What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-10 · 121 added, 175 removed, 267 unchanged (53% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

Current assets:

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95,334 and 103,289 shares issued and outstanding at

September 30, 2021 and December 31, 2020, respectively

March 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.001 par value;

150,000,000 shares authorized;

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

shares and 43,805,922 shares issued and outstanding at March 31, 2022 and

December 31, 2021, respectively

7 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Collaboration revenue

Three Months Ended March 31,

Operating expenses:

1 unchanged sentence

General and administrative

Acquired in-process research and development

Total operating expenses

2 unchanged sentences

Interest income

Gain on disposal of long-lived assets

Change in fair value of CVR liability

13 unchanged sentences

stock into common stock

Issuance of common stock to settle CVR liability

Issuance of common stock for services

Stock-based compensation expense

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

Issuance of common stock upon exercise of

stock options

Issuance of common stock under Employee

Stock Purchase Plan

Issuance of common stock upon exercise of

stock options

Stock-based compensation expense

Balances at September 30, 2021

Balances at March 31, 2022

Series A Non-Voting

2 unchanged sentences

Balances at December 31, 2020

Issuance of common stock upon

exercise of stock options

Issuance of common stock under

Employee Stock Purchase Plan

Issuance of common stock to LPC as

a commitment fee

Acquisition and retirement of

treasury stock

Conversion of Series A non-voting preferred

stock into common stock

Issuance of common stock to settle CVR liability

Issuance of common stock for services

Stock-based compensation expense

Balances at March 31, 2021

Issuance of common stock upon

exercise of stock options

Stock-based compensation expense

Balances at June 30, 2020

Issuance of common stock upon

exercise of stock options

Issuance of common stock under

Employee Stock Purchase Plan

Issuance of common stock upon

Issuance of common stock to LPC

Issuance of Series A non-voting

preferred stock and common stock

in connection with the Kiq

Issuance of Series A non-voting

preferred stock, net of issuance

costs of $ 5,493

Dividend payable to common

Stock-based compensation expense

Balances at September 30, 2020

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

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

2 unchanged sentences

Stock-based compensation expense

Noncash consideration received from a customer

Noncash portion of acquired in-process research and development

Gain on disposal of long-lived assets

Change in fair value of CVR liability

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

3 unchanged sentences

Operating lease liability

Deferred revenue

Net cash used in operating activities

1 unchanged sentence

Purchases of property and equipment

Proceeds from sale of property and equipment

Proceeds from sale of BOXR Platform assets

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of Series A non-voting convertible preferred stock, net of issuance costs of $ 5,493

Proceeds from issuance of common stock

Proceeds from issuance of common stock upon stock option exercises

Proceeds from issuance of stock from employee stock purchase plan

Proceeds from issuance of common stock upon stock option exercises

Payment to CVR Holders

Net cash (used in) provided by financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosure of cash flow information:

Right-of-use assets obtained in exchange for new operating lease liabilities

Supplemental disclosure of noncash investing and financing information:

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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.

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, initially targeting FGFR2 and ErbB2.

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.

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.

Under the terms of the Merger Agreement, at the closing of the Merger, the Company issued the securityholders of Kiq 1,558,975 shares of common stock and 44,687 shares of Series A Preferred Stock.

On July 9, 2020, the Company completed a Private Investment in Public Equity (“PIPE”) of 118,638 Series A Non-Voting Convertible Preferred Stock to new and existing investors in exchange for gross proceeds of $ 104.4 million, or net proceeds of $ 98.9 million, after deducting commissions and offering costs .

On August 28, 2020, the Company sold its assets, rights and interests relating to its Bolt-on Chimeric Receptor (“ BOXR”) technology and Autologous Cell Therapy Industrial Automation (“ACTIA”) technology (collectively, the “BOXR Platform”), to Sotio LLC (“Sotio”) (the “BOXR Platform Transaction”), pursuant to an asset purchase agreement by and among the Company, Sotio and Sotio NV as Guarantor (the “BOXR Platform Purchase Agreement”).

