What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-01 · 72 added, 118 removed, 412 unchanged (32% of the section changed)

19 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

19 unchanged sentences

$ 0.0001 par value;

10,000,000 shares authorized at September 30, 2021 and December 31, 2020;

0 shares issued and outstanding at September 30, 2021 and December 31, 2020

10,000,000 shares authorized at March 31, 2022 and December 31, 2021;

0 shares issued and outstanding at March 31, 2022 and December 31, 2021

Common stock:

$ 0.0001 par value;

290,000,000 shares authorized at September 30, 2021 and December 31, 2020;

46,546,915 and 28,372,634 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

290,000,000 shares authorized at March 31, 2022 and December 31, 2021;

46,553,511 and 46,553,511 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

6 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

16 unchanged sentences

(in thousands, except share data)

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Comprehensive

2 unchanged sentences

Stock-based compensation expense

Unrealized gain on marketable securities

Issuance of common stock in connection with at-the-market offering, net

Issuance of common stock upon follow-on public offering, net

Balance at March 31, 2021

Stock-based compensation expense

Unrealized gain on marketable securities

Foreign currency translation adjustment

Issuance of common stock in connection with at-the-market offering, net

Balance at June 30, 2021

Issuance of common stock upon exercise of Exchange Warrants

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized loss on marketable securities

Foreign currency translation adjustment

Issuance of common stock in connection with at-the-market offering, net

Balance at September 30, 2021

Nine Months Ended September 30, 2020

Balance at March 31, 2022

Three Months Ended March 31, 2021

Comprehensive

3 unchanged sentences

Unrealized gain on marketable securities

Issuance of common stock in connection with at-the-market offering, net

Issuance of common stock upon follow-on public offering, net

Balance at March 31, 2021

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized gain on marketable securities

Balance at June 30, 2020

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized loss on marketable securities

Balance 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

17 unchanged sentences

Purchases of property and equipment

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities

Proceeds from issuance of common stock, net (includes $ 4,850 in aggregate gross proceeds from related parties for the nine months ended September 30, 2021)

Proceeds from issuance of common stock, net (includes $ 4,850 in aggregate gross proceeds from related parties for the three months ended March 31, 2021)

Proceeds from issuance of common stock in connection with at-the-market offering, net

Proceeds from exercise of common stock options

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

31 unchanged sentences

The Company does not expect its existing capital resources to be sufficient to enable it to fund the completion of its clinical trials and remaining development program of mupadolimab, CPI-818 and ciforadenant through commercialization.

In addition, its operating plan may change as a result of many factors, including those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 25, 2021.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 257.1 million as of September 30, 2021.

In addition, its operating plan may change as a result of many factors, including those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 10, 2022 and this Quarterly Report on form 10-Q.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 274.7 million as of March 31, 2022.

The Company has historically financed its operations primarily through the sale of redeemable convertible preferred stock and common stock.

1 unchanged sentence

Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of September 30, 2021, the Company had cash, cash equivalents and short-term marketable securities of $ 76.3 million.

As of March 31, 2022, the Company had cash, cash equivalents and short-term marketable securities of $ 62.9 million.

Management believes that the Company’s current cash, cash equivalents and short-term marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.

The current COVID-19 (coronavirus) pandemic, which is impacting worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.

The extent to which COVID-19 impacts the Company’s business, including its clinical trials and financial condition, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

The extent to which COVID-19 impacts the Company’s business, including its clinical trials and financial condition, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

As COVID-19 continues to spread around the globe, including the spread of more contagious and virulent variants, we will likely experience disruptions, including delays or difficulties in enrolling patients in our clinical trials, delays or difficulties in clinical site initiation, interruption of key clinical trial activities, delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials and delays in necessary interactions with local regulatory authorities.

2 unchanged sentences

On November 8, 2019, the Company entered into an exchange agreement (the “Exchange Agreement”) with an investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,458,000 shares of the Company’s common stock, par value $ 0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,458,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.0001 per share.

The Exchange Warrants will expire ten years from the date of issuance.

The Exchange Warrants are exercisable at any time prior to expiration except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99 % of the Company’s common stock, subject to certain exceptions.

The Exchange Warrants were exercisable at any time prior to expiration.

