Immunome Inc. 10-Q

Item 1. Financial Statements. IMMUNOME, INC. Condensed Balance Sheets (In thousands, except share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 December 31, 2021 Assets ​ ​ ​ ​ ​ Current assets: ​ ​ ​ Cash and cash equivalents ​ $ 27,078 ​ $ 49,229 Prepaid expenses and other current assets ​ 2,161 ​ 7,409 Total current assets ​ 29,239 ​ 56,638 Property and equipment, net ​ 704 ​ 855 Operating right-of-use asset, net ​ ​ 171 ​ ​ — Restricted cash ​ 100 ​ 100 Deferred offering costs ​ ​ 332 ​ ​ 332 Total assets ​ $ 30,546 ​ $ 57,925 Liabilities and stockholders’ equity ​ ​ ​ Current liabilities: ​ ​ ​ Accounts payable ​ $ 3,139 ​ $ 3,077 Accrued expenses and other current liabilities ​ 4,230 ​ 6,651 Total current liabilities ​ 7,369 ​ 9,728 Other long-term liabilities ​ ​ 93 ​ ​ 12 Total liabilities ​ 7,462 ​ 9,740 Commitments and contingencies (Note 7) ​ ​ ​ Stockholders’ equity: ​ ​ ​ Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2022 and December 31, 2021, respectively ​ ​ — ​ ​ — Common stock, $ 0.0001 par value; 200,000,000 shares authorized; 12,127,594 and 12,110,373 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively ​ ​ 1 ​ ​ 1 Additional paid-in capital ​ 131,298 ​ 127,289 Accumulated deficit ​ ( 108,215 ) ​ ( 79,105 ) Total stockholders’ equity ​ 23,084 ​ 48,185 Total liabilities and stockholders’ equity ​ $ 30,546 ​ $ 57,925 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 3 Table of Contents IMMUNOME, INC. Condensed Statements of Operations (In thousands, except share and per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2022 2021 2022 2021 Operating expenses: ​ ​ ​ ​ ​ Research and development ​ $ 5,225 ​ $ 4,513 ​ $ 19,020 ​ $ 9,725 General and administrative ​ 3,309 ​ 3,210 ​ 10,094 ​ 7,635 Total operating expenses ​ 8,534 ​ 7,723 ​ 29,114 ​ 17,360 Loss from operations ​ ( 8,534 ) ​ ( 7,723 ) ​ ( 29,114 ) ​ ( 17,360 ) Other income ​ ​ — ​ ​ 6 ​ ​ — ​ ​ 506 Interest income (expense), net ​ 1 ​ ( 3 ) ​ 4 ​ ( 5 ) Net loss ​ $ ( 8,533 ) ​ $ ( 7,720 ) ​ $ ( 29,110 ) ​ $ ( 16,859 ) Deemed dividend arising from warrant modification ​ ​ ( 622 ) ​ ​ — ​ ​ ( 622 ) ​ ​ — Net loss attributable to common stockholders ​ $ ( 9,155 ) ​ $ ( 7,720 ) ​ $ ( 29,732 ) ​ $ ( 16,859 ) Per share information: ​ ​ ​ ​ ​ ​ Net loss per share of common stock, basic and diluted ​ $ ( 0.75 ) ​ $ ( 0.65 ) ​ $ ( 2.45 ) ​ $ ( 1.49 ) Weighted-average common shares outstanding, basic and diluted ​ 12,127,501 ​ 11,934,491 ​ 12,125,947 ​ 11,348,856 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 4 Table of Contents IMMUNOME, INC. Condensed Statements of Changes in Stockholders’ Equity (In thousands, except share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Common stock ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ paid-in ​ Accumulated ​ ​ ​ ​ Shares Amount capital deficit Total Balance at June 30, 2022 12,127,385 ​ $ 1 ​ $ 129,958 ​ $ ( 99,682 ) ​ $ 30,277 Share-based compensation expense — ​ ​ — ​ ​ 1,340 ​ ​ — ​ ​ 1,340 Exercise of stock options ​ 209 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Net loss — ​ ​ — ​ ​ — ​ ​ ( 8,533 ) ​ ​ ( 8,533 ) Balance at September 30, 2022 12,127,594 ​ $ 1 ​ $ 131,298 ​ $ ( 108,215 ) ​ $ 23,084 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Common stock ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ paid-in ​ Accumulated ​ ​ ​ ​ Shares Amount capital deficit Total Balance at January 1, 2022 12,110,373 ​ $ 1 ​ $ 127,289 ​ $ ( 79,105 ) ​ $ 48,185 Share-based compensation expense — ​ ​ — ​ ​ 3,977 ​ ​ — ​ ​ 3,977 Exercise of stock options 17,221 ​ ​ — ​ ​ 32 ​ ​ — ​ ​ 32 Net loss — ​ ​ — ​ ​ — ​ ​ ( 29,110 ) ​ ​ ( 29,110 ) Balance at September 30, 2022 12,127,594 ​ $ 1 ​ $ 131,298 ​ $ ( 108,215 ) ​ $ 23,084 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Common stock ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ paid-in ​ Accumulated ​ ​ ​ ​ Shares Amount capital deficit Total Balance at June 30, 2021 11,812,792 ​ $ 1 ​ $ 124,149 ​ $ ( 63,533 ) ​ $ 60,617 Sale of common stock 14,115 ​ — ​ 262 ​ — ​ 262 Share-based compensation expense ​ — ​ ​ — ​ ​ 1,155 ​ ​ — ​ ​ 1,155 Exercise of common stock warrants 47,958 ​ — ​ 432 ​ — ​ 432 Exercise of stock options and settlement of RSUs 218,468 ​ — ​ ​ 47 ​ — ​ 47 Net loss — ​ — ​ — ​ ( 7,720 ) ​ ( 7,720 ) Balance at September 30, 2021 12,093,333 ​ $ 1 ​ $ 126,045 ​ $ ( 71,253 ) ​ $ 54,793 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Common stock ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ paid-in ​ Accumulated ​ ​ ​ ​ Shares Amount capital deficit Total Balance at January 1, 2021 10,634,245 ​ $ 1 ​ $ 95,738 ​ $ ( 54,394 ) ​ $ 41,345 Sale of common stock and common stock warrants, net of $ 559 in offering costs ​ 1,014,115 ​ ​ — ​ ​ 26,666 ​ ​ — ​ ​ 26,666 Share-based compensation expense — ​ — ​ 2,229 ​ — ​ 2,229 Exercise of common stock warrants 193,975 ​ — ​ 1,338 ​ — ​ 1,338 Exercise of stock options and settlement of RSUs 250,998 ​ — ​ ​ 74 ​ — ​ 74 Net loss — ​ — ​ — ​ ( 16,859 ) ​ ( 16,859 ) Balance at September 30, 2021 12,093,333 ​ $ 1 ​ $ 126,045 ​ $ ( 71,253 ) ​ $ 54,793 ​ ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 5 Table of Contents IMMUNOME, INC. Condensed Statements of Cash Flows (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months ended September 30, ​ 2022 2021 Cash flows from operating activities: ​ ​ ​ Net loss ​ $ ( 29,110 ) ​ $ ( 16,859 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 327 ​ 637 Amortization of right-of-use asset ​ ​ 44 ​ ​ — Share-based compensation ​ 3,977 ​ 2,229 Deferred rent ​ — ​ ( 8 ) Forgiveness of PPP Loan ​ ​ — ​ ​ ( 500 ) Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other assets ​ 5,236 ​ ( 1,819 ) Accounts payable ​ 62 ​ 2,088 Accrued expenses and other current liabilities ​ ( 2,471 ) ​ 2,811 Other long-term liabilities ​ ​ ( 72 ) ​ ​ - Net cash used in operating activities ​ ( 22,007 ) ​ ( 11,421 ) Cash flows from investing activities: ​ ​ ​ Purchases of property and equipment ​ ( 176 ) ​ ( 65 ) Net cash used in investing activities ​ ( 176 ) ​ ( 65 ) Cash flows from financing activities: ​ ​ ​ Proceeds from sale of common stock and common stock warrants ​ ​ — ​ ​ 27,225 Payment from issuance costs related to the sale of common stock and common stock warrants ​ ​ — ​ ​ ( 559 ) Proceeds from exercise of stock options ​ 32 ​ 74 Proceeds from exercise of common stock warrants ​ ​ — ​ ​ 1,338 Payment of offering costs ​ ​ — ​ ​ ( 18 ) Payment of equipment loan payable ​ ​ — ​ ​ ( 97 ) Net cash provided by financing activities ​ 32 ​ 27,963 Net (decrease) increase in cash and cash equivalents and restricted cash ​ ( 22,151 ) ​ 16,477 Cash and cash equivalents and restricted cash at beginning of period ​ 49,329 ​ 39,866 Cash and cash equivalents and restricted cash at end of period ​ $ 27,178 ​ $ 56,343 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures of cash flow information: ​ ​ ​ Operating lease right-of-use asset and lease liability recorded upon adoption of ASC 842 ​ $ 215 ​ $ — Offering costs included in accrued expenses and other current liabilities ​ $ — ​ $ 289 Purchases of property and equipment included in accounts payable ​ $ — ​ $ 2 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 6 Table of Contents IMMUNOME, INC. Notes to Condensed Financial Statements (Unaudited) 1. Nature of the business Organization Immunome, Inc. (“the Company” or “Immunome”) is a clinical stage biopharmaceutical company. The Company was incorporated as a Pennsylvania corporation on March 2, 2006 and was converted to a Delaware corporation on December 2, 2015. The Company is utilizing a proprietary human memory B cell platform to discover and develop first-in-class antibody therapeutics designed to change the way diseases are currently being treated. The Company’s primary focus areas are oncology and infectious disease, including COVID-19. Since its inception, the Company has devoted substantially all its resources to research and development, raising capital, building its management team and extending 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, 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. Liquidity The Company has incurred net losses since inception, including net losses of $ 29.1 million and $ 16.9 million for the nine months ended September 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 September 30, 2022, the Company had an accumulated deficit of $ 108.2 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 filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (“SEC”) on October 14, 2021, pursuant to which the Company may issue from time-to-time securities with an aggregate value of up to $ 200.0 million. The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement. The Company had cash and cash equivalents of $ 27.1 million at September 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; however; more 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 relative to potential programs, products or technologies that it might otherwise seek to progress independently (or enter into these collaborations sooner than it might otherwise have intended to); consider various other strategic alternatives, including a possible merger or sale of the Company; or reduce or cease operations. If the Company engages in collaborations under these circumstances, it may receive lower consideration 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 generally and the biotechnology sector specifically, as well as general economic conditions in the United States may be