinical trial is expected to begin in the first half of 2022 and will be managed by Arbutus Biopharma.

Under the agreement, the parties retain full rights to their respective product candidates and will split all costs associated with the clinical trial.

Pursuant to the agreement, the parties intend to undertake a larger Phase 2b clinical trial depending on the results of the initial Phase 2a clinical trial.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

8 unchanged sentences

Our current therapeutic programs include VTP-300 for the treatment of chronic hepatitis B infection, or CHB, VTP-200 for the treatment of human papilloma virus infection, or HPV, VTP-850 for the treatment of prostate cancer and VTP-600 for the treatment of non-small cell lung cancer, or NSCLC.

Our current prophylactic programs include VTP-400 for the prevention of herpes zoster, or shingles, VTP-500 for the prevention of Middle East respiratory syndrome, or MERS, and VTP-950, our next-generation product candidate for the prevention of COVID-19 infection.

Our current prophylactic programs include VTP-400 for the prevention of herpes zoster, or shingles, and VTP-500 for the prevention of Middle East respiratory syndrome, or MERS.

In addition, we co-invented a COVID-19 vaccine candidate with the University of Oxford, which we assigned to Oxford University Innovation, or OUI, to facilitate the license of those rights by OUI to AstraZeneca UK Limited, or AstraZeneca.

8 unchanged sentences

We have incurred net losses each year since inception.

For the three and six months ended June 30, 2021, we incurred net losses of $16.0 million and $31.4 million, respectively.

For the three and six months ended June 30, 2020, we incurred net losses of $3.7 million and $7.6 million, respectively.

As of June 30, 2021, we had an accumulated deficit of $88.9 million and we do not expect positive cash flows from operations in the foreseeable future.

For the three and nine months ended September 30, 2021, we incurred net losses of $4.6 million and $35.9 million, respectively.

For the three and nine months ended September 30, 2020, we generated a net income of $0.2 million and incurred a net loss of $7.4 million, respectively.

As of September 30, 2021, we had an accumulated deficit of $93.5 million and we do not expect positive cash flows from operations in the foreseeable future.

We expect to continue to incur net operating losses for at least the next several years as we advance our product candidates through clinical development, seek regulatory approval, prepare for approval, and in some cases proceed to commercialization of our product candidates, as well as continue our research and development efforts and invest to establish a commercial manufacturing facility, as and when appropriate.

21 unchanged sentences

In some circumstances, such as the emergence of a significantly more effective therapy from a competitor, it may be appropriate to discontinue a product candidate program.

Including the net proceeds from our IPO, we expect that our cash balance as of June 30, 2021 will enable us to fund our operating expenses and capital requirements into 2024.

Including the net proceeds from our IPO, we expect that our cash balance as of September 30, 2021 will enable us to fund our operating expenses and capital requirements into 2024.

Recent Developments

On July 6, 2021 we announced that we entered into a clinical trial collaboration agreement with Arbutus Biopharma Corporation (“Arbutus”) to evaluate an innovative therapeutic combination for the treatment of subjects with chronic hepatitis B virus (HBV) infection (CHB) who are already receiving standard-of-care nucleos(t)ide reverse transcriptase inhibitor (NrtI) therapy.

The multi-center, Phase 2a clinical trial will evaluate the safety, pharmacokinetics, immunogenicity, and antiviral activity of Arbutus’s proprietary GalNAc delivered RNAi therapeutic, AB-729, followed by our proprietary immunotherapeutic, VTP-300, in NrtI-suppressed subjects with CHB.

The Phase 2a clinical trial is expected to initiate in the first half of 2022 and will be managed by Arbutus, subject to oversight by a joint development committee composed of representatives from both companies.

The parties retain full rights to their respective product candidates and will split all costs associated with the clinical trial.

Pursuant to the agreement, the parties intend to undertake a larger Phase 2b clinical trial depending on the results of the initial Phase 2a clinical trial.

Despite challenges related to COVID-19 pandemic, the lead-in phase of HPV001, a Phase 1/2 clinical trial of VTP-200, is now fully enrolled with 12 participants screened and 9 dosed across multiple clinical trial sites in Belgium and the United Kingdom.

