What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-12 · 142 added, 97 removed, 272 unchanged (47% of the section changed)

3 unchanged sentences

(In thousands, except share data)

March 31, 2022

June 30, 2022

December 31, 2021

18 unchanged sentences

10,000,000 shares authorized;

no shares issued or outstanding at March 31, 2022 and December 31, 2021

no shares issued or outstanding at June 30, 2022 and December 31, 2021, respectively

Common stock, $ 0.0001 par value;

200,000,000 shares authorized;

12,127,385 and 12,110,373 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

12,127,385 and 12,110,373 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

6 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

12 unchanged sentences

Stockholders’ equity

Balance at March 31, 2022

Share-based compensation expense

Balance at June 30, 2022

Stockholders’ equity

Balance at January 1, 2022

1 unchanged sentence

Exercise of stock options

Balance at June 30, 2022

Stockholders’ equity

Balance at March 31, 2021

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

Share-based compensation expense

Exercise of common stock warrants

Exercise of stock options

Balance at June 30, 2021

Stockholders’ equity

Balance at January 1, 2021

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

Share-based compensation expense

1 unchanged sentence

Exercise of stock options

Balance at March 31, 2021

Balance at June 30, 2021

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

2 unchanged sentences

(In thousands)

Three Months ended March 31,

Six Months ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Deferred rent

Forgiveness of PPP Loan

Changes in operating assets and liabilities:

8 unchanged sentences

Cash flows from financing activities:

Proceeds from sale of common stock and common stock warrants

Payment from issuance costs related to the sale of common stock and common stock warrants

Proceeds from exercise of stock options

2 unchanged sentences

Net cash provided by financing activities

Net decrease in cash and cash equivalents and restricted cash

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

Cash and cash equivalents and restricted cash at beginning of period

2 unchanged sentences

Operating lease right-of-use asset and lease liability recorded upon adoption of ASC 842

Offering costs included in accrued expenses and other liabilities

Offering costs included in accounts payable

Fixed assets included in accrued expenses and other current liabilities

Cash paid for interest

Purchases of property plant and equipment included in accounts payable

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

8 unchanged sentences

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 of new technological innovations and products by competitors, 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 $ 11.7 million and $ 3.9 million for the three months ended March 31, 2022 and 2021, 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 March 31, 2022, the Company had an accumulated deficit of $ 90.8 million.

The Company has incurred net losses since inception, including net losses of $ 20.6 million and $ 9.1 million for the six months ended June 30, 2022 and 2021, 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 June 30, 2022, the Company had an accumulated deficit of $ 99.7 million.

On October 1, 2021 the Company entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group 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 Group LLC acting as sales agent.

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

The Company had cash and cash equivalents of $ 42.9 million at March 31, 2022.

The Company had cash and cash equivalents of $ 34.6 million at June 30, 2022.

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;

2 unchanged sentences

consider other various strategic alternatives, 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.

or reduce or cease operations.

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

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.

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

6 unchanged sentences

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 28, 2022.

The accompanying condensed financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 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 June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 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.

26 unchanged sentences

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Cash and cash equivalents are Level 1 assets as of March 31, 2022 and December 31, 2021.

Cash and cash equivalents are Level 1 assets as of June 30, 2022 and December 31, 2021.

Restricted cash

1 unchanged sentence

This lease expires in 2024 at which time the cash will be released from restriction.

Restricted cash was $ 100,000 at both March 31, 2022 and December 31, 2021.

Restricted cash was $ 100,000 at both June 30, 2022 and 2021, respectively.

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

(in thousands)

March 31, 2022

December 31, 2021

June 30, 2022

June 30, 2021

Cash and cash equivalents

3 unchanged sentences

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

Deferred offering costs were $ 0.4 million and $ 0.3 million as of March 31, 2022 and December 31, 2021, respectively, on the condensed balance sheet.

Government contract funding

Ongoing costs that are directly associated with the ATM Agreement are expensed as incurred.

Deferred offering costs were $ 0.3 million and $ 0.3 million as of June 30, 2022 and December 31, 2021, respectively, on the condensed balance sheet.

Government assistance programs

The Company accounts for amounts received under its U.S.

Department of Defense expense reimbursement contract as contra-research and development expenses in the condensed statements of operations.

Department of Defense (“DoD”) expense reimbursement contract as contra-research and development expenses in the condensed statements of operations.

The Company accounts for the employee retention credit received under the U.S.

Department of Treasury Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) as contra-expense to personnel related costs within research and development and general and administrative expenses in the condensed statements of operations.

Research and development costs

Research and development costs are charged to expense as incurred.

Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, share-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, preclinical and clinical development expenses, including manufacture and testing of clinical supplies, consulting and other contracted services.

Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, share-based

compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, preclinical and clinical development expenses, including manufacture and testing of clinical supplies, consulting and other contracted services.