a significant obstacle to raising the required funds on satisfactory terms, if at all. 7 Table of Contents 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 programs and product candidates become approved drugs and how significant their market share will be, many 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. The Company is also subject to risks and uncertainties as a result of the ongoing COVID-19 pandemic. Although there is uncertainty as to the extent of the continued impact of the COVID-19 pandemic, including the continued impact to capital markets and economies worldwide in the form of economic slowdowns or recession, there has not been a significant impact to the Company’s operations or financial statements to date. 2. Summary of significant accounting policies Basis of presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). Unaudited interim results 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 September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 are unaudited but have been prepared on the same basis as the annual audited financial statements and 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. Condensed balance sheet amounts as of December 31, 2021 have been derived from the audited financial statements as of that date. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. 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 expected volatility used to estimate fair value of stock options and accrued research and development expenses. Estimates and assumptions are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from these estimates. Segment and geographic information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker (the “CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer. The Company views its operations as, and manages its business in, one operating segment operating exclusively in the United States of America. Fair value of financial instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset 8 Table of Contents or liability based on market data obtained from sources independent of the Company. 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. 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: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3 — Unobservable inputs for the asset or liability (i.e.; supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. 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 and restricted cash are Level 1 assets as of September 30, 2022 and December 31, 2021. Restricted cash Restricted cash represents collateral provided for a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate facilities. Cash will be released from restriction upon termination of the lease. Restricted cash was $ 100,000 at both September 30, 2022 and 2021, respectively. The following table provides a reconciliation of the components of cash and cash equivalents and restricted cash presented in the condensed statements of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ September 30, 2022 ​ September 30, 2021 Cash and cash equivalents ​ $ 27,078 ​ $ 56,243 Restricted cash ​ ​ 100 ​ ​ 100 ​ ​ $ 27,178 ​ $ 56,343 ​ Equity issuance costs The Company capitalized costs that were directly associated with establishing the ATM Agreement and shelf registration statement in 2021. These costs will remain capitalized until such financings are consummated, at which time such costs will be recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. Ongoing costs that are directly associated with the ATM Agreement are expensed as incurred. Deferred offering costs were $ 0.3 million as of each of September 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 (“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. 9 Table of Contents 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. 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. 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. Share-based compensation The Company’s share-based compensation program allows for grants of stock options and restricted stock awards. Grants are awarded to employees and non-employees, including directors. The Company accounts for its share-based compensation awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognized compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognized compensation expense on a straight-line basis over the service period. The Company classified share-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. The Company estimates the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of Company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and biopharmaceutical industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The exercise price is the fair value of the common stock as of the measurement date. Net loss per share Basic net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share of common stock is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. 