What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-12 · 105 added, 109 removed, 305 unchanged (41% of the section changed)

26 unchanged sentences

Series A non-voting convertible preferred stock, $ 0.001 par value;

1,000,000 shares

113,835 and 132,244 shares issued and outstanding at March 31,

2021 and December 31, 2020, respectively

shares authorized;

103,289 and 132,244 shares issued and outstanding at

June 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value;

150,000,000 shares authorized;

shares and 32,347,905 shares issued and outstanding at March 31, 2021 and

shares and 32,347,905 shares issued and outstanding at June 30, 2021 and

December 31, 2020, respectively

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(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Collaboration revenue

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Net loss and comprehensive loss

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

Net loss per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted

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Balances at March 31, 2021

Conversion of Series A non-voting preferred

stock into common stock

Stock-based compensation expense

Balances at June 30, 2021

Series A Non-Voting

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Balances at March 31, 2020

Issuance of common stock upon exercise of

stock options

Stock-based compensation expense

Balances at June 30, 2020

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

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Net cash used in operating activities

Cash flows from investing activities:

Purchases of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

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Cogent’s approach is to design rational precision therapies that treat the underlying cause of disease and improve the lives of patients.

Cogent’s most advanced program is CGT9486, a selective tyrosine kinase inhibitor designed to potently inhibit the KIT D816V mutation as well as other mutations in KIT exon 17.

Cogent’s most advanced program is bezuclastinib, also known as CGT9486, a highly selective tyrosine kinase inhibitor designed to potently inhibit the KIT D816V mutation as well as other mutations in KIT exon 17.

In the vast majority of cases, KIT D816V is responsible for driving Systemic Mastocytosis (“SM”), a serious disease caused by unchecked proliferation of mast cells.

Exon 17 mutations are also found in patients with advanced gastrointestinal stromal tumors (“GIST”), a type of cancer with strong dependence on oncogenic KIT signaling.

CGT9486 is a highly selective and potent KIT inhibitor with the potential to provide a new treatment option for these patient populations.

Bezuclastinib is a highly selective and potent KIT inhibitor with the potential to provide a new treatment option for these patient populations.

In addition to bezuclastinib, the Company’s research team is developing a portfolio of novel targeted therapies to help patients fighting serious, genetically driven diseases.

The Company was incorporated in March 2014 under the laws of the State of Delaware.

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In connection with the name change, the Company’s common stock began trading under the ticker symbol “COGT” and the new CUSIP for the Company’s common stock is 19240Q 201.

As announced on March 2, 2020, the Company initiated a reduction in force that resulted in the termination of approximately 60% of the Company’s employee workforce, or 43 employees.

These reductions were substantially completed by the end of first quarter of 2020 and all were completed by the end of 2020.

The reduction in force was approved in connection with the Company’s restructuring plans to prioritize resources towards advancing its legacy preclinical program.

On July 6, 2020, the Company completed its asset acquisition of Kiq Bio LLC (“Kiq”) (the “Kiq Acquisition”), in accordance with the terms of the Agreement and Plan of Merger (the “Merger Agreement”), signed and closed on July 6, 2020.

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Patent and Trademark Office and the European Patent Office.

No amounts related to the potential future milestone payments to be received from Sotio have been recognized as of March 31, 2021.

No amounts related to the potential future milestone payments to be received from Sotio have been recognized as of June 30, 2021.

On December 4, 2020, the Company completed an underwritten public offering of 11,794,872 shares of its common stock at a public offering price of $ 9.75 per share.

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These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.

The Company has incurred recurring losses since inception, including a net loss of $11.7 million for the three months ended March 31, 2021.

As of March 31, 2021, the Company had an accumulated deficit of $210.4 million.

The Company has incurred recurring losses since inception, including a net loss of $ 28.3 million for the six months ended June 30, 2021.

As of June 30, 2021, the Company had an accumulated deficit of $ 227.0 million.

The Company expects to continue to generate operating losses in the foreseeable future.