Additionally, under the terms of the license agreements described in Note 7, 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 months ended March 31, 2022 and 2021.

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

3 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 March 31, 2022 and 2021 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 June 30, 2022 and 2021 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

Stock options (1)

2 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 months ended March 31, 2022 and 2021.

Effective January 1, 2022, the Company adopted ASC Topic (ASC 842) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date.

The Company reported a net loss per share of common stock for the three and six months ended June 30, 2022 and 2021.

Effective January 1, 2022, the Company adopted ASU No.

2016-02, Leases (“ASC 842”) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date.

The results for reporting periods beginning after January 1, 2022 are presented in accordance with ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards that were in effect prior to January 1, 2022.

4 unchanged sentences

The Company has elected the practical expedient to not to recognize leases with a term of 12 months or less.

The Company does not have any financing leases as of March 31, 2022.

The Company does not have any financing leases as of June 30, 2022.

Operating lease liabilities and their corresponding right-of-use assets are recorded based on their present value of lease payments over the remaining lease term.

Options to extend the lease term are included in the Company’s assessment of the lease term only if there is a reasonable assessment that the Company will renew.

Leases are discounted to its present value using either the interest rate implicit in the Company’s lease or its incremental borrowing rate, which reflects the fixed rate in which the Company could borrow on a collateralized basis the amount of lease payments in the same currency, for a similar term, in a similar economic environment.

Leases are discounted to its present value using either the interest rate implicit in the Company’s lease or its incremental borrowing rate, which

reflects the fixed rate in which the Company could borrow on a collateralized basis the amount of lease payments in the same currency, for a similar term, in a similar economic environment.

Recently adopted accounting standards

On January 1, 2022, the Company adopted Accounting Standards Update No.

2016-02, Leases (Topic 842) (ASU 2016-02), which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840.

On January 1, 2022, the Company adopted ASC 842, which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840.

The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements.

6 unchanged sentences

Recently issued accounting pronouncements

In November 2021, the FASB issued ASU Topic 832, Disclosures by Business Entities about Government Assistance (“Topic 832”).

In November 2021, the FASB issued ASU Topic 832, Disclosures by Business Entities about Government Assistance (“ASC 832”).

This standard requires annual disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect of the transactions on an entity’s financial statements.

The effective date of Topic 832 is for financial statements issued for annual periods beginning after December 15, 2021.

The Company is currently evaluating the effect Topic 832 will have on its financial statements and related disclosures.

Department of Defense (“DoD”) expense reimbursement contract

The effective date of ASC 832 is for financial statements issued for annual periods beginning after December 15, 2021.

The Company is currently evaluating the effect ASC 832 will have on its financial statements and related disclosures.

Government assistance programs

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 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.

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.

Under the agreement, the DoD shall pay the Company, upon submission of proper invoices, within 30 calendar days of receipt of request for payment.

The Company recorded contra-research and development expense of $ 0.6 million and $ 4.0 million for the three months ended March 31, 2022 and 2021, respectively, in the statements of operations.

The Company had an expense reimbursement receivable balance of $ 0 and $ 2.7 million due from the DoD in prepaid expenses and other current assets as of March 31, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheet.

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

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

Under the OTA Agreement, the DoD is required to pay the Company, upon submission of proper invoices, within 30 calendar days of receipt of request for payment.

The Company recorded contra-research and development expense related to the OTA Agreement of $ 0.01 million and $ 0.6 million for the three and six months ended June 30, 2022, respectively, in the condensed statements of operations.

The Company recorded contra-research and development expense related to the OTA Agreement 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.

The Company had an expense reimbursement receivable balance of $ 0.2 million and $ 2.7 million due from the DoD in prepaid expenses and other current assets as of June 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets.

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.

The Company has a deferred research obligation liability of $ 0.6 million and $ 2.0 million as of March 31, 2022 and December 31, 2021, respectively.

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 in the accompanying condensed balance sheet.

The Company had an unbilled receivable from the DoD of $ 0.8 million and $ 1.6 million as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, the Company has the potential for $ 0.2 million of remaining expense reimbursement under the OTA Agreement.

The Company has a deferred research obligation liability of $ 0.01 million and $ 2.0 million as of June 30, 2022 and December 31, 2021, respectively.

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

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

condensed balance sheets.

The Company had an unbilled receivable from the DoD of $ 0 and $ 1.6 million as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022, the Company has received $ 17.4 million in expense reimbursement from the DoD under the OTA Agreement.

Department of Treasury CARES Act employee retention credit

Under the CARES Act, the Company met eligibility criteria for a $ 0.8 million refundable employee retention credit.

The Company recorded contra-expense to personnel related costs within research and development expense of $ 0.6 million and contra-general administrative expense of $ 0.2 million for the three and six months ended June 30, 2022, respectively, in the condensed statements of operations.