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. 10 Table of Contents The following potentially dilutive securities outstanding as of September 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: ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ 2022 2021 Stock options (1) ​ 2,509,759 ​ 1,936,546 ​ Common stock warrants (1) ​ 1,303,112 ​ 1,314,223 ​ ​ ​ 3,812,871 ​ 3,250,769 ​ (1) Represents common stock equivalents. ​ 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 nine months ended September 30, 2022 and 2021. Leases 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. At the inception of an arrangement, the Company determines whether an arrangement contains a lease based on facts and circumstances present in the arrangement. An arrangement is or contains a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Typically, lessees are required to recognize leases with a term greater than one year on the balance sheet as an operating or finance lease liability and right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company has elected the practical expedient to not recognize leases with a term of 12 months or less. The Company does not have any financing leases as of September 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. Recently adopted accounting standards ​ 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. The Company adopted ASC 842 using the modified retrospective approach. The Company elected the package of practical expedients available for existing contracts, which allowed the Company to carry forward its historical assessments of lease identification, lease classification, and initial direct costs. The Company also elected a policy to not apply the recognition requirements of ASC 842 for short-term leases with a term of 12 months or less. As of January 1, 2022, the effective date, the Company identified one operating lease arrangement relating to the Company’s headquarters facility and one short-term lease relating to laboratory equipment. The adoption of ASC 842 resulted in a recognition of an ROU asset and lease liability of $ 0.2 million on the Company’s condensed balance sheet 11 Table of Contents relating to the leases as of January 1, 2022. The adoption of the standard did not have a material effect on the Company’s condensed statements of operations and condensed statements of cash flows (Note 8). Recently issued accounting pronouncements ​ 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 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. 3. Government assistance programs DoD expense reimbursement contract In July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (as amended, 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 originally made available to the Company under the OTA Agreement 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 $ 0.0 million and $ 5.3 million for the three months ended September 30, 2022 and 2021, respectively, and $ 0.6 million and $ 13.4 million for the nine months ended September 30, 2022 and 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 September 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 $ 0.0 million and $ 2.0 million as of September 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 $ 0.0 and $ 1.6 million as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022, the Company has received $ 17.4 million in expense reimbursement from the DoD under the OTA Agreement. 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 and general and administrative expense of $ 0.0 for the three months ended September 30, 2022 and contra-expense to research and development expense of $ 0.6 million and general administrative expense of $ 0.2 million for the nine months ended September 30, 2022, respectively, in the condensed statements of operations. No such amounts were recognized for the three and nine months ended September 30, 2021. The Company had an employee retention credit receivable balance due from the U.S. Department of Treasury of $ 0.8 million and $ 0.0 in prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets. ​ 12 Table of Contents 4. Prepaid expenses and other assets Prepaid expenses and other assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) September 30, 2022 December 31, 2021 CARES Act employee retention credit receivable ​ $ 847 ​ $ — Research and development advance payments ​ ​ 530 ​ ​ 586 Other prepaids and short-term deposits ​ ​ 324 ​ ​ 492 Reimbursement receivable from DoD ​ ​ 243 ​ ​ 2,674 Prepaid insurance ​ ​ 217 ​ ​ 2,019 Unbilled reimbursement receivable from DoD ​ — ​ 1,638 ​ ​ $ 2,161 ​ $ 7,409 ​ ​ 5. Accrued expenses and other liabilities Accrued expenses and other liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) September 30, 2022 December 31, 2021 Research and development ​ $ 2,514 ​ $ 2,840 Compensation and related benefits ​ ​ 1,367 ​ ​ 1,246 Professional fees ​ 236 ​ 227 Short-term operating lease liability and other liabilities ​ ​ 91 ​ ​ 317 Deferred research obligations ​ ​ 22 ​ ​ 2,021 ​ ​ $ 4,230 ​ $ 6,651 ​ ​ ​ 6. 