In accordance with Accounting Standards Codification Topic 505, Equity, and Accounting Research Bulletin 43, the Company recorded the retirement of the common stock exchanged as a reduction of common shares outstanding and elected to record the excess over par value as a debit to additional paid-in-capital at the fair value of the Exchange Warrants on the issuance date.

The Exchange Warrants are classified as equity in accordance with Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity, and Accounting Standards Codification Topic 815, Derivatives and Hedging, and the fair value of the Exchange Warrants

was recorded as a credit to additional paid-in capital and is not subject to remeasurement.

The Exchange Warrants were classified as equity in accordance with Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity, and Accounting Standards Codification Topic 815, Derivatives and Hedging, and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in capital and is not subject to remeasurement.

The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants.

During the three months ended September 30, 2021, the Exchange Warrants were fully exercised, resulting in the issuance of 1,457,947 shares of common stock on a net exercise basis.

In September 2021, the Exchange Warrants were fully exercised, resulting in the issuance of 1,457,947 shares of common stock on a net exercise basis.

Summary of Significant Accounting Policies

5 unchanged sentences

Since its inception, the Company has incurred significant losses and negative cash flows from operations.

As of September 30, 2021, the Company had an accumulated deficit of $ 257.1 million and cash, cash equivalents and marketable securities of $ 76.3 million.

As of March 31, 2022, the Company had an accumulated deficit of $ 274.7 million and cash, cash equivalents and marketable securities of $ 62.9 million.

The Company has financed its operations primarily with the proceeds from the sale of stock.

4 unchanged sentences

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

The condensed consolidated results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The condensed consolidated results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2022.

5 unchanged sentences

Angel Pharmaceuticals Co., Ltd.’s (“Angel Pharmaceuticals”) functional currency is the Chinese renminbi (RMB).

Angel Pharmaceuticals’ financial statements are reported in RMB.

Angel Pharmaceuticals’ consolidated financial statements are reported in RMB.

Financial information is translated from RMB to the U.S.

6 unchanged sentences

The impact of the out of period adjustment in the quarter ended March 31, 2021 was to reduce its investment in Angel Pharmaceuticals and other comprehensive income by $ 83,000 .

The Company has concluded that the out of period adjustment is not material to the consolidated financial statements for the fiscal year ended December 31, 2020 or the interim financial statements for the quarter ended March 31, 2021.

The Company has concluded that the out of period adjustment is not material to the unaudited condensed consolidated financial statements for the quarter ended March 31, 2021.

Concentrations of Credit Risk and Other Risks and Uncertainties

13 unchanged sentences

The Company’s significant accounting policies are described in Note 2 to its consolidated financial statements for the year ended December 31, 2021, included in its Annual Report on Form 10-K.

There have been no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2021.

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2022.

Recent Accounting Pronouncements

2 unchanged sentences

Simplifying the Accounting for Income Taxes.

ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating incomes taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 is effective in 2021 and interim periods within that year and permits for an early adoption.

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net loss - basic and diluted

1 unchanged sentence

Net loss per share, basic and diluted

Weighted average common shares outstanding for the three and nine months ended September 30, 2021 and 2020 include 1,458,000 shares of common stock issuable on the conversion of pre-funded warrants described in Note 1.

Weighted average common shares outstanding for the three months ended March 31, 2021 include 1,458,000 shares of common stock issuable on the conversion of pre-funded warrants described in Note 1.

The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect:

Three Months Ended

Nine Months Ended

September 30,

Outstanding options

12 unchanged sentences

These inputs include reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/default projections based on historical data and other observable inputs.

The following tables present information as of September 30, 2021 and December 31, 2020 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):

September 30, 2021

The following tables present information as of March 31, 2022 and December 31, 2021 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):

March 31, 2022

Fair Value Measured Using

5 unchanged sentences

Marketable securities

As of September 30, 2021, marketable securities had a maximum remaining maturity of six months .

As of September 30, 2021 and December 31, 2020, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

September 30, 2021

As of March 31, 2022, marketable securities had a maximum remaining maturity of twelve months .

As of March 31, 2022 and December 31, 2021, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

March 31, 2022

Treasury securities

4 unchanged sentences

Equity Method Investment

As of September 30, 2021 and December 31, 2020, the Company’s ownership interest in Angel was approximately 49.7 %, excluding 7 % of Angel’s equity reserved for issuance under the Angel ESOP.