No such amounts were recognized for the three and six months ended June 30, 2021.

The Company had an employee retention credit receivable balance due from the U.S.

Department of Treasury of $ 0.8 million and $ 0 in prepaid expenses and other current assets as of June 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets.

Prepaid expenses and other assets

1 unchanged sentence

(in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

CARES Act employee retention credit receivable

Prepaid insurance

Research and development advance payments

Unbilled reimbursement receivable from DoD

Other prepaids and short-term deposits

Reimbursement receivable from DoD

Unbilled reimbursement receivable from DoD

Accrued expenses and other liabilities

1 unchanged sentence

(in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

2 unchanged sentences

Professional fees

Deferred research obligations

Short-term operating lease liability and other liabilities

Deferred research obligations

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 (“PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act and implemented by the U.S.

Small Business Administration (“SBA”).

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 condensed statements of operations.

Commitments and contingencies

Employment agreements

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

The Company entered into employment agreements (the “Employment Agreements”) with certain 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 (subject to the payment of severance upon certain terminations) and provide for annual pay adjustments and bonuses at the discretion of the Board of Directors.

3 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 $ 0.1 million to the 401(k) Plan for the three months ended March 31, 2022 and 2021, respectively.

The Company made matching contributions of $ 0.1 million to the 401(k) Plan for each of the three and six months ended June 30, 2022 and 2021, respectively.

Legal proceedings

3 unchanged sentences

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

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

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

In addition, the Company may need to pay royalty rates on net product sales and certain commercial milestone payments of up to approximately $ 1.5 million, if any.

Effective January 1, 2022, the Company adopted ASC Topic (ASC 842) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date.

The Company recorded $ 0.1 million milestone payments during the three and six months ended June 30, 2022, respectively, in research and development expenses in the condensed statements of operations.

No such costs were recorded during the three and six months ended June 30, 2021, respectively.

Effective January 1, 2022, the Company adopted ASC 842 using the modified retrospective approach by applying the new standard to all leases existing on the adoption date.

The Company elected the practical expedient to recognize short-term leases under ASC 840.

In May 2017, the Company entered into a 62-month office and laboratory space lease commencing on July 1, 2017 for approximately 11,000 square feet of space in Exton, Pennsylvania.

2 unchanged sentences

Beginning July 2021, the Company leased laboratory equipment on a month-to-month basis.

In April 2022, the Company exercised the purchase option under the lease agreement to purchase the leased laboratory equipment.

The Company elected the practical expedient to recognize short-term leases under ASC 840.

Supplemental balance sheet information related to leases as of March 31, 2022 was as follows (in thousands):

In April 2022, the Company terminated the agreement through exercising the option to purchase the leased laboratory equipment under the lease agreement.

Supplemental balance sheet information related to leases as of June 30, 2022 was as follows (in thousands):

Operating leases:

3 unchanged sentences

Total operating lease liability

Operating lease liability and operating lease liability, net of current portion is included in accrued expenses and other current liabilities and other long-term liabilities, respectively, in the accompanying condensed balance sheet.

Supplemental lease expense related to leases was as follows:

1 unchanged sentence

Statements of Operations Classification

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Operating lease cost

5 unchanged sentences

Total lease expense

Under ASC 840, rent expense for the three months ended March 31, 2021 was approximately $ 0.1 million.

Under ASC 840, rent expense was $ 0.1 million for each of the three and six months ended June 30, 2021, respectively.

Other information related to the operating lease where the Company is the lessee was as follows:

Three Months Ended March 31, 2022

Weighted-average remaining lease term

Six Months Ended June 30, 2022

Weighted-average remaining lease term (in years)

Weighted-average discount rate

Supplemental cash flow information related to the operating lease was as follows (in thousands):

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Cash paid for operating lease liability

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

As of June 30, 2022, minimum rental commitments under the operating lease were as follows (in thousands):

Years ending December 31,

2022 (represents remaining nine months in 2022)

2022 (represents remaining six months in 2022)

Total lease payments

4 unchanged sentences

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 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 of a share of common stock.

The units were issued in a private placement at a price of $ 27.00 per unit for gross proceeds of $ 27.0 million.

The Series B Warrants are equity-classified, exercisable at any time, have an exercise price of $ 45.00 per share and will terminate at three years from the date of issuance.

The fair value of the warrants on the date of issuance was $ 6.0 million.

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 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.

Warrants to acquire shares of common stock

At March 31, 2022, common stock warrants outstanding were as follows:

At June 30, 2022, common stock warrants outstanding were as follows:

Exercise Price per Share

1 unchanged sentence

April 28, 2024

During the six months ended June 30, 2022, no warrants were exercised.

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.

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 non-qualified 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 2018 Equity Incentive Plan (the 2018 Plan and collectively with the 2008 Plan, the Prior 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.