The main phase has been opened to dosing as of July 22, 2021 and we are working to open all remaining clinical trial sites.

On September 3, 2021, we announced the publication of new preclinical data indicating that Vaccitech Oncology Limited’s ChAdOx1/MVA prime-boost immunotherapeutic has potential as a novel cancer treatment.

This research from the University of Oxford and the Ludwig Institute for Cancer Research shows that the cancer immunotherapeutic generates effective anti-tumor immune responses and, in combination with immunotherapy, decreases tumor size and increases the survival rates in mouse models.

The technology is comprised of the ChAdOx vector, which underpins the Oxford-AstraZeneca COVID vaccine.

The prime-boost viral vector product is licensed to Vaccitech Oncology Limited (VOLT), a strategic initiative between the Ludwig Institute for Cancer Research and Vaccitech plc.

In October 2021, we opened a first-in-human clinical trial of the immunotherapeutic (VTP-600) in patients with non-small cell lung cancer.

On September 7, 2021 we announced that we entered into a lease within the Zeus development at Harwell Science and Innovation Campus, Harwell, United Kingdom.

We plan to relocate our headquarters to the site from Oxford by mid-2022.

In October 2021 we completed recruitment for cohorts 1-5 for our Phase 1 (HBV001) clinical trial for VTP-300.

We have already presented interim data from cohorts 1 and 2, and further results are expected to be available in the fourth quarter of 2021 and the first quarter of 2022.

On November 4, 2021, VTP-500 results from the Saudi Arabia Phase 1 study were published in The Lancet Microbe.

The Phase 1 data showed that VTP-500 was generally well tolerated in patients, and we plan to continue further development of the product candidate.

Impact of the COVID-19 Pandemic

The spread of COVID-19, which we refer to as the COVID-19 pandemic, and the policies and regulations implemented by governments in response to the COVID-19 pandemic have had a significant impact, both directly and indirectly, on the global economy and our business and operations, including in particular the interruption of our clinical trial activities and potential interruption to our supply chain.

Namely, the initiation of our Phase 1/2a clinical trial for VTP-200 and our Phase 1 clinical trial for VTP-500, which are being conducted at the University of Oxford sites, were delayed and paused, respectively due to COVID-19.

For our Phase 1/2a clinical trial for VTP-200, participant recruitment is delayed by approximately 3 months.

Sites are affected in both the UK and Belgium.

In the UK, the availability of resources to support set up of trials not related to COVID-19 has been low but recently has showed some signs of easing.

The spread of COVID-19, which we refer to as the COVID-19 pandemic, and the policies and regulations implemented by governments in response to the COVID-19 pandemic have had a significant impact, both directly and indirectly, on the global economy and our business and operations, including continuing disruption to our clinical trial activities.

Of note, the initiation of our Phase 1 clinical trial for VTP-500, which is being conducted at the University of Oxford, was paused due to COVID-19.

In addition, the COVID-19 pandemic has had a negative affect on the operations of our third-party manufacturers and the supply chain for our product candidates and clinical trial materials, due to limitations on travel imposed or recommended by federal, state/provincial or municipal governments, employers and others.

Our study protocols have been amended so that participants who have previously received Vaxzevria (or any other adenovirus-based vaccine) wait for a minimum of 3 months between their last adenovirus vaccine and injection with our immunotherapeutic product candidates to prevent prior vector immunity affecting the study.

In the VTP-200 program the initiation of investigational sites for the Phase 1/2a clinical trial (HPV001) across all countries has been impacted by COVID-19.

The UK is particularly affected as resources to support set up of trials not related to COVID-19 have been low across sites.

Other pandemic related issues affecting recruitment include the mass vaccination programs and the adverse publicity early in the second quarter of 2021 specifically around Vaxzevria.

The VTP-200 protocol had to be amended so that participants who have previously received Vaxzevria (or any other adenovirus-based vaccine) wait for a minimum of 3 months between their last adenovirus vaccine and injection with our immunotherapeutic product to prevent prior vector immunity affecting the study.

Participant recruitment continues to be delayed with last patient first visit anticipated in the first quarter of 2022, and the interim analysis is expected to be available in the third quarter of 2022.