As of the issuance date of the interim condensed consolidated financial statements, the Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from issuance of the condensed consolidated financial statements.

The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

The Company expects that it will continue to incur significant expenses in connection with its ongoing business activities.

The Company will need to seek additional funding through equity offerings, debt financings, collaborations, licensing arrangements and other marketing and distribution arrangements, partnerships, joint ventures, combinations or divestitures of one or more of its businesses.

The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborative arrangements or divest its assets.

The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter

into collaborative arrangements or divest its assets.

The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders.

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The consolidated balance sheet at December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited condensed consolidated financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

The accompanying unaudited condensed consolidated financial statements as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of March 31, 2021 and results of operations for the three months ended March 31, 2021 and 2020 and cash flows for the three months ended March 31, 2021 and 2020 have been made.

The Company’s results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of June 30, 2021 and results of operations for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020 have been made.

The Company’s results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

Principles of Consolidation

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The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic.

The virus continues to spread globally, has been declared a pandemic by the World Health Organization and has spread to over 100 countries, including the United States.

The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

The impact of the pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

The spread of COVID-19 has caused the Company to modify its business practices, including implementing a work-from-home policy for all employees who are able to perform their duties remotely and restricting all nonessential travel, and it expects to continue to take actions as may be required or recommended by government authorities or as the Company determines are in the best interests of its employees, the patients it serves and other business partners in light of COVID-19.

Potential impacts to the Company’s business include temporary closures of its facilities or those of its vendors, disruptions or restrictions on its employees’ ability to travel, disruptions to or delays in ongoing laboratory experiments and operations, the potential diversion of healthcare resources away from

the conduct of clinical trials to focus on pandemi c concerns, and its ability to raise capital.

As of March 31, 2021 , there have been no material impacts to the Company.

As the impacts of COVID-19 continue to unfold , the Company will contin ually assess the impacts, as the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity or results of operations in the future is uncertain .

As of June 30, 2021, there have been no material impacts to the Company.

As the impact of COVID-19 continues to unfold, the Company will make continual assessments of the situation, as the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity or results of operations in the future is uncertain.

Recently Adopted Accounting Pronouncements

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The following tables present information about the Company’s assets that are measured at fair value on a recurring basis (in thousands) :

Fair Value Measurements at March 31, 2021 Using:

Cash equivalents:

Money market funds

Fair Value Measurements at June 30, 2021 Using:

CVR Liability

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Holders of the CVR are entitled to receive certain stock and/or cash payments from proceeds received by the Company, if any, related to the disposition of its legacy cell therapy assets for a period of three years from July 2020.

On August 28, 2020, the Company sold the BOXR Platform

and subsequently sold additional fixed assets , triggering the CVR payment and, per the terms of the CVR agreement , the payment will be made in shares or cash, depending on the timing of cash receipt .

On August 28, 2020, the Company sold the BOXR Platform and subsequently sold additional fixed assets, triggering the CVR payment and, per the terms of the CVR agreement, the payment will be made in shares or cash, depending on the timing of cash receipt.

The Company classifies the CVR as a liability on its condensed consolidated balance sheet.

The fair value of the CVR liability was determined using the probability weighted discounted cash flow method to estimate future cash flows associated with the sale of the legacy cell therapy assets, including the BOXR platform, ACTR platform and other fixed assets based on assumptions at the date of the CVR issuance and as of December 31, 2020, less certain permitted deductions.

The fair value of the CVR liability was determined using the probability weighted discounted cash flow method to estimate future cash flows associated with the sale of the legacy cell therapy assets, including the BOXR platform, ACTR platform and other fixed assets based on assumptions at the date of the CVR issuance and each subsequent quarterly period end, less certain permitted deductions.

The number of common shares is determined by dividing the proceeds by the closing price of the Company’s stock on July 6, 2020 of $ 8.80 .

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The liability measured at the date of issuance was recorded as a common stock dividend, returning capital to the legacy stockholders of record as of the close of business on July 6, 2020.

Changes in fair value of the liability are recognized as a component of Other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the three month period ended March 31, 2021.

