What changed in this filing

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Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 133 added, 113 removed, 262 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands, except share data)

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

Restricted cash

Deferred offering costs

Liabilities and stockholders’ equity

11 unchanged sentences

Common stock, $ 0.0001 par value;

200,000,000 shares authorized at June 30, 2021 and December 31, 2020;

11,812,792 shares issued and outstanding at June 30, 2021;

10,634,245 shares issued and outstanding at December 31, 2020

200,000,000 shares authorized;

12,093,333 and 10,634,245 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

6 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

3 unchanged sentences

Loss from operations

Interest income (expense), net

Change in fair value of warrant liability

Interest expense, net

Per share information:

7 unchanged sentences

Stockholders’ equity

Balance at March 31, 2021

Sale of common stock and common stock warrants, net of $ 596 in offering costs

Balance at June 30, 2021

Sale of common stock

Share-based compensation expense

Exercise of common stock warrants

Exercise of stock options

Balance at June 30, 2021

Exercise of stock options and settlement of RSUs

Balance at September 30, 2021

Convertible preferred stock

4 unchanged sentences

Exercise of common stock warrants

Exercise of stock options

Balance at June 30, 2021

Exercise of stock options and vesting of restricted stock

Balance at September 30, 2021

Convertible preferred stock

Stockholders’ deficit

Balance at March 31, 2020

Sale of Series A convertible preferred stock

Balance at June 30, 2020

Series A convertible preferred stock issuance cost

Share-based compensation expense

Exercise of stock options

Balance at June 30, 2020

Balance at September 30, 2020

Convertible preferred stock

1 unchanged sentence

Balance at January 1, 2020

Sale of Series A convertible preferred stock

Sale of Series A convertible preferred stock and warrants with a fair value of $ 1,522 , net of $ 49 of issuance costs

Share-based compensation expense

Exercise of stock options

Balance at June 30, 2020

Balance at September 30, 2020

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

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

2 unchanged sentences

Share-based compensation

Change in fair value of warrant liability

Deferred rent

15 unchanged sentences

Proceeds from exercise of stock warrants

Payment of IPO costs

Payment of offering costs

Proceeds from long-term debt

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Fair value of liability-classified warrants issued in connection with Series A convertible preferred stock

Series A convertible preferred stock warrants issuance costs in accounts payable

IPO costs included in accounts payable and accrued expenses and other current liabilities

Purchases of property and equipment in accounts payable

Offering costs in accounts payable

Offering costs in accrued expenses

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

7 unchanged sentences

Since its inception, the Company has devoted substantially all its resources to research and development, raising capital, building its management team and building its intellectual property portfolio.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to;

technical risks associated with the successful research, development and manufacturing of product candidates, uncertain results of preclinical and clinical testing, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and regulatory approval of product candidates and the ability to secure additional capital to fund operations.

The Company has incurred net losses since inception, including net losses $ 9.1 million and $ 5.4 million for the six months ended June 30, 2021 and 2020, respectively, and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its potential product candidates.

As of June 30, 2021, the Company had an accumulated deficit of $ 63.5 million.

The Company expects to generate operating losses and negative operating cash flows for the foreseeable future.

On April 28, 2021, the Company sold 1,000,000 units, consisting of one share of the Company’s common stock and one warrant to purchase one-half a share of common stock in a private placement at a price of $ 27.00 per unit for net proceeds of $ 26.4 million.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, risks associated with the successful research, development and manufacturing of product candidates, uncertain results of preclinical and clinical testing, development by competitors of new technological innovations, dependence on key personnel and third-party vendors, protection of proprietary technology, compliance with government regulations, regulatory approval of product candidates and the ability to secure additional capital to fund operations.

The Company has incurred net losses since inception, including net losses of $ 16.9 million and $ 13.8 million for the nine months ended September 30, 2021 and 2020, respectively, and it expects to generate losses from operations and negative operating cash flows for the foreseeable future primarily due to research and development costs for its potential product candidates.

As of September 30, 2021, the Company had an accumulated deficit of $ 71.3 million.

On October 6, 2020, the Company closed its initial public offering (“IPO”), in which the Company issued and sold 3,250,000 shares of its common stock at a public offering price of $ 12.00 per share.

1 unchanged sentence

The Company received net proceeds of $ 41.7 million after deducting underwriting discounts and commissions of $ 3.1 million but before deducting other offering expenses.

The Company had cash of $ 59.8 million at June 30, 2021.