The Company recognized its share of losses in Angel for the total amount of $ 1.7 million and $ 2.3 million as loss from equity method investment on the consolidated statement of operations for the three and nine months ended September 30, 2021, respectively.

As of March 31, 2022 and December 31, 2021, the Company’s ownership interest in Angel was approximately 49.7 %, excluding 7 % of Angel’s equity reserved for issuance under the Angel ESOP.

The Company recognized its share of losses in Angel for the total amount of $ 1.0 million as loss from equity method investment on the consolidated statement of operations for the three months ended March 31, 2022, respectively.

Summary Financial Information

1 unchanged sentence

Balance Sheet Data (unaudited)

September 30, 2021

March 31, 2022

December 31, 2021

3 unchanged sentences

Current liabilities

Non-current liabilities

Stockholders' equity

Three Months Ended

Nine Months Ended

September 30,

Statement of Operations Data (unaudited)

33 unchanged sentences

Genentech Collaboration Agreements

In October 2015, the Company entered into a clinical trial collaboration agreement with Genentech to evaluate the safety, tolerability and preliminary efficacy of ciforadenant combined with Genentech’s investigational cancer immunotherapy, Tecentriq (atezolizumab), a fully humanized monoclonal antibody targeting protein programmed cell death ligand 1(“PD-L1”), in a variety of solid tumors in a Phase 1/1b clinical trial.

Pursuant to this agreement, the Company will be responsible for the conduct and cost of the relevant studies, under the supervision of a joint development committee made up of representatives of the Company and representatives of Genentech.

In October 2015, the Company entered into a clinical trial collaboration agreement with Genentech to evaluate the safety, tolerability and preliminary efficacy of ciforadenant combined with Genentech’s investigational cancer immunotherapy, Tecentriq, a fully humanized monoclonal antibody targeting PD-L1, in a variety of solid tumors in our Phase 1/1b clinical trial.

Pursuant to this agreement, the Company will be responsible for the conduct and cost of the relevant studies, under the supervision of a joint development committee made up of the Company’s representatives and representatives of Genentech.

Genentech will supply Tecentriq.

At this time, no further patients are being enrolled in this trial.

As part of the agreement, the Company granted Genentech certain rights of first negotiation to participate in future clinical trials that the Company may conduct evaluating the administration of ciforadenant in combination with an anti-PD-1 or anti-PD-L1 antibody.

If the Company and Genentech do not reach agreement on the terms of any such participation by Genentech within a specified time period, the Company retains the right to collaborate with third parties in such activities.

The Company also granted Genentech certain rights of first negotiation should it decide to license development and commercialization rights to ciforadenant.

Should the Company and Genentech not reach agreement on the terms of such a license within a specified time period, it retains the right to enter into a license with another third party.

The Company and Genentech each have the right to terminate the agreement for material breach by the other party.

In addition, the agreement may be terminated by either party due to safety considerations, if directed by a

regulatory authority or if development of ciforadenant or Tecentriq is discontinued.

Further, the agreement will expire after a set period of time following the provision by the Company of the final clinical study report to Genentech.

In May 2017, the Company signed a second clinical trial collaboration agreement with Genentech.

Under the second agreement, ciforadenant administered in combination with Tecentriq is being evaluated in a Phase 1b/2 randomized, controlled clinical study, known as Morpheus, as second-line therapy in patients with non-small cell lung cancer who are resistant and/or refractory to prior therapy with an anti-PD-(L)1 antibody.

The patients in the Morpheus trial are currently in the follow-up phase of the trial.

Genentech is responsible for the conduct of the study and the parties share the cost of the Morpheus trial, which began enrolling patients in the fourth quarter of 2017.

If both parties do not reach agreement on the terms of any such participation by Genentech within a specified time period, the Company retains the right to collaborate with third parties in such activities.

The Company also granted Genentech certain rights of first negotiation should the Company decide to license development and commercialization rights to ciforadenant.

Should both parties not reach agreement on the terms of such a license within a specified time of period, the Company retains the right to enter into a license with another third party.

This agreement will expire after a set period of time following the provision by the Company of the final clinical study report to Genentech, which has not yet been finalized.

In May 2017, the Company entered into a second clinical trial collaboration agreement with Genentech.