The liability was valued based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

Changes in fair value of the liability

are recognized as a compon ent of Other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2021 .

The liability was valued based on significant inputs not observable in the market, which represents a Level 3 measurement wi thin the fair value hierarchy.

In November 2020, the Company issued 707,938 CVR shares of common stock in partial settlement of the CVR liability.

In February 2021, the Company issued an additional 212,429 shares of common stock and paid $ 0.1 million in partial settlement of the CVR.

At March 31, 2020, the Company had no financial liabilities outstanding measured at fair value.

Any settlement of the remaining CVR liability will be a cash settlement.

At June 30, 2020, the Company had no financial liabilities outstanding measured at fair value.

The following table sets forth a summary of the changes in the fair value of the Company’s CVR liability:

For the Three Months

Ended March 31, 2021

For the Six Months

Ended June 30, 2021

Beginning balance

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Ending balance

During the three months ended March 31, 2021 and 2020, there were no transfers between Level 1, Level 2 and Level 3.

During the three and six months ended June 30, 2021 and 2020, there were no transfers between Level 1, Level 2 and Level 3 .

Accrued Expenses and Other Current Liabilities

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Accrued external manufacturing costs

Collaboration Agreement

In June 2015, the Company entered into a Collaboration Agreement with Seagen Inc., formerly Seattle Genetics, (“Seagen”) (the “Collaboration Agreement”).

Pursuant to the terms of the Collaboration Agreement, the Company and Seagen agreed to jointly develop two product candidates incorporating our ACTR platform and Seagen’s antibodies.

On January 16, 2020, the Company and Seagen announced that they entered into an agreement to terminate the Collaboration Agreement (the “Termination Agreement”) effective as of January 16, 2020 (the “Termination Effective Date”), pursuant to which the Parties will cease all research, development, manufacturing and other exploitations of any and all research candidates and development candidates under the Collaboration Agreement, including, without limitation, the development candidate ACTR-BCMA and a research candidate.

Pursuant to terms of the Termination Agreement, among other things, (i) Seagen paid the Company $5.75 million, (ii) Seagen surrendered, assigned and transferred to the Company all of its right, title and interest in the 207,961 shares of the Company’s common stock owned by Seagen, (iii) the Company will continue to pay all expenses for the wind-down of the ACTR-BCMA trial and (iv) Seagen paid all research and development costs incurred through the Termination Effective Date.

In addition, the exclusivity

provisions in the Collaboration Agreement terminate and each party will be free to research, develop and commercialize its individual intellectual property either by themselves or with third parties, subject to the intellectual property rights of the other party.

During the three months ended March 31, 2020, the Company adjusted the transaction price to include the Termination Payment of $5.75 million as well as the aggregate fair value of $0.8 million as of January 16, 2020 of the 207,961 shares of common stock received.

The aggregate fair value of common stock received has been included as a noncash adjustment to reconcile net loss to net cash used in operating activities within the consolidated statement of cash flows.

Under the Collaboration Agreement and Termination Agreement, the Company recognized revenue of $7.0 million for the three months ended March 31, 2020.

All performance obligations were completed and all remaining revenue was recognized under the Collaboration Agreement and Termination Agreement in 2020.

Preferred Stock, Series A Non-Voting Convertible Preferred Stock and Common Stock

Our authorized capital stock consists of 150,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share, 1,000,000 of which are designated as Series A Preferred Stock and 9,000,000 of which shares of preferred stock are undesignated.

The Company’s authorized capital stock consists of 150,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share, 1,000,000 of which are designated as Series A Preferred Stock and 9,000,000 of which shares of preferred stock are undesignated.

Series A Non-Voting Convertible Preferred Stock

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The Series A Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Each share of Series A Preferred Stock is convertible into shares of common stock at any time at the option of the holder thereof, into 250 shares of common stock, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

Cumulatively, through March 31, 2021, 49,490 shares of Series A Preferred Stock, or 30.3% of the issued Series A Preferred Stock, have been converted to 12,372,500 shares of common stock.