The Company expects that its cash will enable it to fund its operating expenses and capital expenditure requirements for at least twelve months from the filing date of this Quarterly Report on Form 10-Q.

However, additional funding will be necessary beyond this point to fund additional research and development, clinical development and operations in order to pursue its growth strategy.

On April 28, 2021, the Company sold 1,000,000 units, each consisting of one share of the Company’s common stock and one warrant to purchase one-half a share of common stock in a private placement at a price of $ 27.00 per unit for net proceeds of $ 26.4 million.

The Company recently filed a shelf registration statement on Form S-3, which was declared effective by the SEC on October 14, 2021, pursuant to which the Company may issue from time to time securities with an aggregate price of up to $ 200.0 million.

On October 1, 2021 the Company entered into a new Open Market Sale Agreement (“ATM Agreement”) with Jefferies LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of common stock under the registration statement having an aggregate offering price of up to $ 75.0 million through Jefferies acting as sales agent.

The Company has not yet sold any shares under the ATM Agreement.

The Company had cash of $ 56.2 million at September 30, 2021.

The Company expects that its cash will enable it to fund its operating expenses and capital expenditure requirements for at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

However, additional funding will be necessary beyond this point to fund additional research and development, clinical development and operations in order to pursue the Company’s growth strategy.

If the Company cannot obtain the necessary funding, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties to commercialize potential products or technologies that it might otherwise seek to develop or commercialize independently;

consider other various strategic alternatives, including a merger or sale of the Company;

consider other various strategic alternatives, sooner than it might otherwise, including a merger or sale of the Company;

or cease operations.

If the Company engages in collaborations, it may receive lower consideration upon commercialization of such products than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the product development process.

Company engages in collaborations because it is unable to obtain necessary funding through other resources, it may receive lower consideration upon commercialization of such products than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the product development process.

Additionally, volatility in the capital markets and general economic conditions in the United States may be a significant obstacle to raising the required funds.

Operations of the Company are subject to certain risks and uncertainties including various internal and external factors that will affect whether and when the Company’s product candidates become approved drugs and how significant their market share will be, some of which are outside of the Company’s control.

The length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations.

Operations of the Company are subject to certain risks and uncertainties including various internal and external factors that will affect whether and when the Company’s product candidates obtain appropriate regulatory approvals for commercialization and how significant their market share will be, some of which are outside of the Company’s control.

The length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the regulatory approval process will materially affect the Company’s financial condition and future operations.

On March 11, 2020, the World Health Organization characterized the novel COVID 19 virus as a global pandemic.

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These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 25, 2021.

The accompanying condensed financial statements as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 are unaudited but include all adjustments that management believes to be necessary for a fair presentation of the periods presented.

The accompanying condensed financial statements as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 are unaudited but include all adjustments that management believes to be necessary for a fair presentation of the periods presented.

Interim results are not necessarily indicative of results for a full year.

6 unchanged sentences

The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances.

Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the fair value of the Company’s common stock in connection with share-based compensation arrangements.

Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the fair value of the Company’s common stock, prior to its IPO in connection with share-based compensation arrangements.

Actual results could differ from these estimates.

3 unchanged sentences

Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as

the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following:

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This lease expires in 2022 at which time the cash will be released from restriction.

Restricted cash was $ 100,000 at both June 30, 2021 and 2020.

Restricted cash was $ 100,000 at both September 30, 2021 and 2020.

The following table provides a reconciliation of the components of cash and restricted cash reported in the Company’s condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows:

(in thousands)

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

Restricted cash

Equity issuance costs

The Company capitalized incremental legal, professional, accounting and other third-party fees that were directly associated with the April 2021 equity offering and the IPO as other noncurrent assets until the offering and IPO each were consummated.

After consummation of the offering and IPO, these costs were recorded in stockholders’ equity as a reduction of additional paid-in-capital generated as a result of the offering and IPO.

As of June 30, 2021 and December 31, 2020, there were no deferred offering costs.

The Company capitalizes costs that are directly associated with in-process equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds from the applicable financing.

If a financing is abandoned, deferred offering costs are expensed.

As of September 30, 2021, there was $ 0.3 million of deferred offering costs in connection with the Company’s shelf registration statement (Note 10) and there were no deferred offering costs as of December 31, 2020.

Government contract funding

5 unchanged sentences

Additionally, under the terms of the license agreements, the Company is obligated to make future payments should certain development and regulatory milestones be achieved.