Pursuant to the BOXR Platform Purchase Agreement, Sotio has agreed to pay the Company total cash consideration of up to $ 11.5 million, consisting of an upfront payment of $ 8.1 on the Closing Date and potential milestone payments of up to $ 3.4 million in the aggregate upon the achievement of certain milestones related to the issuance of Specified Claims (as described in the BOXR Platform Purchase Agreement) by the U.S.

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 September 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.

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.

The net proceeds from the offering were approximately $ 107.7 million, after deducting the underwriting discounts and commissions of $ 6.9 million and offering expenses of $ 0.4 million.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, the impact of COVID-19, compliance with government regulations and the ability to secure additional capital to fund operations.

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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 $ 47.4 million for the nine months ended September 30, 2021.

As of September 30, 2021, the Company had an accumulated deficit of $ 246.1 million.

The Company has incurred recurring losses since inception, including a net loss of $ 30.6 million for the three months ended March 31, 2022.

As of March 31, 2022, the Company had an accumulated deficit of $ 301.6 million.

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

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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 assets or 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, 2021 was derived from audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited condensed consolidated financial statements as of September 30, 2021 and for the three and nine months ended September 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.

The accompanying unaudited condensed consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 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, 2021 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 September 30, 2021 and results of operations for the three and nine months ended September 30, 2021 and 2020 and cash flows for the nine months ended September 30, 2021 and 2020 have been made.

The Company’s results of operations for the three and nine months ended September 30, 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 March 31, 2022 and results of operations for the three months ended March 31, 2022 and 2021 and cash flows for the three months ended March 31, 2022 and 2021 have been made.

The Company’s results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for t he year ending December 31, 202 2 .

Principles of Consolidation

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The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.

Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, the valuation of the CVR liability and the valuation of stock-based awards.

Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses, the valuation of the CVR liability and the valuation of stock-based awards.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

1 unchanged sentence

Actual results may differ from those estimates or assumptions.

Risks and Uncertainties

Impact of the COVID-19 Coronavirus

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

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 pandemic concerns, and its ability to raise capital.

As of September 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

In December 2019, the FASB issued ASU 2019-12 Simplifying the Accounting for Income Taxes , which eliminates the need for an organization to analyze whether the following apply in a given period:

(1) exception to the incremental approach for intra-period tax allocation;

(2) exceptions to accounting for basis differences when there are ownership changes in foreign investments;

and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

The Company adopted ASU 2019-12 on January 1, 2021 .

The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity’s own equity.

The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity’s own equity.

This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021 and early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company is currently evaluating the impact that this standard will have on its condensed consolidated financial statements.

The Company adopted ASU 2020-06 on January 1, 2022 .

The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Fair Value of Financial Assets and Liabilities

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 September 30, 2021 Using:

The following tables present the Company’s fair value hierarchy for its financial assets and liabilities, which are measured at fair value on a recurring basis (in thousands) :

Fair Value Measurements at March 31, 2022 Using:

CVR Liability

1 unchanged sentence

Fair Value Measurements at December 31, 2021 Using:

Cash equivalents:

Money market funds

CVR Liability

Total Liabilities

Money market funds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

On July 6, 2020, the Company issued a non-transferrable CVR, which was distributed to stockholders of record as of the close of business on July 6, 2020, and prior to the issuance of any shares to acquire Kiq or sold to the PIPE investors.

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 July 6, 2020, the Company issued a non-transferrable contingent value right (“CVR”), which was distributed to stockholders of record as of the close of business on July 6, 2020, and prior to the issuance of any shares to acquire Kiq Bio LLC (“Kiq”) or sold to the Private Investment in Public Equity (“PIPE”) investors.

Holders of the CVR are entitled to receive common shares 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.

In accordance with the terms of the CVR agreement, the payment to CVR holders will be made in shares or cash, depending on the timing of the receipt of the sales proceeds by the Company.

For sales proceeds received by the Company prior to

December 31, 2020, CVR holders were entitled to receive payment in the form of common shares of the Company.

For sales proceeds received by the Company after December 31, 2020 and prior to July 2023, CVR holders are entitled to receive payment in cash.