Subsequent to March 31, 2021, an additional 4,864 shares of Series A Preferred stock have been converted to 1,216,000 shares of common stock.

No other classes of preferred stock have been designated and no other preferred shares have been issued or are outstanding as of March 31, 2021.

Each share of Series A Preferred Stock is convertible at any time at the option of the holder thereof, into 250 shares of common stock, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9 % and 19.9 %) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

Cumulatively, through June 30, 2021, 60,036 shares of Series A Preferred Stock, or 36.8 % of the issued Series A Preferred Stock, have been converted into 15,009,000 shares of common stock.

No other classes of preferred stock have been designated and no other preferred shares have been issued or are outstanding as of June 30, 2021.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

Common stockholders are not entitled to receive dividends, unless declared by the board of directors.

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock.

In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock.

The shares to be issued by us in this offering will be, when issued and paid for, validly issued, fully paid and non-assessable.

On March 19, 2020, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company may elect to sell to LPC up to $25,000,000 in shares of its common stock, subject to certain limitations and conditions set forth in the Purchase Agreement.

Pursuant to the Purchase Agreement, the Company issued 181,595 shares of common stock to LPC as a commitment fee.

In 2020, 2,412,870 registered common shares were sold to LPC

under the Purchase Agreement for proceeds of $ 25.0 million.

No additional shares may be or have been sold to LPC under the LPC Purchase Agreement.

On September 22, 2020, the Company filed a registration statement on Form S-3 for the registration of (i) 1,558,975 shares of common stock issued in the acquisition of Kiq, (ii) 11,171,750 shares of common stock issuable upon the conversion of 44,687 shares of the Series A Preferred Stock issued in the acquisition of Kiq and (iii) 29,659,500 shares of common stock issuable upon the conversion of 118,638 shares of the Series A Preferred Stock issued in the PIPE, for a total of 42,390,225 shares of common stock.

On December 4, 2020, the Company completed an underwritten public offering of 11,794,872 shares of our common stock at a public offering price of $9.75 per share.

On December 4, 2020, the Company completed an underwritten public offering of 11,794,872 shares of its common stock at a public offering price of $ 9.75 per share.

This included the exercise in full by the underwriters of their 30-day option to purchase up to 1,538,461 additional shares of common stock.

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Additionally, on February 8, 2021, pursuant to the Form S-3, the Company entered into a Sales Agreement (the “Sales Agreement”) with SVB Leerink LLC (“SVB Leerink”), pursuant to which the Company may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 75.0 million through SVB Leerink as the sales agent.

As of March 31, 2021, no shares have been sold under the Sales Agreement.

As of June 30, 2021, no shares have been sold under the Sales Agreement.

Stock-Based Compensation

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The number of authorized shares reserved for issuance under the 2018 Plan was increased by 1,293,916 shares effective as of January 1, 2021.

On April 21, 2021, the board of directors approved the amendment and restatement of the 2018 Plan to increase the number of shares of common stock issuable under the 2018 Plan, subject to stockholder approval at the 2021 annual stockholder meeting.

During the three months ended March 31, 2021, the board of directors approved grants of 2,880,867 options to employees and non-employee directors, of which, 2,782,918 are subject to stockholder approval at the Company’s 2021 annual stockholder meeting.

The options have exercise prices ranging from $7.96 to $12.30, which was the closing price of the Company’s common stock on the dates of grant.

The options subject to stockholder approval are not exercisable until such approval is obtained.

As no grant date has been established for accounting purposes in accordance with ASC 718 Compensation-Stock Compensation, no stock compensation expense has been recorded for the options subject to stockholder approval.

On June 16, 2021, at the Company’s 2021 annual stockholder meeting, the Company’s stockholders approved the amendment and restatement of the 2018 Stock Plan to increase the number of shares of common stock issuable under the 2018 Plan by 6,000,000 shares.

Upon stockholder approval, in accordance with ASC 718- Compensation- Stock Compensation , a grant date was established for accounting purposes with respect to 3,402,768 options previously granted to employees and non-employee directors during the six months ended June 30, 2021, which were subject to stockholder approval of the amendment and restatement of the 2018 Plan.