Under the new agreement, ciforadenant administered in combination with Tecentriq will be evaluated in a Phase 1b/2 randomized, controlled clinical study as second-line therapy in patients with NSCLC who are resistant and/or refractory to prior therapy with an anti-PD-(L)1 antibody.

This study has completed patient enrollment of 16 patients.

Genentech was responsible for the conduct of the study and the Company will share the cost of the Phase 1b/2 trial, which began enrolling patients in the fourth quarter of 2017.

The Company is responsible for supplying ciforadenant and retains global development and commercialization rights to ciforadenant.

The Company and Genentech each have the right to terminate the agreement for material breach by the other party.

In addition, the agreement may be terminated by either party due to safety considerations, if directed by a regulatory authority or if development of ciforadenant or Tecentriq is discontinued.

This agreement will expire after a set period of time following the provision by Genentech of a final study report to the Company.

Monash License Agreement

7 unchanged sentences

The license agreement is terminable at will by the Company upon providing 30 days written notice to Monash, or by either party for material breaches by the other party.

In addition, Monash may terminate the entire agreement or convert the license to a non-exclusive license if the Company has materially breached our obligation to use commercially reasonable efforts to develop and commercialize a licensed product, subject to a specified notice and cure mechanism.

In addition, Monash may terminate the entire agreement or convert the license to a non-exclusive license if the Company has materially breached its obligation to use commercially reasonable efforts to develop and commercialize a licensed product, subject to a specified notice and cure mechanism.

Balance Sheet Components (in thousands)

September 30,

Prepaid and Other Current Assets

9 unchanged sentences

Accrued and Other Liabilities

Accrued clinical trial related

Accrued clinical trial expense

Accrued manufacturing expense

1 unchanged sentence

Accrued legal and accounting

As of September 30, 2021, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock.

As of March 31, 2022, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock.

Each share of common stock is entitled to one vote.

Common stockholders are entitled to dividends if and when declared by the board of directors.

As of September 30, 2021, no dividends on common stock had been declared.

In March 2020, the Company entered into an open market sales agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, from time to time, with aggregate gross sales proceeds of up to $ 50.0 million through an at-the-market equity offering program under which Jefferies will act as its sales agent.

The issuance and sale of shares of common stock by the Company pursuant to the Sales Agreement are deemed an “at-the-market” offering under the Securities Act of 1933, as amended.

Jefferies is entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreement.

During the nine months ended September 30, 2021, the Company sold 6,609,605 shares under its at-the-market offering program resulting in net proceeds of $ 29.0 million.

As of September 30, 2021, $ 18.9 million remained available for sale under the Sales Agreement.

As of March 31, 2022, no dividends on common stock had been declared.

In March 2020, the Company entered into an open market sale agreement (the “2020 Sales Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $ 50,000,000 , through an at-the-market equity offering program under which Jefferies will act as its sales agent.

In November 2021, the Company entered into another Sale Agreement (“2021 Sales Agreement”) with Jefferies to sell shares of our common stock from time-to-time, with aggregate gross sales proceeds of up to $ 40,000,000 .

The issuance and sale of shares of common stock by the Company pursuant to the Sales Agreements are deemed an “at-the-market” offering under the Securities Act of 1933, as amended.

Jefferies is entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreements.

During the quarter ended March 31, 2022, the Company did not sell any shares of common stock under it’s at-the-market offering program.

As of March 31, 2022, the Company had sold 6,920,339 shares of common stock for gross proceeds of $ 31.1 million under the 2020 Sales Agreement and $ 18.9 million and $ 40.0 million remained for sale under the 2020 Sales Agreement and 2021 Sales Agreement, respectively.

The Company has reserved shares of common stock for issuance as follows:

September 30,

Exchange warrants

Shares available for future option grants

18 unchanged sentences

Options granted

( 1,408,000 )

Options exercised

Options forfeited

Balance at September 30, 2021

Balance at March 31, 2022

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

Research and development

General and administrative

During the three and nine months ended September 30, 2021 and 2020, the Company recorded no income tax benefits for the net operating losses (NOLs) incurred due to the uncertainty of realizing a benefit from those items.

During the three months ended March 31, 2022 and 2021, the Company recorded no income tax benefits for the net operating losses (NOLs) incurred due to the uncertainty of realizing a benefit from those items.