No such costs have been incurred for the three and six months ended June 30, 2021 and 2020.

Costs for certain research and

development activities are recognized based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as a prepaid or accrued expense.

No such costs have been incurred for the three and nine months ended September 30, 2021 and 2020.

Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as a prepaid or accrued expense.

Net loss per share

5 unchanged sentences

Diluted net loss per share of common stock is computed by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents.

The following potentially dilutive securities outstanding as of June 30, 2021 and 2020 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

The following potentially dilutive securities outstanding as of September 30, 2021 and 2020 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

September 30,

Stock options (1)

5 unchanged sentences

In periods in which the Company reports a net loss per share of common stock, diluted net loss per share of common stock is the same as basic net loss per share of common stock since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The Company reported a net loss per share of common stock for the three and six months ended June 30, 2021 and 2020.

The Company reported a net loss per share of common stock for the three and nine months ended September 30, 2021 and 2020.

Segment and geographic information

2 unchanged sentences

The Company views its operations as, and manages its business in one operating segment operating exclusively in the United States.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASC Topic 842, Leases, (“Topic 842”).

This standard requires all entities that lease assets with terms of more than 12 months to capitalize the assets and related liabilities on the balance sheet.

In June 2020, the FASB issued ASU 2020-05, which amended the effective date of Topic 842 until January 1, 2022.

Upon adoption, the standard requires the use of a modified retrospective transition approach for its adoption.

The Company is currently evaluating the effect Topic 842 will have on its consolidated financial statements and related disclosures.

Department of Defense (“DoD”) expense reimbursement contract

In July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (the OTA Agreement) with the DoD to fund the Company’s efforts in developing Biosynthetic Convalescent Plasma (BCP) to treat COVID-19.

Under the OTA Agreement, the Company intends to develop BCP for use in the U.S.

military population and the U.S.

population as a whole, subject to approval by the U.S.

Food and Drug Administration (FDA).

In July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (“the OTA Agreement”) with the DoD to fund the Company’s efforts in developing an antibody cocktail therapeutic to treat COVID-19.

The amount of funding being made available to the Company under this expense reimbursement contract was $ 13.3 million.

2021, the Company and the DoD amended the OTA, pursuant to which the DoD award was increased from $ 13.3 million to $ 17.6 million.

Based on the Company’s currently anticipated expenditures, the $ 17.6 million is expected to be received through 2021.

The Company recorded contra-research and development expense in the amount of $ 4.1 million and $ 8.1 million for the three and six months ended June 30, 2021, respectively, in the condensed statements of operations.

There was no contra-research and development expense for the three and six months ended June 30, 2020.

As of June 30, 2021, the Company had an expense reimbursement receivable balance of $ 1.7 million due from the DoD in prepaid expenses and other current assets on the condensed balance sheet.

In May 2021, the Company and the DoD amended the OTA, pursuant to which the DoD award was increased from $ 13.3 million to $ 17.6 million.

The Company recorded contra-research and development expense of $ 5.3 million and $ 13.4 million for the three and nine months ended September 30, 2021, respectively, in the condensed statements of operations.

The Company recorded contra-research and development expense of $ 0.6 million for the three and nine months ended September 30, 2020 in the condensed statements of operations.

As of September 30, 2021, the Company had an expense reimbursement receivable balance of $ 2.4 million due from the DoD in prepaid expenses and other current assets on the condensed balance sheet.

As of December 31, 2020, the Company had an expense reimbursement receivable balance of $ 0.9 million due from the DoD in prepaid expenses and other current assets on the condensed balance sheet.

Costs that have been reimbursed by the DoD but not yet expensed by the Company are recorded as a deferred research obligation liability for the period.

As of June 30, 2021, the Company has a deferred research obligation liability of $ 0.5 million.

As of September 30, 2021, the Company has a deferred research obligation liability of $ 0.1 million.

This amount is included in accrued expenses and other liabilities in the accompanying condensed balance sheet.

DoD reimbursable services that have been performed but not yet billed are recorded as an unbilled receivable in prepaid expenses and other current assets on the condensed balance sheet.

As of September 30, 2021, the Company has an unbilled receivable from the DoD of $ 1.8 million.

Accrued expenses

1 unchanged sentence

(in thousands)

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Compensation and related benefits

Professional fees, contractors and other

Research and development

Professional fees

Long-term debt

On April 30, 2020, the Company entered into a loan agreement with Silicon Valley Bank as the lender (Lender) for a loan in an aggregate principal amount of $ 0.5 million (the PPP Loan) pursuant to the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and implemented by the U.S.