For our Phase 1 (HBV001) clinical trial for VTP-300, recruitment of patients with Chronic Hepatitis B (CHB) in the UK has been challenging, due to COVID-19 lockdowns.

Recruitment is estimated to be completed by the end of the third quarter of 2021 and results of the study are expected to be available in the fourth quarter of 2021.

For our Phase 1b/2a (HBV002) clinical trial for VTP-300, CHB patient recruitment continues with delays in Taiwan due to a recent COVID-19 lockdown in the country.

Patient recruitment has also been delayed in South Korea due to the roll out of Vaxzevria vaccine.

Patient recruitment is estimated to be completed toward the end of the third quarter or the beginning of the fourth quarter of 2021 and with interim data from all patients expected toward the beginning of the first quarter of 2022.

We completed recruitment for cohorts 1-5 in October 2021 and results of the study are expected to be available in the first quarter of 2022.

For our Phase 1b/2a (HBV002) clinical trial for VTP-300, CHB patient recruitment continues with delays in Taiwan due to the ongoing COVID-19 lockdown in the country.

Patient recruitment has also been delayed in South Korea due to the roll out of Vaxzevria vaccine and vaccine hesitancy.

Patient recruitment is estimated to be completed in the first quarter of 2022, with interim data also expected toward the beginning of the first quarter of 2022.

If the disruption due to the COVID-19 pandemic continues, our planned future preclinical and clinical development for our other product candidates could also be delayed due to government orders and site policies as a result of the pandemic.

3 unchanged sentences

and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen.

In response to the spread of COVID-19, we have mandated that our non-laboratory based employees, such as clinical, manufacturing, finance, administrative, quality, regulatory and program managers continue their work outside of our offices and limited the number of staff in any given research and development laboratory at any time.

In response to the spread of COVID-19, we have mandated that our non-laboratory based employees, such as clinical, manufacturing, finance, administrative, quality, regulatory and program managers split their time between working from home and the office, being sure to maintain social distancing and adhere to COVID-19 working guidelines when on the office premises.

In addition, we continue to limit the number of staff in any given research and development laboratory at any time to maintain social distancing.

Our increased reliance on personnel working from home may negatively impact productivity, increase the potential risks of data privacy or security breaches, or disrupt, delay, or otherwise adversely impact our business.

1 unchanged sentence

No assurances can be given that this analysis will enable us to avoid part or all of any impact from the COVID-19 pandemic, including downturns in business sentiment generally or in our sector in particular.

The Delta variant increased, and other variants may increase, COVID-19 case counts significantly, which may further impact our ability to conduct our business.

The impact of government regulations, vaccine adoption rates (including boosters), the effectiveness of vaccines, and the continuing economic effects of the pandemic and containment measures may also further adversely impact our business.

We cannot currently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties on whom we rely or with whom we conduct business were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and adversely impacted.

11 unchanged sentences

Since our inception, we have focused significant resources on our research and development activities, including establishing and building on our adenovirus platform, further enhancing our in-licensed ChAdOx1, ChAdOx2 and MVA vectors, developing a new next-generation adenoviral vector, conducting preclinical studies, developing various manufacturing processes, and advancing clinical development of our programs including Phase 2 clinical trials for VTP-100, which we subsequently discontinued development of, as well as initiating the clinical trials for VTP-200 and VTP-300, and readying VTP-600 and VTP-850 for clinical trials.

Research and development activities account for the major portion of our operating expenses.

development activities account for the major portion of our operating expenses.

Research and development costs are expensed as incurred.

8 unchanged sentences

Our general and administrative expenses consist primarily of personnel costs in our executive, finance, business development and other administrative functions.

Other general and administrative expenses include consulting fees and professional service fees for auditing, tax and legal services, rent expenses related to our offices, depreciation and other central non-research costs.

We expect our general and administrative expenses to continue to increase in the future as we expand our operating activities and potentially prepare for manufacturing and/or commercialization of our current and future product candidates.

2 unchanged sentences

Change in Fair Value of Derivatives

We recognized a change in fair value in relation to the conversion and redemption features embedded in the convertible loan notes in the condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2021.