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 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 .

The closing price of the Company’s common stock at each measurement date was used to determine the fair value of the share payments included in the CVR liability.

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 compon ent of Other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 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.

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 Bolt-on Chimeric Receptor (“BOXR”) technology and Autologous Cell Therapy Industrial Automation (“ACTIA”) technology (collectively, the “BOXR Platform, Antibody-Coupled T cell Receptor (“ACTR”) technology and other fixed assets based on assumptions at the date of the CVR issuance and each subsequent quarterly period end, less certain permitted deductions.

For sales proceeds received by the Company prior to December 31, 2020, the number of common shares to be received by CVR holders was determined by dividing the proceeds received by the Company by the closing price of the Company’s common stock on July 6, 2020 of $ 8.80 .

The closing price of the Company’s common stock at each measurement date through February 2021 was used to determine the fair value of the share payments included in the CVR liability.

The liability measured at the date of CVR 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.

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

On August 28, 2020, the Company sold the BOXR Platform and subsequently sold additional fixed assets, triggering a payment to CVR holders.

In November 2020, the Company issued 707,938 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 liability.

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

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

For the Nine Months

Ended September 30, 2021

Beginning balance

Fair value at CVR issuance

Balance at December 31, 2020

Change in fair value

CVR settlement

Ending balance

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

Balance at December 31, 2021

Change in fair value

CVR settlement

Balance at March 31, 2022

During the three months ended March 31, 2022 and 2021, there were no transfers between Level 1, Level 2 and Level 3 .

Accrued Expenses and Other Current Liabilities

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

September 30,

Accrued employee compensation and benefits

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Except as otherwise required by law, the Series A Preferred Stock does not have voting rights.

However, as long as any shares of Series A Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock, (b) alter or amend the Certificate of Designation, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (d) increase the number of authorized shares of Series A Preferred Stock, (e) prior to the stockholder approval of the Conversion Proposal or at any time while at least 40 % of the originally issued Series A Preferred Stock remains issued and outstanding, consummate a Fundamental Transaction (as defined in the Certificate of Designation)

or (f) enter into any agreement with respect to any of the foregoing.

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 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 September 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 September 30, 2021.

Cumulatively, through March 31, 2022, 67,991 shares of Series A Preferred Stock, or 41.6 % of the issued Series A Preferred Stock, have been converted into 16,997,750 shares of common stock.

The 95,334 shares of Series A Preferred Stock outstanding as of March 31, 2022 are convertible into 23,833,500 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, 2022.

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

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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 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 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.

The net proceeds from the offering were approximately $ 107.7 million, after deducting the underwriting discounts and commissions and offering expenses of $ 7.3 million.

On February 8, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC.

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The terms of any offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

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 September 30, 2021, no shares have been sold under the Sales Agreement.

Additionally, on February 8, 2021, pursuant to the Form S-3, the Company entered into a Sales Agreement (the “SVB 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.

Cumulatively, the Company has sold 3,954,900 shares of common stock under the SVB Sales Agreement with offering prices ranging between $ 9.25 and $ 10.30 per share for net proceeds of approximately $ 38.0 million.

No shares were sold under the SVB Sales Agreement in the three months ended March 31, 2022.

Stock-Based Compensation

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Additionally, the shares of common stock that remained available for issuance under the previously outstanding 2015 Stock Incentive Plan (the “2015 Plan”) became available under the 2018 Plan.

The number of shares reserved for the 2018 Plan automatically increases on each January 1 by 4 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or a lesser number of shares determined by the Company’s board of directors.

The shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2018 Plan or the 2015 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

The number of shares

reserved for the 2018 Plan automatically increase s on each January 1 by 4 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or a lesser number of shares determined by the Company’s board of directors.

The number of authorized shares reserved for issuance under the 2018 Plan was increased by 1,752,237 shares effective as of January 1, 2022.

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 nine months ended September 30, 2021, which were subject to stockholder approval of the amendment and restatement of the 2018 Plan.