Small Business Administration (SBA).

The Company used the proceeds of the Loan for payroll and other qualifying expenses.

On April 30, 2020, the Company entered into a loan agreement with Silicon Valley Bank as the lender (“Lender”) for a loan in an aggregate principal amount of $ 0.5 million (“the PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act and implemented by the U.S.

Small Business Administration.

The Company used the proceeds of the PPP Loan for payroll and other qualifying expenses.

The entire PPP Loan was forgiven on May 21, 2021 and recognized as other income in the statement of operations.

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The lease is subject to fixed rate escalation increases and the landlord waived the Company’s rent obligation for the first two months of the lease.

Deferred rent is $ 13,000 and $ 16,000 as of June 30, 2021 and December 31, 2020, respectively, and is being amortized as a reduction in rent expense over the term of the lease.

Deferred rent is $ 11,000 and $ 16,000 as of September 30, 2021 and December 31, 2020, respectively, and is being amortized as a reduction in rent expense over the term of the lease.

The Company recognizes rent expense on a straight-line basis over the expected lease term.

In August 2020, the Company entered into a one-year operating lease for laboratory equipment that expired in July 2021 and had fixed monthly payments of $ 18,000 .

Future minimum lease payments for the Company’s operating leases are as follows as of June 30, 2021 (in thousands):

Future minimum lease payments for the Company’s operating leases are as follows as of September 30, 2021 (in thousands):

Years ending December 31,

2021 (represents remaining six months in 2021)

Rent expense was $ 0.1 million for each of the three months ended June 30, 2021 and 2020, respectively, and $ 0.1 million and $ 0.2 million for the six months ended June 30, 2021 and 2020, respectively.

2021 (represents remaining three months in 2021)

Rent expense was $ 0.1 million and $ 0.1 million for each of the three months ended September 30, 2021 and 2020, respectively, and $ 0.2 million and $ 0.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Employment agreements

The Company entered into employment offer letter agreements (“the Employment Agreements”) with key personnel providing for compensation and severance in certain circumstances, as defined in the respective Employment Agreements.

The Employment Agreements may be terminated by either the Company or the employees in accordance with the respective Employment Agreements and provide for annual pay increases and bonuses at the discretion of the Board of Directors.

The Employment Agreements may be terminated by either the Company or the employees in accordance with the respective Employment Agreements and provide for annual pay adjustments and bonuses at the discretion of the Board of Directors.

Employee benefit plan

2 unchanged sentences

The Company assumes all administrative costs of the 401(k) Plan and makes matching contributions as defined in the 401(k) Plan document.

The Company made matching contributions of $ 30,000 and $ 16,000 to the 401(k) Plan for the three months ended June 30, 2021 and 2020, respectively, and $ 69,000 and $ 32,000 for the six months ended June 30, 2021 and 2020, respectively.

The Company made matching contributions of $ 33,000 and $ 18,000 to the 401(k) Plan for the three months ended September 30, 2021 and 2020, respectively, and $ 0.1 million and $ 50,000 for the nine months ended September 30, 2021 and 2020, respectively.

Legal proceedings

1 unchanged sentence

At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.

Patent License Agreement

In June 2021, the Company entered into an exclusive worldwide patent license agreement with several Philadelphia based universities and hospitals (“the Licensors”) to further discover, develop and commercialize human antibodies, identified using Immunome’s human hybridoma technology, for the treatment of diseases associated with the formation of bacterial biofilms.

The Licensors are eligible to receive up to $0.4 million in developmental milestone payments, up to $1.5 million in regulatory milestone payments, and up to $0.8 million commercial milestone payments.

In addition, the Licensors are eligible to receive low single digit royalty rates for net product sales, which are subject to adjustment in the event the Company sublicenses the approved technology.

Beginning in June 2022, the Company is subject to annual minimum payments to the Licensors of $20,000, which increases to $30,000 annually in June 2023 and thereafter.

License Agreements

The Company entered into various licensing agreements to further discover, develop and commercialize certain technologies and treatments.

The Company may need to pay developmental and regulatory milestone payments up to approximately $ 2.6 million.

In addition, the Company may need to pay royalty rates and commercial milestone payments for net product sales.

Common stock and convertible preferred stock

The holders of common stock are entitled to one vote for each share of common stock.