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. ​ ​ ​ 7. Commitments and contingencies 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. Employee benefit plan The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. 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 each of the three months ended September 30, 2022 and 2021, respectively, and $ 0.2 million and $ 0.1 million for the nine months ended September 30, 2022 and 2021, respectively. 13 Table of Contents Legal proceedings The Company is not a party to any material litigation and does not have contingency reserves established for any litigation liabilities. 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. License agreements 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. In addition, the Company may need to pay royalty rates on net product sales, a portion of certain sublicense and collaboration payments, and certain commercial milestone payments of up to approximately $ 1.5 million, if any. The Company recorded $ 0.0 million and $ 0.1 million in milestone payments during the three and nine months ended September 30, 2022, respectively, in research and development expenses in the condensed statements of operations. No such costs were recorded during the three and nine months ended September 30, 2021, respectively. 8. Leases 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. The Company has an option to extend the lease for up to two additional five-year terms. In December 2021, the Company extended the lease for an additional eighteen-month term ending in March 2024. Beginning July 2021, the Company leased laboratory equipment on a month-to-month basis. In April 2022, the Company terminated the agreement through exercising the option to purchase the leased laboratory equipment under the lease agreement. Supplemental condensed balance sheet information related to leases as of September 30, 2022 was as follows (in thousands): ​ ​ ​ ​ Operating leases: ​ ​ Operating lease right-of-use assets $ 171 ​ ​ ​ Operating lease liability $ 86 Operating lease liability, net of current portion ​ 93 Total operating lease liability $ 179 ​ 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 sheets. ​ 14 Table of Contents Operating lease expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands): ​ ​ ​ ​ ​ Operating lease cost (in thousands) ​ Three Months Ended September 30, 2022 ​ Nine Months Ended September 30, 2022 General and administrative $ 40 $ 57 Research and development ​ 20 ​ 124 Total lease expense $ 60 $ 181 ​ Short term lease expense recorded as research and development expense in the condensed statements of operations for the three and nine months ended September 30, 2022 was $ 0.0 and $ 0.1 million, respectively. Under ASC 840, lease expense was $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2021, respectively. Other information related to the operating lease where the Company is the lessee was as follows: ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 Weighted-average remaining lease term (in years) ​ 1.50 Weighted-average discount rate ​ 9.0 % ​ Supplemental cash flow information related to the operating lease was as follows (in thousands): ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 Cash paid for operating lease liability $ 173 ​ ​ ​ As of September 30, 2022, minimum rental commitments under the operating lease were as follows (in thousands): ​ ​ ​ ​ ​ Years ending December 31, Amount 2022 (represents remaining three months in 2022) ​ $ 61 2023 ​ 246 2024 ​ ​ 63 Total lease payments ​ ​ 370 Less imputed interest ​ ​ ( 191 ) Present value of lease liability ​ $ 179 ​ ​ 9. Common stock Common stock The holders of common stock are entitled to one vote for each share of common stock. 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 are 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 sold 14,115 shares of the Company’s common stock for $ 15.94 per share to a purchaser in accordance with the Stock Purchase Agreement. 