As of September 30, 2021, 3,716,296 shares of common stock remain available for issuance under the 2018 Plan.

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 year ended December 31, 2021, which were subject to stockholder approval of the amendment and restatement of the 2018 Plan.

As of March 31, 2022, 1,518,076 shares of common stock remain available for issuance under the 2018 Plan.

Inducement Plan

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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 nine months ended September 30, 2021.

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

As of March 31, 2022, 728,995 shares of common stock remain available for issuance under the Inducement Plan.

2018 Employee Stock Purchase Plan

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The number of authorized shares reserved for issuance under the ESPP was increased by 125,000 shares effective as of January 1, 2022.

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

As of September 30, 2021, 336,919 shares remain available for issuance under the ESPP.

In January 2022, 18,995 shares were issued to employees under the ESPP.

As of March 31, 2022, 442,924 shares remain available for issuance 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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development expenses

General and administrative expenses

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 September 30, 2021, total unrecognized compensation cost related to the unvested stock-based options was $ 42.6 million, which is expected to be recognized over a weighted average period of 3.27 years.

As of March 31, 2022, total unrecognized compensation cost related to the unvested stock-based options was $ 54.6 million, which is expected to be recognized over a weighted average period of 3.19 years.

Commitments and Contingencies

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The Company leases office and laboratory space in Cambridge, MA for its corporate headquarters under a non-cancelable operating lease (the “Cambridge 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.

The Company 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 Cambridge Lease, 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 its 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.

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

Research Facility- Boulder, CO

On July 6, 2021, the Company entered into a lease agreement (the “Original Lease”) pursuant to which the Company leases approximately 38,075 square feet (the “Initial Premises”) in Boulder, CO, which will include office and laboratory space.

Subsequently, on March 29, 2022, the Company entered into the First Amendment to the lease agreement (the “First Amendment” and together with the Original Lease, the “Boulder Lease”) pursuant to which the Company leases approximately 6,582 square feet of additional office space on the second floor (the “Expansion Premises”).

The Company expects to incur net construction costs of $ 8.0 million to $ 10.0 million for the development of the Initial Premises at the Boulder location.

Per the terms of the Original Lease, the landlord will contribute an aggregate of approximately $ 6.9 million toward the cost of landlord assets (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 Boulder Lease term.

Additionally, under the terms of the First Amendment, the landlord will provide an additional tenant improvement allowance (the “Additional Allowance”) of $ 0.6 million, of which $ 0.3 million will be used in the Initial Premises toward the cost of landlord assets.

The remaining $ 0.3 million additional allowance is to be used for work to be performed in the Expansion Premises for the construction of lessee assets.

The Boulder Lease has an initial term of 12 years with the option to extend for three successive five-year terms.

Boulder Lease payments will begin in June 2023 after an initial free rent period.

Rent will be payable in equal monthly installments and subject to 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.

The Boulder Lease is an operating lease.

In connection with the Boulder Lease, the Company provided a cash security deposit to the landlord in an amount of $ 0.7 million which is recorded in Other Assets in the condensed consolidated balance sheet as of March 31, 2022.

The lease commencement date occurred for a portion of the Expansion Premises in March 2022 as the Company gained access to the space under the terms of the lease.

The Company has recorded the right-of-use asset and lease liability for this lease component of $ 1.1 million as of the lease commencement date.

As of March 31, 2022, the Company has determined that it does not have control of the Initial Premises, as defined in ASC 842, during the construction period and as such, the accounting lease commencement date has not occurred as of March 31, 2022 and the Company will not record a right-of-use asset or lease liability for the Initial Premises until the accounting lease commencement date which is expected to be in the second quarter of 2022.

The Company has determined the cost of Improvements during the construction period are lessor assets and considered a prepayment of lease under ASC 842.

The Company has paid $ 1.1 million towards the construction of lessor assets, which is included in Other Assets in the condensed consolidated balance sheet as of March 31, 2022.

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

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Operating lease cost

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lease liabilities

Remaining lease term

Discount rate

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

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

Weighted average remaining lease term

Weighted average discount rate

The variable lease costs for the three months ended March 31, 2022 include common area maintenance and other operating charges.