The Company continues to maintain a full valuation allowance against its net deferred tax assets.

11 unchanged sentences

As a result of this lease extension, the Company recorded a $ 2.4 million increase in the operating lease right-of-use asset and a corresponding increase in the operating lease liability .

As of September 30, 2021 and December 31, 2020, the right-of-use asset under operating lease was $ 3.4 million and $ 1.6 million, respectively.

The elements of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):

As of March 31, 2022 and December 31, 2021, the right-of-use asset under operating lease was $ 3.0 million and $ 3.2 million, respectively.

The elements of lease expense for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

Three Months Ended

Nine Months Ended

Statements of operations and

September 30,

comprehensive loss location

11 unchanged sentences

Discount rate

As of September 30, 2021, minimum rental commitments under this lease were as follows (in thousands):

As of March 31, 2022, minimum rental commitments under this lease were as follows (in thousands):

Year Ended December 31 (in thousands)

10 unchanged sentences

Sublease income is recognized on a straight-line basis as other income in our consolidated statements of operations.

For the three months ended September 30, 2021, the Company recognized $ 0.1 million of sublease income.

For the three months ended March 31, 2022 the Company recognized $ 0.1 million of sublease income.

Commitments and Contingencies

As of March 31, 2022, the Company had total non-cancellable purchase commitments of $ 9.3 million for the purchase of drug substance in 2022.

Contingencies

In August 2015, the Company entered into an agreement for a line of credit of $ 0.1 million for the purpose of issuing its landlord a letter of credit of $ 0.1 million as a security deposit under its facility lease.

12 unchanged sentences

The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law.

been no claims to date and the Company has a directors and officers insurance policy that may enable it to recover a portion of any amounts paid for future claims.

There have been no claims to date and the Company has a directors and officers insurance policy that may enable it to recover a portion of any amounts paid for future claims.

Legal Proceedings

8 unchanged sentences

(1) Peter Thompson, M.D., a member of our Board of Directors since November 2014, is a Private Equity Partner at OrbiMed Advisors, LLC.

As more fully described in Note 5 to the Company’s consolidated financial statements for the year ended December 31, 2020, included in our Annual Report on Form 10-K, the Company holds a 49.7 % ownership in Angel Pharmaceuticals and, in connection with intellectual property licensing agreements between the Company and Angel Pharmaceuticals, the Company provides operational support and clinical drug supplies to Angel Pharmaceuticals.

As more fully described in Note 5 to the Company’s consolidated financial statements for the year ended December 31, 2021, included in the Annual Report on Form 10-K, the Company holds a 49.7 % ownership in Angel Pharmaceuticals and, in connection with intellectual property licensing agreements between the Company and Angel Pharmaceuticals, the Company provides operational support and clinical drug supplies to Angel Pharmaceuticals.

Third-party and internal personnel costs incurred by the Company are billed to Angel Pharmaceuticals in the period incurred and recorded as an offset to expenses.

During the three and nine months ended September 30, 2021, the Company billed Angel for approximately $ 58,000 and $ 167,000 in internal personnel costs and $ 184,000 and $ 470,000 in third-party party costs, respectively.

The third-party costs were primarily associated with clinical drug supply and as passthrough costs, they did not have any impact on the Company’s condensed consolidated statements of operations.

During the three months ended March 31, 2022, the Company billed Angel for approximately $ 50,000 in internal personnel costs and $ 101,000 in third-party party costs.

In August 2021, the Company entered into an agreement to sublease 7,585 square feet of its office and laboratory space in Burlingame, California to Angel Pharmaceuticals.

2 unchanged sentences

Sublease income is recognized on a straight-line basis as other income in our consolidated statements of operations.

For the three months ended September 30, 2021, the Company recognized $ 0.1 million of sublease income.

For the three months ended March 31, 2022, the Company recognized approximately $ 146,000 of sublease income.

In July 2021, Linda S.

1 unchanged sentence

ICON is a clinical research organization and provides services to support the Company’s clinical trials.

During the nine months ended September 30, 2021, the Company recorded approximately $ 205,000 in clinical trial expenses under its agreements with ICON.

During the three months ended March 31, 2022 and 2021, the Company recorded approximately $ 69,000 and $ 60,000 , respectively, in clinical trial expenses under its agreements with ICON.

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