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

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 non-qualified 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 2018 Equity Incentive Plan (2018 Plan and collectively with the 2008 Plan, the “Prior 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.

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 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 the Company’s Board of Directors.

As of March 31, 2022, there were 1,836,212 shares available for future issuance under the 2020 Plan.

The Company also adopted the 2020 Employee Stock Purchase Plan (“ESPP”) 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.

The maximum number of shares of common stock that may be issued under the ESPP will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1 of each calendar year for a period of up to ten year s, commencing on the first January 1 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 31 of the preceding calendar year, and (ii) 1,000,000 shares of common stock.

No shares of common stock have been issued under the ESPP as of March 31, 2022.

As of June 30, 2022, there were 1,313,412 shares available for future issuance under the 2020 Plan.

defined by the ESPP.

The maximum number of shares of common stock that may be issued under the ESPP will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1 of each calendar year for a period of up to ten years , commencing on the first January 1 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 31 of the preceding calendar year, and (ii) 1,000,000 shares of common stock.

No shares of common stock have been issued under the ESPP as of June 30, 2022.

The 2020 Plan and the ESPP 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.

Stock options awarded under the Prior Plans and the 2020 Plan generally expire 10 year s after the grant date unless the Board of Directors sets a shorter term.

Stock options awarded under the Prior Plans and the 2020 Plan generally expire 10 years after the grant date unless the Board of Directors sets a shorter term.

Vesting periods for awards under the Prior Plans and the 2020 Plan are determined at the discretion of the Board of Directors.

Stock options granted to employees, officers, members of the Board of Directors and consultants of the Company typically vest over one to four year s.

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 Prior 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 (in thousands):

Three Months Ended March 31,

(In thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

General and administrative

Unrecognized compensation cost related to unvested options was $ 12.1 million as of March 31, 2022 and will be recognized over an estimated weighted average period of 3.5 years.

Unrecognized compensation cost related to unvested options was $ 12.1 million as of June 30, 2022 and will be recognized over an estimated weighted average period of 3.5 years.

Stock options

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

Three Months Ended March 31,

Six Months Ended June 30,

Expected volatility

3 unchanged sentences

Fair value of common stock

A summary of option activity under the Plans and 2020 Plan during the three months ended March 31, 2022 is as follows:

A summary of option activity under the Plans and 2020 Plan during the six months ended June 30, 2022 is as follows:

exercise price

Outstanding at January 1, 2022

Outstanding at March 31, 2022

Exercisable at March 31, 2022

Vested or expected to vest at March 31, 2022

The weighted-average grant date fair value per share of stock options granted during the three months ended March 31, 2022 and 2021 was $ 7.52 and $ 22.46 , respectively.

The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2022 was $ 0.1 million.

The aggregate intrinsic value of stock options outstanding at March 31, 2022 is $ 4.0 million.

Outstanding at June 30, 2022

Exercisable at June 30, 2022

Vested or expected to vest at June 30, 2022

The weighted-average grant date fair value per share of stock options granted during the six months ended June 30, 2022 and 2021 was $ 2.65 and $ 18.00 , respectively.

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2022 was $ 0.1 million.

The aggregate intrinsic value of stock options outstanding at June 30, 2022 is $ 1.8 million.

Related party transactions

1 unchanged sentence

The Company has entered into license agreements with certain stockholders of the Company.

Expenses with these related parties were de minimis for the three months ended March 31, 2022 and 2021, respectively.

In addition, amounts owed to these related parties were de minimis as of March 31, 2022 and December 31, 2021.

Expenses with these related parties were de minimis for the three and six months ended June 30, 2022 and 2021, respectively.

In addition, amounts owed to these related parties were de minimis as of June 30, 2022 and December 31, 2021.

Broadband services agreement

In November 2015, the Company entered into a management services agreement (MSA) with BCM Advisory Partners LLC and Broadband Capital Partners LLC (collectively Broadband Capital).

In November 2015, the Company entered into a management services agreement (the “Broadband MSA”) with BCM Advisory Partners LLC and Broadband Capital Partners LLC (collectively “Broadband Capital”).

Certain directors of the Company are principals of Broadband Capital.

2 unchanged sentences

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

The Company recorded $ 0.1 million during each of the three months ended March 31, 2022 and 2021, respectively, related to the Broadband MSA, which is included in general and administrative expenses in the condensed statements of operations.

There were no amounts due to Broadband Capital as of March 31, 2022 and December 31, 2021.

The Company recorded $ 0.1 million during each of the three and six months ended June 30, 2022 and 2021, respectively, related to the Broadband MSA, which is included in general and administrative expenses in the condensed statements of operations.

Amounts due to Broadband Capital were $ 0.1 million and $ 0 as of June 30, 2022 and December 31, 2021, respectively.

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