What changed in this filing

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Item 1. Financial Statements

2022-08-08 compared with 2022-05-05 · 63 added, 48 removed, 436 unchanged (20% of the section changed)

40 unchanged sentences

$ 0.0001 par value;

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

10,000,000 shares authorized at June 30, 2022 and December 31, 2021;

0 shares issued and outstanding at June 30, 2022 and December 31, 2021

Common stock:

$ 0.0001 par value;

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

290,000,000 shares authorized at June 30, 2022 and December 31, 2021;

46,553,511 shares issued and outstanding at June 30, 2022 and December 31, 2021

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses:

9 unchanged sentences

Other comprehensive loss:

Unrealized gain (loss) on marketable securities

Unrealized loss on marketable securities

Cumulative foreign currency translation adjustment

4 unchanged sentences

(in thousands, except share data)

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Comprehensive

5 unchanged sentences

Balance at March 31, 2022

Three Months Ended March 31, 2021

Stock-based compensation expense

Unrealized loss on marketable securities

Foreign currency translation adjustment

Balance at June 30, 2022

Six Months Ended June 30, 2021

Comprehensive

6 unchanged sentences

Balance at March 31, 2021

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 June 30, 2021

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

14 unchanged sentences

Purchases of marketable securities

Sales of marketable securities

Maturities of marketable securities

Purchases of property and equipment

Net cash provided by (used in) investing activities

Net cash (used in) provided by 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 three months ended March 31, 2021)

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

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

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

Supplemental disclosures of cash flow information

Purchases of property and equipment incurred but not paid

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

22 unchanged sentences

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, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations.

Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of mupadolimab (formerly CPI-006), CPI-818 and ciforadenant.

The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of mupadolimab, CPI-818 and ciforadenant, as well as product candidates under the Company’s other development programs.

Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of CPI-818, ciforadenant and mupadolimab (formerly CPI-006).

The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of CPI-818, ciforadenant and mupadolimab, as well as product candidates under the Company’s other development programs.

These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining regulatory

1 unchanged sentence

In addition, other unanticipated costs may arise.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of mupadolimab, CPI-818, and ciforadenant or any other product candidates.

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.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of CPI-818, ciforadenant and mupadolimab or any other product candidates.

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 CPI-818, ciforadenant and mupadolimab 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, 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 incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 283.0 million as of June 30, 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 March 31, 2022, the Company had cash, cash equivalents and short-term marketable securities of $ 62.9 million.

As of June 30, 2022, the Company had cash, cash equivalents and short-term marketable securities of $ 56.7 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.

17 unchanged sentences

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

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.

As of June 30, 2022, the Company had an accumulated deficit of $ 283.0 million and cash, cash equivalents and marketable securities of $ 56.7 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 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 condensed consolidated results of operations for the three and six months ended June 30, 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.

30 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 three months ended March 31, 2022.

There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2022.

Recent Accounting Pronouncements

9 unchanged sentences

Three Months Ended

Six Months Ended

Net loss - basic and diluted

1 unchanged sentence

Net loss per share, basic and diluted

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.

Weighted average common shares outstanding for the three and six months ended June 30, 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

Six Months Ended

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 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

The following tables present information as of June 30, 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):

June 30, 2022

Fair Value Measured Using

5 unchanged sentences

Marketable securities

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

As of June 30, 2022, marketable securities had a maximum remaining maturity of eleven months .

As of June 30, 2022 and December 31, 2021, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

June 30, 2022

Treasury securities

4 unchanged sentences

Equity Method Investment

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.

As of June 30, 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 $ 1.6 million and $ 2.6 million as loss from equity method investment on the consolidated statement of operations for the three and six months ended June 30, 2022, respectively.

Summary Financial Information

1 unchanged sentence

Balance Sheet Data (unaudited)

March 31, 2022

June 30, 2022

December 31, 2021

6 unchanged sentences

Three Months Ended

Six Months Ended

Statement of Operations Data (unaudited)

16 unchanged sentences

In addition, Scripps may terminate the license on a product-by-product basis, or the entire agreement, if the Company fails to meet specified diligence obligations related to the development and commercialization of licensed products.

Scripps may also terminate the agreement after the third anniversary of the effective date of the agreement if it reasonably believes, based on reports the Company provides to

Scripps, that the Company has not used commercially reasonable efforts as required under the agreement, subject to a specified notice and cure period.

Scripps may also terminate the agreement after the third

anniversary of the effective date of the agreement if it reasonably believes, based on reports the Company provides to Scripps, that the Company has not used commercially reasonable efforts as required under the agreement, subject to a specified notice and cure period.

Vernalis Licensing Agreement

23 unchanged sentences

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.

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 non small cell lung cancer (“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.

28 unchanged sentences

Accrued legal and accounting

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.

As of June 30, 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 March 31, 2022, no dividends on common stock had been declared.

As of June 30, 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.

2 unchanged sentences

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.

During the six months ended June 30, 2022, the Company did not sell any shares of common stock under it’s at-the-market offering program.

As of June 30, 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:

19 unchanged sentences

Options granted

Options exercised

Options forfeited

Balance at March 31, 2022

Balance at June 30, 2022

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Research and development

General and administrative

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.

During the six months ended June 30, 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 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):

As of June 30, 2022 and December 31, 2021, the right-of-use asset under operating lease was $ 2.7 million and $ 3.2 million, respectively.

The elements of lease expense for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

Three Months Ended

Six Months Ended

Statements of operations and

12 unchanged sentences

Discount rate

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

As of June 30, 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 March 31, 2022 the Company recognized $ 0.1 million of sublease income.

For the three and six months ended June 30, 2022 the Company recognized $ 0.1 million and $ 0.3 million of sublease income, respectively.

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.

As of June 30, 2022, the Company had total non-cancellable purchase commitments of $ 6.2 million for the purchase of drug substance in 2022.

Contingencies

26 unchanged sentences

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 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.

During the six months ended June 30, 2022 and 2021, the Company billed Angel for approximately $ 120,000 and $ 109,000 , respectively, in internal personnel costs and $ 252,000 and $ 286,000 , respectively, 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 March 31, 2022, the Company recognized approximately $ 146,000 of sublease income.

For the three and six months ended June 30, 2022, the Company recognized approximately $ 146,000 and $ 292,000 of sublease income, respectively.

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 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.

During the six months ended June 30, 2022 and 2021, the Company recorded approximately $ 173,000 and $ 129,000 , 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