We had an embedded derivative liability related to the conversion features, the cash redemption feature on maturity and the cash redemption feature upon an exit event that settles in noncash consideration embedded in convertible loan notes.

2 unchanged sentences

Loss on Extinguishment of Convertible Loan Notes

On March 15, 2021, we issued 28,957 Series B preferred shares, or Series B Shares, amounting to $125,239 thousand.

On March 15, 2021, we issued 28,957 Series B preferred shares, or Series B Shares, amounting to $125.2 million.

Each Series B Share is convertible into 309 ordinary shares and nine deferred shares at the holders’ option at any time.

15 unchanged sentences

Actual results could differ from those estimates.

While our significant accounting policies are more fully described in Note 2 to our annual consolidated financial statements for the year ended December 31, 2020 included in our prospectus on Form S-1 dated April 30, 2021, we believe that revenue recognition, accrued research and development expenses, stock based compensation and fair value are most critical to the process of making significant judgments and estimates in the preparation of our financial statements and understanding and evaluating our reported financial results.

While our significant accounting policies are more fully described in Note 2 to our annual consolidated financial statements for the year ended December 31, 2020 included in our prospectus on Form S-1 dated April 30, 2021, we believe that revenue recognition, accrued research and development expenses, stock based compensation and fair value of stock options and embedded derivatives are most critical to the process of making significant judgments and estimates in the preparation of our financial statements and understanding and evaluating our reported financial results.

Results of Operations

Comparison of the Three Months Ended June 30, 2021 and June 30, 2020

Comparison of the Three Months Ended September 30, 2021 and September 30, 2020

The following table sets forth the significant components of our results of operations (in thousands):

ended June 30,

ended September 30,

Revenue from Licenses, Grants & Services

5 unchanged sentences

Other income (expense)

Change in fair value of derivatives

Unrealized exchange gain on convertible loan notes

Interest expense

Research and development incentives

1 unchanged sentence

Tax (expense)/benefit

For the three months ended June 30, 2021, our revenue consisted of service revenue from a research, collaboration and license agreement with Enara Bio.

For the three months ended June 30, 2020, our revenue primarily consisted of $0.3 million of reimbursement of research and development expenses from BARDA and $0.1 million of service revenue from a research, collaboration and license agreement with Enara Bio.

Net (loss)/income

For the three months ended September 30, 2021, our revenue consisted of license revenue from a research, collaboration and license agreement with Enara Bio.

For the three months ended September 30, 2020, our revenue primarily consisted of $2.4 million from the OUI License Agreement Amendment with respect to the AstraZeneca COVID-19 vaccine candidate AZD1222, $0.5 million of reimbursement of research and development expenses from BARDA and $0.1 million of service revenue from a research, collaboration and license agreement with Enara Bio.

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2021 and June 30, 2020:

ended June 30,

The following table summarizes our research and development expenses for the three months ended September 30, 2021 and September 30, 2020:

ended September 30,

Direct research and development expenses by program:

7 unchanged sentences

Total research and development expense

Our research and development expenses for the three months ended June 30, 2021 and for the three months ended June 30, 2020 were $4.5 million and $3.9 million, respectively.

Our research and development expenses for the three months ended September 30, 2021 and 2020 were $4.4 million and $3.7 million, respectively.

Personnel-related expenses were $1.4 million and $0.7 million, respectively, as a result of the relative increase in our headcount across both the UK and US.

Direct expenses for outside services and consultants and laboratory materials were $2.9 million for the three months ended June 30, 2021 and $2.8 million for the three months ended June 30, 2020 and mainly comprised of costs for clinical trials, manufacturing of clinical trial materials, as well as costs for external preclinical services and sample testing.

Direct expenses for outside services and consultants and laboratory materials were $2.9 million for the three months ended September 30, 2021 and $2.7 million for the three months ended September 30, 2020 and mainly comprised of costs for clinical trials, manufacturing of clinical trial materials, as well as costs for external preclinical services and sample testing.