15 Table of Contents 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. As described below, in September 2022, the Series B Warrants were modified to reduce the strike price to $ 10.00 per share and to remove the Company’s call right. Warrants to acquire shares of common stock On September 2, 2022, the Company notified holders of the Company’s Series B Warrants (the “Holders”) of the Company’s agreement to permit Holders to exercise the Series B Warrants at an exercise price of $ 10.00 per share (reduced from the previous exercise price of $ 45.00 per share) at any time prior to the expiration date of the Series B Warrants. The Company recognized a deemed dividend of $ 0.6 million, which represents the incremental fair value of the outstanding warrants as a result of the modification. This deemed dividend is recorded in the Company's consolidated statement of operations as an increase to the net loss attributable to common stockholders for purposes of computing net loss per share, basic and diluted. The net impact to the condensed statements of changes in stockholders’ equity was zero because the warrants were equity classified before and after the modification. At September 30, 2022, common stock warrants outstanding were as follows: ​ ​ ​ ​ ​ ​ ​ Warrants ​ Warrants Outstanding Exercise Price per Share ​ Expiration Date Series A ​ 803,112 ​ $ 9.00 ​ June 2, 2023 Series B ​ 500,000 ​ $ 10.00 ​ April 28, 2024 ​ ​ 1,303,112 ​ ​ ​ ​ ​ During nine months ended September 30, 2022, no warrants were exercised. 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. ​ 10. 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 (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 September 30, 2022, there were 1,336,088 shares available for future issuance under the 2020 Plan. 16 Table of Contents 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 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. As of September 30, 2022, there were 352,446 shares available under the ESPP. No shares of common stock have been issued under the ESPP as of September 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 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 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 September 30, Nine Months Ended September 30, ​ 2022 2021 2022 2021 Research and development ​ $ 480 ​ $ 402 ​ $ 1,387 ​ $ 924 General and administrative ​ 860 ​ 753 ​ 2,590 ​ 1,305 ​ ​ $ 1,340 ​ $ 1,155 ​ $ 3,977 ​ $ 2,229 ​ ​ Unrecognized compensation cost related to unvested options was $ 10.5 million as of September 30, 2022 and will be recognized over an estimated weighted average period of 3.1 years. Stock options The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2022 2021 Expected volatility ​ 85.6 % ​ 83.1 % Risk-free interest rate ​ 2.7 % ​ 1.0 % Expected term (in years) ​ 5.97 ​ 6.04 ​ Expected dividend yield ​ — ​ — ​ Fair value of common stock ​ $ 3.64 ​ $ 23.61 ​ ​ ​ 17 Table of Contents A summary of option activity under the Plans and 2020 Plan during the nine months ended September 30, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ average ​ ​ ​ ​ average ​ remaining ​ ​ Number of ​ exercise price ​ contractual ​ ​ shares ​ per share ​ term (years) Outstanding at January 1, 2022 2,005,756 ​ $ 11.26 8.50 Granted 543,900 ​ ​ 3.64 ​ 9.45 Forfeited ( 22,042 ) ​ ​ 12.20 ​ — Expired ​ ( 634 ) ​ ​ 17.96 ​ — Exercised ( 17,221 ) ​ ​ 1.85 ​ 7.34 Outstanding at September 30, 2022 2,509,759 ​ ​ 9.66 ​ 8.12 Exercisable at September 30, 2022 1,111,573 ​ ​ 8.41 ​ 7.41 ​ The weighted-average grant date fair value per share of stock options granted during the nine months ended September 30, 2022 and 2021 was $ 2.65 and $ 17.77 , respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 was $ 0.1 million. The aggregate intrinsic value of stock options outstanding at September 30, 2022 is $ 3.4 million. Restricted stock awards During August 2021, the Company granted 13,500 fully vested restricted stock awards. The Company recorded stock-based compensation expense of $ 0.2 million for the three and nine months ended September 30, 2021 related to the restricted stock awards granted. No such transaction occurred for the three and nine months ended September 30, 2022. 11. Related party transactions 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. Under the Broadband MSA, the Company engages Broadband Capital as a consultant for advice in connection with senior management matters related to the Company’s business, administration and policies in exchange for a cash fee to Broadband Capital of $ 20,000 per month. The Broadband MSA was amended and/or restated in July 2016, January 2017, June 2018, March 2020 and August 2020. In June 2021, the Company extended the Broadband MSA to continue through June 2022. The Broadband MSA expired in June 2022. The Company recorded $ 0.0 million and $ 0.1 million during the three months ended September 30, 2022 and 2021, respectively, and $ 0.1 million and $ 0.2 million during the nine months ended September 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 September 30, 2022 and December 31, 2021, respectively. ​ 18 Table of Contents ​