As of June 30, 2021, 4,137,224 shares of common stock remain available for issuance under the 2018 Plan.

Inducement Plan

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2020 Inducement Plan (the “Inducement Plan”).

The board of directors also adopted a form of a form of non-qualified stock option agreement for use with the Inducement Plan.

A total of 3,750,000 shares of common stock of Cogent have been reserved for issuance under the Inducement Plan, subject to adjustment for stock dividends, stock splits, or other changes in Cogent’s common stock or capital structure.

On November 5, 2020, the Company filed a Registration on Form S-8 related to the 3,750,000 shares of its common stock to be issued pursuant to the Inducement Plan.

The Company has issued 2,885,605 options under the inducement plan, of which 1,025,000 were granted in the three months ended March 31, 2021, with exercise prices ranging from $8.78 to $11.16, which was the closing price of the Company’s common stock on the date of grant.

As of March 31, 2021, 864,395 shares remain available for issuance.

Subsequent to March 31, 2021, the Company issued an additional 135,400 options under the Inducement Plan.

The board of directors also adopted a form of non-qualified stock option agreement for use with the Inducement Plan.

A total of 3,750,000 shares of common stock have been reserved for issuance under the Inducement Plan, subject to adjustment for stock dividends, stock splits, or other changes in Cogent’s common stock or capital structure.

On November 5, 2020, the Company filed a Registration on Form S-8 related to the 3,750,000 shares of its common stock reserved for issuance under the Inducement Plan.

The Company has granted 3,021,005 options under the Inducement Plan, of which 1,160,400 were granted during the six months ended June 30, 2021.

As of June 30, 2021, 728,995 shares of common stock remain available for issuance under the Inducement Plan.

2018 Employee Stock Purchase Plan

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The first six month offering period was initiated on July 1, 2019.

As of March 31, 2021, 332,757 shares remain available for future issuance.

As of June 30, 2021, 341,416 shares remain available for issuance under the ESPP.

In July 2021, 4,497 shares were issued to employees under the ESPP.

Stock-Based Compensation

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands) :

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development expenses

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As a result, the exercise price was determined to be $ 1.68 , the fair value of the Company’s closing stock price on the grant date.

No other terms of the exchanged stock options were modified, and the stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates.

No other terms of the exchanged stock options were modified, and the stock options continued to vest according to their original vesting schedules and retained their original expiration dates.

The Company accounted for the exchange offer as an option modification and as a result, recorded $ 0.2 million in incremental stock-based compensation expense during the year ended December 31, 2020.

On July 6, 2020, all then outstanding stock options became fully vested in connection with the Kiq Acquisition, resulting in acceleration of stock compensation expense of $ 2.9 million, which was recognized in the year ended December 31, 2020.

As of March 31, 2021, total unrecognized compensation cost related to the unvested stock-based options, excluding options subject to stockholder approval, was $24.5 million, which is expected to be recognized over a weighted average period of 3.55 years.

As of June 30, 2021, total unrecognized compensation cost related to the unvested stock-based options was $ 43.7 million, which is expected to be recognized over a weighted average period of 3.50 years.

Commitments and Contingencies

Operating Leases

The Company leases office and laboratory space under a non-cancelable operating lease that expires in April 2023 with the Company’s option to extend for an additional five-year term.

The Company leases office and laboratory space in Cambridge, MA under a non-cancelable operating lease that expires in April 2023 with the Company’s option to extend for an additional five-year term.

The lessee has the right to terminate the lease in the event of the inability to use the space due to substantial damage while the lessor has the right to terminate the lease for tenant’s default of lease financial obligations.

Per the terms of the lease agreement, the Company does not have any residual value guarantees.

This extension has not been considered in the determination of the lease liability as the Company is not obligated to exercise their option and it is not reasonably certain that the option will be exercised.

This extension has not been considered in the determination of the lease liability as the Company is not obligated to exercise its option and it is not

reasonably certain that the option will be exercised.