The Other and earlier stage programs for the three months ended September 30, 2021 include a refund of $0.3 million received in respect of the closure of the MVA-based influenza prophylactic, VTP-100, which did not meet defined primary clinical endpoints in 2020.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2021 were $12.4 million, which were mainly attributable to personnel expenses of $8.4 million, including the share-based payment charge, and insurance costs of $1.2 million.

The share-based payment charge includes a one-off expense relating to the RSUs that vested upon the successful completion of our IPO.

For the three months ended June 30, 2020, general and administrative expenses were $1.0 million, including personnel expenses of $0.7 million, and professional fees and consulting fees of $0.3 million.

General and administrative expenses for the two periods included foreign exchange gains and losses on our cash balances.

General and administrative expenses for the three months ended September 30, 2021 were $1.2 million, which were mainly attributable to personnel expenses of $4.4 million, including the share-based payment charge of $2.9 million, insurance costs of $1.8 million and legal and professional fees of $0.8 million, netted by unrealized foreign exchange gain on cash revaluation of $5.8 million.

For the three months ended September 30, 2020, general and administrative expenses were $1.0 million, including personnel expenses of $0.7 million, and professional fees and consulting fees of $0.3 million.

Research and Development Incentives

For the three months ended June 30, 2021 and the three months ended June 30, 2020, we accrued research and development incentives of $0.9 million and $0.7 million, respectively.

Such research and development incentives relate to corporation tax relief on research and development projects incentive programs in the United Kingdom and Australia.

For the three months ended September 30, 2021 and 2020, we accrued research and development incentives of $1.0 million and $1.6 million, respectively.

Such research and development incentives relate to corporation tax relief on research and development projects incentive programs in the United Kingdom.

We account for such relief received as other income.

Comparison of the Six Months Ended June 30, 2021 and June 30, 2020

Comparison of the Nine Months Ended September 30, 2021 and September 30, 2020

The following table sets forth the significant components of our results of operations (in thousands):

ended September

Revenue from Licenses, Grants & Services Operating expenses:

Operating expenses:

Research & development

10 unchanged sentences

Total other (expenses) income

For the six months ended June 30, 2021, our revenue primarily consisted of $0.2 million of reimbursement of research and development expenses from BARDA and $0.04 million of service revenue from a research, collaboration and license agreement with Enara Bio.

For the six months ended June 30, 2020, our revenue primarily consisted of $0.9 million of reimbursement of research and development expenses from BARDA and $0.3 million of service revenue from a research, collaboration and license agreement with Enara Bio.

For the nine months ended September 30, 2021, our revenue primarily consisted of $0.2 million of reimbursement of research and development expenses from BARDA and $0.05 million of license revenue from a research, collaboration and license agreement with Enara Bio.

For the nine months ended September 30, 2020, our revenue primarily consisted of $2.4 million from the OUI License Agreement Amendment with respect to the AstraZeneca COVID-19 vaccine candidate AZD1222, $1.4 million of reimbursement of research and development expenses from BARDA and $0.4 million of service revenue from a research, collaboration and license agreement with Enara Bio.

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2021 and June 30, 2020:

The following table summarizes our research and development expenses for the nine months ended September 30, 2021 and September 30, 2020:

ended September

Direct research and development expenses by program:

7 unchanged sentences

Total research and development expense

Our research and development expenses for the six months ended June 30, 2021 and for the six months ended June 30, 2020 were $9.1 million and $8.1 million, respectively.

Our research and development expenses for the nine months ended September 30, 2021 and 2020 were $13.5 million and $11.8 million, respectively.

Personnel-related expenses were $3.8 million and $2.3 million, respectively, as result of the relative increase in our headcount across both the UK and US.

Direct expenses for outside services and consultants and laboratory materials were $6.5 million for the six months ended June 30, 2021 and $6.0 million for the six months ended June 30, 2020 and mainly comprised of costs for clinical trials, manufacturing of clinical trial materials, as well as costs for external preclinical services and sample testing.

Direct expenses for outside services and consultants and laboratory materials were $9.4 million for the nine months ended September 30, 2021 and $8.7 million for the nine months ended September 30, 2020 and mainly comprised of costs for clinical trials, manufacturing of clinical trial materials, as well as costs for external preclinical services and sample testing.