Subject to the approval of the majority of shareholders, the holders of common stock shall be entitled to receive dividends out of funds legally available.

In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution.

Subject to the approval of the holders of a majority in interest of the Company’s stockholders entitled to vote thereon, the holders of common stock shall be entitled to receive dividends out of legally available funds.

In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of common stock are entitled to share ratably in the remaining assets of the Company available for distribution.

On August 4, 2021, the Company entered into a consulting agreement that included a cash retainer and an equity grant.

In addition, the consultant purchased 14,115 shares of Immunome from the Company.

On April 28, 2021, the Company sold 1,000,000 units, each unit comprising one share of the Company’s common stock and one Series B Warrant (each, a Series B Warrant) to purchase one-half a share of common stock.

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The fair value of the warrants was estimated using a Black-Scholes Option Pricing Model.

The significant assumptions used in preparing the option pricing model for valuing the Company's warrants to purchase shares of common stock as of April 28, 2021 included (i) volatility of 82.7 %, (ii) risk free interest rate of 0.35 %, (iii) strike price of $ 45.00 er share, (iv) fair value of common stock of $ 28.70 per share, and (v) expected life of three years.

The significant assumptions used in preparing the option pricing model for valuing the Company's warrants to purchase shares of common stock as of April 28, 2021 included (i) volatility of 82.7 %, (ii) risk free interest rate of 0.35 %, (iii) strike price of $ 45.00 per share, (iv) fair value of common stock of $ 28.70 per share, and (v) expected life of three years.

The Series B Warrants are callable by the Company in certain circumstances.

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Series A convertible preferred stock

Prior to the IPO, all of the Company’s convertible preferred stock was classified outside of stockholders’ deficit because the shares contained certain redemption features that were not solely within the control of the Company.

At the time of issuance, the redeemable convertible preferred stock was recorded at its issuance price, less issuance costs.

During the year ended December 31, 2019, the Company sold 512,826 shares of its Series A Preferred at $ 9.00 per share in exchange for $ 4.6 million in gross proceeds and incurred $ 35,000 of related issuance costs and issued 821,657 shares of Series A Preferred in connection with the conversion of the promissory notes of $ 6.8 million.

Prior to the IPO, all of the Company’s Series A convertible preferred stock (“Series A Preferred”) was classified outside of stockholders’ deficit because the shares contained certain redemption features that were not solely within the control of the Company.

At the time of issuance, the Series A Preferred was recorded at its issuance price, less issuance costs.

During the year ended December 31, 2019, the Company sold 512,826 shares of Series A Preferred at $ 9.00 per share in exchange for $ 4.6 million in gross proceeds and incurred $ 35,000 of related issuance costs and issued 821,657 shares of Series A Preferred in connection with the conversion of the promissory notes of $ 6.8 million.

In 2020, the Company completed the sale of an additional 1,226,925 shares of Series A Preferred at $ 9.00 per share, resulting in gross cash proceeds of $ 11.0 million, which includes 4,722 shares issued in January 2020 for gross receipts of $ 45,000 .

During the six months ended June 30, 2020, the Company sold 1,226,925 shares of Series A Preferred for net proceeds of $ 9.5 million and issued 1,035,196 warrants to purchase shares of the Company’s Series A Preferred with a fair value of $ 1.5 million.

During the nine months ended September 30, 2020, the Company sold 1,226,925 shares of Series A Preferred for net

proceeds of $ 9.5 million and issued 1,035,196 warrants to purchase shares of the Company’s Series A Preferred with a fair value of $ 1.5 million.

The warrants were exercisable at any time and had an exercise price of $ 9.00 per share and were to terminate at the earlier of (i) three years from the date of issuance, (ii) upon liquidation of the Company and (iii) upon the Company’s securities trading at $ 27.00 per unit for at least 10 days out of a consecutive 20 -day trading period beginning after the first anniversary of the IPO.

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Upon completion of the IPO on October 6, 2020, the warrants became exercisable for shares of the Company’s common stock and the $ 7.1 million warrant liability was reclassified to additional paid-in capital.

In connection with the Company’s sale of its Series A Preferred in 2015, a future milestone closing provision (the Future Milestone) was included requiring the Company to sell, on the same terms and conditions as the initial offering,

an aggregate of $ 3.5 million of additional Series A Preferred upon achievement of certain development and strategic milestones, as defined in the purchase agreement and at $ 9.00 per share, or 388,888 shares of Series A Preferred.