The lease payments include fixed lease payments that escalate over the term of the lease on an annual basis.

The Company’s real estate lease in Cambridge is a net lease, as the non-lease components (i.e.

The Company’s real estate lease is a net lease, as the non-lease components ( i.e.

common area maintenance) are paid separately from rent based on actual costs incurred.

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The Company increased the right-of-use asset and operating lease liabilities by $ 0.9 million, respectively.

Concurrent with the lease amendment and the BOXR sale, the Company entered into a sublease for the remaining term of the lease.

Under the terms of the sublease agreement, the sublessee will lease approximately 70 % of the facility and will be responsible for the corresponding percentage of operating lease c osts and variable lease costs.

Concurrent with the lease amendment and the BOXR sale, the Company entered into a sublease for a significant portion of the leased premises for the remaining term of the lease.

Under the terms of the sublease agreement, the sublessee leased approximately 70 % of the facility and is responsible for the corresponding percentage of operating lease costs and variable lease costs.

Variable lease costs include common area maintenance and other operating charges.

The elements of the lease expense, net of sublease income, were as follows (in thousands):

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Operating lease cost

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Discount rate

The variable lease costs for the three months ended March 31, 2021 include common area maintenance and other operating charges.

Future minimum lease payments under the operating lease as of March 31, 2021 are as follows (in thousands):

The variable lease costs for the six months ended June 30, 2021 include common area maintenance and other operating charges.

Future minimum lease payments under the operating lease as of June 30, 2021 are as follows (in thousands):

Year Ending December 31,

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Total operating lease liability

Under the terms of the lease, the Company obtained a $1.3 million letter of credit as collateral for its leased facility.

Under the terms of the lease, the Company issued a $ 1.3 million letter of credit to the landlord as collateral for the leased facility.

The underlying cash collateralizing this letter of credit has been classified as non-current restricted cash in the accompanying condensed consolidated balance sheets.

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Plexxikon License Agreement

In July 2020, with the closing of the Kiq Acquisition, the Company obtained an exclusive, sublicensable, worldwide license (the “License Agreement”) to certain patents and other intellectual property rights to research, develop and commercialize CGT9486 and CGT0206.

As initial consideration for the license, Kiq directly paid Plexxikon Inc.

an upfront payment of $1.0 million in cash, which was paid prior to the closing of the Kiq Acquisition.

Under the terms of the License Agreement, the Company is required to pay Plexxikon aggregate payments of up to $7.5 million upon the satisfaction of certain clinical milestones and up to $25 million upon the satisfaction of certain regulatory milestones.

The Company is also required to pay Plexxikon Inc.

tiered royalties ranging from a low-single digit percentage to a high-single digit percentage on annual net sales of products.

These royalty obligations last on a product-by-product basis and country-by-country basis until the latest of (i) the date on which there is no validate claim of a licensed Plexxikon Inc.

patent covering a subject product in

such country or (ii) the 10 th anniversary of the date of the first commercial sale of the product in such country.

In addition, if the Company sublicenses the rights under the License Agreement, the Company is required to pay a certain percentage of the sublicense revenue to Plexxikon Inc .

ranging from mid-double digit percentages to mid-single digit percentages, depending on whether the sublicense is entered into prior to or after certain clinical trial events.

In July 2020, the Company obtained an exclusive, sublicensable, worldwide license (the “License Agreement”) to certain patents and other intellectual property rights to research, develop and commercialize bezuclastinib and CGT0206.

Under the terms of the License Agreement, the Company is required to pay Plexxikon Inc.

(“Plexxikon”) aggregate payments of up to $ 7.5 million upon the satisfaction of certain clinical milestones and up to $ 25.0 million upon the satisfaction of certain regulatory milestones.

The Company is also required to pay Plexxikon tiered royalties ranging from a low-single digit percentage to a high-single digit percentage on annual net sales of products.