Future minimum lease payments under the Cambridge and Boulder operating leases commenced as of March 31, 2022 are as follows (in thousands):

Year Ending December 31,

2022 (remaining 9 months)

Total future minimum lease payments

imputed interest

tenant improvement allowance receivable

Total operating lease liability

Included in the consolidated balance sheet:

Included in the condensed consolidated balance sheet:

Current operating lease liability

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This has been excluded from the undiscounted cash flows above.

Boulder Lease

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

The landlord will contribute an aggregate of approximately $ 6.9 million toward the cost of landlord assets (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 Boulder Lease term.

Boulder Lease payments will begin 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 Boulder Lease term of 12 years.

The Company also has the option to extend the Boulder 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.

The Company has determined this is a lease under ASC 842.

The Company gained access to the leased space on August 14, 2021, to commence construction of the Improvements.

As of September 30, 2021, the Company has determined that it does not have control of the space, as defined in ASC 842, during the construction period and as such, the accounting lease commencement date has not occurred for the Boulder Lease as of September 30, 2021.

Therefore, the Company will not record a right-of-use asset or lease liability for the Boulder Lease until the accounting lease commencement date which is expected to be in 2022.

The Company has determined the cost of Improvements during the construction period are lessor assets and considered a prepayment of lease under ASC 842.

The Company has paid $ 0.9 million towards the construction of lessor assets, which is included in Other Assets in the condensed consolidated balance sheet as of September 30, 2021.

License Agreements

Plexxikon License Agreement

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.

In April 2022, as a result of the Company’s review of the progression of the Peak study and discussions with Plexxikon, the first milestone clinical milestone was deemed to have been achieved, triggering payment of $ 2.5 million to Plexxikon in Q2 2022.

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.

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.

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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 September 30, 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 March 31, 2022 or its consolidated financial statements as of December 31, 2021.

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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net loss attributable to common stockholders

3 unchanged sentences

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated above because including them would have had an anti-dilutive effect:

September 30,

Stock options to purchase common stock

4 unchanged sentences

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 September 30, 2021 and $ 0.3 million for the nine months ended September 30, 2021.

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

Contributions under the plan were approximately $ 0.1 million for the three months ended March 31, 2022 and 2021, respectively.

Subsequent Events

Waltham lease agreement

On March 19, 2022, the Company and Cimpress USA Incorporated (the “Cimpress”) entered into a sublease agreement (the “Waltham Sublease”) pursuant to which the Company will sublease approximately 17,749 square feet of office space in Waltham, MA (the “Subleased Space”).

The Waltham Sublease became effective on May 5, 2022, upon receiving landlord consent.

The Waltham Sublease has a term of four years and four months , commencing June 1, 2022 and expiring September 30, 2026 .

The Company will pay Cimpress base rent at an initial rate of $ 42.50 per square foot per year.

Rent will be payable in equal monthly installments and subject to $ 1.00 per square foot annual increases over the term.

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

Registration on Form S-3 and ATM Sales Agreement

On May 6, 2022, the Company filed a shelf registration statement on Form S-3 with the SEC.

The shelf registration statement allows the Company to sell from time-to-time up to $ 300 million of common stock, preferred stock, debt securities, warrants or units comprised of any combination of these securities, for its own account in one or more offerings.

Additionally, on May 6, 2022, pursuant to the Form S-3, the Company entered into a Sales Agreement (the “Sales Agreement”) with Guggenheim Securities, LLC (“Guggenheim Securities”), 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 million through Guggenheim Securities as the sales agent.

On May 6, 2022, the Company filed an Amendment to its February 8, 2021 S-3 Registration Statement to terminate the effectiveness of the registration statement and to remove from registration all securities registered but not sold under the registration statement.

The Company terminated the existing SVB Sales Agreement, effective as of May 5, 2022.

The Company will no t incur any termination penalties as a result of the termination of the SVB Sales Agreement.

No further sales will be made pursuant to the SVB Sales Agreement.

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