In connection with the Company’s sale of its Series A Preferred in 2015, a future milestone closing provision (“the Future Milestone”) was included requiring the Company to sell, on the same terms and conditions as the initial offering, an aggregate of $ 3.5 million of additional Series A Preferred upon achievement of certain development and strategic milestones, as defined in the purchase agreement and at $ 9.00 per share, or 388,888 shares of Series A Preferred.

The Future Milestone did not occur and the Company’s obligations under this right terminated upon completion of the Company’s IPO.

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Warrants to acquire shares of common stock

At June 30, 2021 common stock warrants outstanding were as follows:

At September 30, 2021 common stock warrants outstanding were as follows:

Exercise Price per Share

1 unchanged sentence

April 28, 2024

During the six months ended June 30, 2021, 100,695 warrants were exercised and the Company received proceeds of $ 0.9 million and 100,695 shares of the Company’s common stock were issued.

Additionally, 72,320 warrants were cashless exercised during the six months ended June 30, 2021 and 45,322 shares of the Company’s common stock were issued.

During the nine months ended September 30, 2021, 148,653 warrants exercisable for $ 9.00 per share were exercised and the Company received proceeds of $ 1.3 million and 148,653 shares of the Company’s common stock were issued.

Additionally, 72,320 warrants exercisable for $ 9.00 per share were exercised in cashless transactions during the nine months ended September 30, 2021 and 45,322 shares of the Company’s common stock were issued.

Share-based compensation

In July 2008, the board of directors adopted the 2008 Equity Incentive Plan (“the 2008 Plan”) which provided for the grant of qualified incentive stock options and nonqualified stock options, restricted stock or other awards to the Company’s employees, officers, directors, advisors, and outside consultants for the issuance or purchase of shares of the Company’s common stock.

The 2008 Plan was replaced in July 2018 with the Immunome, Inc.

2018 Equity Incentive Plan (the 2018 Plan and collectively with the 2008 Plan, the Plans).

The 2008 Plan was replaced in July 2018 with the 2018 Equity Incentive Plan (“the 2018 Plan and collectively with the 2008 Plan, the Plans”).

At the time that the 2008 Plan was terminated, there were 388,748 shares available for grant that were transferred to the 2018 Plan.

Any additional shares that become available for grant under the 2008 Plan are automatically transferred to and made available for grant under the 2018 Plan.

On September 24, 2020, the 2018 Plan was terminated and replaced with the 2020 Equity Incentive Plan (the 2020 Plan).

Additionally, the number of shares of our common stock reserved for issuance under our 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4 % of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors.

As of June 30, 2021, there were 1,591,121 shares available for future issuance under the 2020 Plan.

Additionally, the number of shares of our common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4 % of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors.

As of September 30, 2021, there were 1,452,147 shares available for future issuance under the 2020 Plan.

The Company also adopted the 2020 Employee Stock Purchase Plan (“the ESPP Plan”) on September 18, 2020 which provides for the grant of purchase rights to purchase shares of the Company’s common stock to eligible employees, as defined by the ESPP Plan.

The maximum number of shares of common stock that may be issued under the ESPP Plan will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1st of each calendar year for a period of up to ten years , commencing on the first January 1st following the year in which an IPO occurs and ending on, and including, January 1, 2030, in an amount equal to the lesser of (i) 1 % of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, and (ii) 1,000,000 shares of common stock.

No awards have been granted under the ESPP Plan as of June 30, 2021.

The 2020 Plan and the ESPP Plan are administered by the board of directors.

No awards have been granted under the ESPP Plan as of September 30, 2021.

The 2020 Plan and the ESPP Plan are administered by the board of directors subject to the board’s right to delegate to a committee.

The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors.

1 unchanged sentence

Vesting periods for awards under the Plans and the 2020 Plan are determined at the discretion of the board of directors.

Incentive stock options and non-statutory stock options granted to employees, officers, members of the board of directors and consultants of the Company typically vest over two to four years .

Stock options granted to employees, officers, members of the board of directors and consultants of the Company typically vest over one to four years .

Certain options provide for accelerated vesting if there is a change in control, as defined in the Plans and the 2020 Plan.

Share-based compensation expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

In thousands)

1 unchanged sentence

General and administrative

Unrecognized compensation cost related to unvested options was $ 12.9 million as of June 30, 2021, and will be recognized over an estimated weighted average period of 3.6 years.