These royalty obligations last on a product-by-product basis and country-by-country basis until the latest of (i) the date on which there is no validate claim of a licensed Plexxikon patent covering a subject product in such country or (ii) the 10 th anniversary of the date of the first commercial sale of the product in such country.

In addition, if the Company sublicenses the rights under the License Agreement, the Company is required to pay a certain percentage of the sublicense revenue to Plexxikon ranging from mid-double digit percentages to mid-single digit percentages, depending on whether the sublicense is entered into prior to or after certain clinical trial events.

The license agreement will expire on a country-by-country and licensed product-by-licensed product basis until the later of the last to expire of the patents covering such licensed products or services or the 10-year anniversary of the date of first commercial sale of the licensed product in such country.

The Licensors may terminate the license agreement within 30 days after written notice in the event of a breach of contract.

The Licensors may also terminate the agreement upon written notice in the event of the Company’s bankruptcy, liquidation or insolvency.

In addition, the Company has the right to terminate this agreement in its entirety at will upon 90 days’ advance written notice to Plexxikon Inc.

The Company may terminate the license agreement within 30 days after written notice in the event of a material breach.

The Company may also terminate the agreement upon written notice in the event of the Company’s bankruptcy, liquidation or insolvency.

In addition, the Company has the right to terminate this agreement in its entirety at will upon 90 days’ advance written notice to Plexxikon.

Indemnification Agreements

3 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements that will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2021 or its consolidated financial statements as of December 31, 2020.

The Company is not aware of any claims under indemnification arrangements that will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of June 30, 2021 or its consolidated financial statements as of December 31, 2020.

Legal Proceedings

4 unchanged sentences

Basic and diluted net loss per common share was calculated as follows (in thousands, except share and per share amounts) :

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net loss attributable to common stockholders

6 unchanged sentences

Unvested restricted common stock units

The stock options include only those options considered to be outstanding and not subject to stockholder approval.

However, the inclusion of options subject to stockholder approval would increase the potential common shares.

Retirement Plan

1 unchanged sentence

The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis.

The Company may provide discretionary matching contributions of 100% of the first 4% of elective contributions, which vest immediately.

Contributions under the plan were approximately $0.1 million for the three months ended March 31, 2021.

The Company did not make any matching contributions during the three months ended March 31, 2020.

The 401(k) Plan allows for discretionary matching contributions of 100 % of the first 4 % of elective contributions, which vest immediately.

Contributions under the plan were approximately $ 0.1 million for the three months ended June 30, 2021 and $ 0.2 million for the six months ended June 30, 2021.

The Company did no t make any matching contributions during the three and six months ended June 30, 2020.

Subsequent Events

On July 6, 2021, the Company and BCSP Pearl East Property LLC (the “Landlord”) entered into a lease agreement (the “Lease”) pursuant to which the Company will lease approximately 38,075 square feet of office and laboratory space at 4840 Pearl East Circle, Boulder, Colorado (the “Leased Space”).

Pursuant to the terms of the Lease, the Company will take possession of the Leased Space on or around August 15, 2021 to commence construction and tenant improvements (collectively, “Improvements”).

The Landlord will contribute an aggregate of approximately $ 6.9 million toward the cost of the Improvements, as well as an additional amount of up to approximately $ 2.3 million in the form of a tenant improvement loan at an annual interest rate of 6 %.

Any monies borrowed under the tenant improvement loan are required to be repaid over the Lease term.

The Lease will commence upon the earlier of (i) substantial completion of the Improvements or (ii) May 1, 2022.

The Company will be entitled to 14 months of free rent, followed by an initial Lease term of 12 years.

The Company also has the option to extend the Lease for three successive five-year terms.

Upon the commencement of its obligation to pay rent, the Company will pay the Landlord base rent at an initial rate of $ 40.00 per square foot per year.

Rent will be payable in equal monthly installments and subject to 2.5 % annual increases over the term.

Additionally, the Company is responsible for reimbursing the Landlord for its share of the building’s property taxes and operating expenses.

In connection with the Lease, the Company provided a cash security deposit to the Landlord in an amount of $ 0.7 million.

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