The Other and earlier stage programs for the nine months ended September 30, 2021 includes a refund of $0.3 million received in respect of the closure of the MVA-based influenza prophylactic, VTP-100, which did not meet defined primary clinical endpoints in 2020.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2021 were $14.1 million, which were mainly attributable to personnel expenses of $9.6 million, including the share-based payment charge, and insurance costs of $1.2 million.

General and administrative expenses for the nine months ended September 30, 2021 were $15.3 million, which were mainly attributable to personnel expenses of $15.5 million, including the share-based payment charge of $11.6 million, insurance costs of $3.0 million and legal and professional fees of $2.2 million, netted by unrealized foreign exchange gain on cash balances of $6.2 million.

The share-based payment charge includes a one-off expense relating to the RSUs that vested upon the successful completion of our IPO.

For the six months ended June 30, 2020, general and administrative expenses were $2.1 million, including personnel expenses of $1.5 million, and professional fees and consulting fees of $0.6 million.

General and administrative expenses for the two periods included foreign exchange gains and losses on our cash balances.

For the nine months ended September 30, 2020, general and administrative expenses were $3.1 million, including personnel expenses of $3.3 million, and professional fees and consulting fees of $0.7 million, netted by unrealized foreign exchange gains on our cash balances of $0.4 million.

Change in fair value of derivatives

For the six months ended June 30, 2021, we recognized a change in fair value of $6.0 million in relation to the conversion and redemption features embedded in the convertible loan notes.

For the nine months ended September 30, 2021, and 2020, we recognized a change in fair value of $6.0 million and $0.003 million, respectively, in relation to the conversion and redemption features embedded in the convertible loan notes.

Loss on extinguishment of convertible loan notes

For the six months ended June 31, 2021, we recognized a loss of $13.8 million related to conversion of convertible loan notes into 12,421 Series B preferred shares.

For the nine months ended September 30, 2021, we recognized a loss of $13.8 million related to conversion of convertible loan notes into 12,421 Series B preferred shares.

The loss is a difference between (1) the fair value of those shares ($53.7 million) and (2) the sum of the carrying amounts of the convertible loan notes ($25.6 million) and the bifurcated conversion and redemption feature liability ($14.4 million).

Interest Expense

For the six months ended June 30, 2021, interest expense was $2.7 million, which primarily relate to our convertible loan notes, which carry a market rate of interest.

Interest expense was nil for the six months ended June 30, 2020.

For the nine months ended September 30, 2021, and 2020, interest expense was $2.7 million and $1.0 million respectively, which primarily relate to our convertible loan notes, which carry a market rate of interest.

Research and Development Incentives

For the six months ended June 30, 2021 and the six months ended June 30, 2020, we accrued research and development incentives of $1.8 million and $1.4 million, respectively.

Such research and development incentives relate to corporation tax relief on research and development projects incentive programs in the United Kingdom and Australia.

For the nine months ended September 30, 2021 and 2020, we accrued research and development incentives of $2.8 million and $3.0 million, respectively.

Such research and development incentives relate to corporation tax relief on research and development projects incentive programs in the United Kingdom.

We account for such relief received as other income.

2 unchanged sentences

Since our inception, we have funded our operations primarily through private and public placements of our ordinary and preferred shares as well as from grants and research incentives, various agreements with public funding agencies, and most recently from an upfront payment from OUI in connection with the OUI License Agreement Amendment and the issuance of convertible loan notes.

Through June 30, 2021, we had received gross proceeds of approximately $324.8 million from the issuance of our ordinary and preferred shares and convertible loan notes.

As of June 30, 2021, we had cash and cash equivalents of $243.6 million.

Through September 30, 2021, we had received gross proceeds of approximately $324.8 million from the issuance of our ordinary and preferred shares and convertible loan notes.

As of September 30, 2021, we had cash and cash equivalents of $233.9 million.

Key financing and corporate milestones include the following:

9 unchanged sentences

The following table sets forth a summary of the primary sources and uses of cash (in thousands) for each period presented:

ended September

Net cash used in operating activities

4 unchanged sentences

Cash Used in Operating Activities

During the six months ended June 30, 2021, net cash used in operating activities was $22.6 million, primarily resulting from our net loss of $31.4 million, adjusted by fair value gain on embedded derivatives of $6.0 million, loss on conversion of convertible loan notes of $13.8 million, share based compensation of $9.5 million, depreciation and amortization of $0.2 million and changes in our operating assets and liabilities, net of $9.3 million.