Unrecognized compensation cost related to unvested options was $ 13.5 million as of September 30, 2021, and will be recognized over an estimated weighted average period of 3.4 years.

Stock options

The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:

Six Months Ended June 30,

Nine Months Ended September 30,

Expected volatility

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Fair value of common stock

A summary of option activity during the six months ended June 30, 2021 is as follows:

A summary of option activity during the nine months ended September 30, 2021 is as follows:

exercise price

Outstanding at January 1, 2021

Outstanding at June 30, 2021

Exercisable at June 30, 2021

Vested or expected to vest at June 30, 2021

The weighted-average grant date fair value per share of stock options granted during the six months ended June 30, 2021 and 2020 was $ 18.00 and $ 1.32 , respectively.

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2021 was $ 0.8 million.

The aggregate intrinsic value of stock options outstanding at June 30, 2021 is $ 20.3 million.

In August 2020, the Company granted stock options exercisable for a total of up to 92,169 shares of common stock to two of its officers, which option awards included both performance-based and service-based vesting conditions.

Outstanding at September 30, 2021

Exercisable at September 30, 2021

Vested or expected to vest at September 30, 2021

The weighted-average grant date fair value per share of stock options granted during the nine months ended September 30, 2021 and 2020 was $ 17.77 and $ 0.87 , respectively.

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2021 was $ 3.9 million.

The aggregate intrinsic value of stock options outstanding at September 30, 2021 is $ 27.7 million.

In August 2020, the Company granted stock options exercisable for a total of up to an aggregate of 92,169 shares of common stock to two of its officers, which option awards included both performance-based and service-based vesting conditions.

These option awards were subsequently modified in September 2020 to eliminate the performance-based criteria.

As a result of

the modification, only service-based vesting conditions remained.

As a result of the modification, only service-based vesting conditions remained.

All other terms and conditions of these option awards remain unchanged.

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At the time of the modification, the fair value of these options awards was recalculated at $ 8.69 per option.

Restricted Stock Awards

During August 2021, the Company granted 13,500 fully vested shares of common stock to a consultant in exchange for various strategic and advisory services.

The Company recorded stock-based compensation expense of $ 0.2 million for the three and nine months ended September 30, 2021 related to shares granted.

No such transaction occurred for the three and nine months ended September 30, 2020.

As of September 30, 2021, there was no unvested portion of the restricted stock award as all shares were fully vested upon grant.

Related party transactions

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The Company has entered into license agreements with certain stockholders of the Company, including an additional license agreement in June 2021 with licensors that include one of these stockholders.

Expenses with these related parties were de minimis for each of the three and six months ended June 30, 2021 and 2020, respectively.

There were no amounts owed to these related parties as of June 30, 2021 and December 31, 2020.

Expenses with these related parties were de minimis for each of the three and nine months ended September 30, 2021 and 2020, respectively.

There were no amounts owed to these related parties as of September 30, 2021 and December 31, 2020.

Broadband services agreement

2 unchanged sentences

In June 2021, the Company extended the Broadband MSA to continue through June 2022.

Pursuant to the Broadband MSA, the Company previously issued an aggregate of 827,640 shares of its common stock to Broadband Advisory and has no further obligation to issue additional shares under the Broadband MSA.

The Company recorded $ 0.1 million during each of the three months ended June 30, 2021 and 2020 and $ 0.1 million and $ 0.1 million during the six months ended June 30, 2021 and 2020, respectively, related to the Broadband MSA, which is included in general and administrative expenses in the condensed statements of operations.

Pursuant to the Broadband MSA, the Company previously issued an aggregate of 827,640 shares of its common stock to Broadband Advisory and has no

further obligation to issue additional shares under the Broadband MSA.

The Company recorded $ 0.1 million during each of the three months ended September 30, 2021 and 2020 and $ 0.2 million during the nine months ended September 30, 2021 and 2020, respectively, related to the Broadband MSA, which is included in general and administrative expenses in the condensed statements of operations.

Subsequent events

The Company filed a shelf registration statement on Form S-3, which was declared effective by the SEC on October 14, 2021, pursuant to which the Company may issue from time to time securities with an aggregate price of up to $ 200.0 million.

In October 2021 the Company entered into an ATM Agreement with Jefferies LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell common shares under the registration statement having an aggregate offering price of up to $ 75.0 million through Jefferies acting as sales agent.

The Company has not yet sold any shares under the ATM 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