During the six months ended June 30, 2020, net cash used in operating activities was $5.3 million, primarily resulting from our net loss of $7.6 million, adjusted by share based compensation of $1.3 million, and changes in our operating assets and liabilities, net of $1.0 million.

During the nine months ended September 30, 2021, net cash used in operating activities was $24.6 million, primarily resulting from our net loss of $35.9 million, adjusted by fair value gain on embedded derivatives of $6.0 million, loss on conversion of convertible loan notes of $13.8 million, share-based compensation of $12.9 million, non-cash interest expense of $0.8 million, depreciation and amortization of $0.3 million, foreign exchange gain on convertible loan notes of $0.2 million and changes in our operating assets and liabilities, net of $10.2 million.

During the nine months ended September 30, 2020, net cash used in operating activities was $6.1 million, primarily resulting from our net loss of $7.4 million, adjusted by share-based compensation of $1.4 million, and changes in our operating assets and liabilities, net of $0.3 million.

Net Cash Used in Investing Activities

During the six months ended June 30, 2021 and the six months ended June 30, 2020, cash used in investing activities was $0.6 million and $0.07 million, respectively, which resulted from capital expenditures in connection with new labs, improvements to expand our laboratory space and purchases of property and equipment.

During the nine months ended September 30, 2021 and 2020, cash used in investing activities was $0.7 million and $0.1 million, respectively, which resulted from capital expenditures in connection with new labs, improvements to expand our laboratory space and purchases of property and equipment.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2021, cash provided by financing activities was $224.1 million consisting of $121.8 million of net proceeds from the issuance of Series B shares and $102.8 million of net proceeds from our initial public offering.

During the six months ended June 30, 2020, cash provided by financing activities was nil.

During the nine months ended September 30, 2021, cash provided by financing activities was $222.7 million consisting of $121.8 million of net proceeds from the issuance of Series B shares, $102.8 million of net proceeds from our initial public, offering costs of $2.2million and $0.3 million of proceeds from issuance of shares to noncontrolling interest.

During the nine months ended September 30, 2020, cash provided by financing activities was $25.0 million consisting of net proceeds from the issuance of convertible loan notes.

Effect of exchange rates on cash and cash equivalents

During the nine months ended September 30, 2021 and 2020, the effect of foreign exchange on cash and cash equivalents was $6.8 million and $0.5 million respectively, primarily as a result of fluctuations between the U.S dollar and pound sterling exchange rates.

Future Funding Requirements

1 unchanged sentence

As a result, we are not yet profitable and have incurred losses in each period since our inception in 2016.

As of June 30, 2021, we had an accumulated deficit of $88.9 million.

As of September 30, 2021, we had an accumulated deficit of $93.5 million.

We expect to continue to incur significant losses for the foreseeable future.

18 unchanged sentences

We believe that we will continue to expend substantial resources for the foreseeable future in connection with the development of our current product candidates and programs as well as any future product candidates we may elect to pursue, as well as the gradual gaining of control over our required manufacturing capabilities and other corporate functions.

These expenditures will include costs associated with conducting preclinical studies and clinical trials, obtaining regulatory approvals, and potentially in-house manufacturing and supply, as well as marketing and selling any products approved for sale.

These expenditures will

include costs associated with conducting preclinical studies and clinical trials, obtaining regulatory approvals, and potentially in-house manufacturing and supply, as well as marketing and selling any products approved for sale.

In addition, other unanticipated costs may arise as outlined above.

19 unchanged sentences

As an emerging growth company, we may delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the closing of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our ADSs held by non-affiliates exceeded $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the closing of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our ADSs held by non-affiliates exceeded $700.0 million as of the prior September 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Off-Balance Sheet Arrangements

1 unchanged sentence

Recent Accounting Pronouncements

A description of recently issued accounting pronouncement that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

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

What changed 10-Q

Item 1. Financial Statements