MiNK Therapeutics, Inc. 10-Q

Item 1. Financial Statements. MINK THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, 2021 December 31, 2020 ASSETS Cash $ 819,450 $ 2,691,156 Prepaid expenses 13,228 492,060 Other current assets 2,608,870 913,578 Total current assets 3,441,548 4,096,794 Equipment, net of accumulated depreciation of $ 147,017 and $ 98,160 at September 30, 2021 and December 31, 2020, respectively 635,887 458,384 Total assets $ 4,077,435 $ 4,555,178 LIABILITIES AND STOCKHOLDERS’ DEFICIT Accounts payable $ 1,648,155 $ 3,141,844 Accrued liabilities 3,084,621 1,859,067 Other current liabilities 5,377,596 5,690,796 Convertible affiliated note, current 65,423,496 — Due to related parties 5,027,095 3,530,589 Total current liabilities 80,560,963 14,222,296 Convertible affiliated note, non-current — 43,824,000 Other long-term liabilities 27,543 383,058 Commitments and contingencies STOCKHOLDERS’ DEFICIT Common stock, par value $ 0.00001 per share; 35,000,000 shares authorized; 24,219,058 and 24,177,313 shares issued at September 30, 2021 and December 31, 2020, respectively 242 242 Additional paid-in capital 1,461,557 383,712 Accumulated other comprehensive loss ( 789,336 ) ( 1,523,038 ) Accumulated deficit ( 77,183,534 ) ( 52,735,092 ) Total stockholders’ deficit ( 76,511,071 ) ( 53,874,176 ) Total liabilities and stockholders’ deficit $ 4,077,435 $ 4,555,178 See accompanying notes to unaudited condensed consolidated financial statements. 1 MINK THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating expenses: Research and development $ 3,334,126 $ 2,503,942 $ 10,016,449 $ 8,721,233 General and administrative 814,881 466,861 2,277,759 1,596,081 Change in fair value of convertible affiliated note 9,227,427 2,953,242 9,702,863 2,795,329 Operating loss ( 13,376,434 ) ( 5,924,045 ) ( 21,997,071 ) ( 13,112,643 ) Other income (expense), net: Interest expense ( 881,323 ) ( 639,026 ) ( 2,430,067 ) ( 1,754,118 ) Gain on extinguishment of debt 355,515 — 355,515 — Other income (expense), net ( 364,844 ) 519,878 ( 376,819 ) 162,890 Net loss $ ( 14,267,086 ) $ ( 6,043,193 ) $ ( 24,448,442 ) $ ( 14,703,871 ) Per common share data: Basic and diluted net loss per common share $ ( 0.59 ) $ ( 0.25 ) $ ( 1.01 ) $ ( 0.61 ) Weighted average number of common shares outstanding 24,205,446 24,120,669 24,186,794 24,092,235 Other comprehensive loss: Foreign currency translation gain (loss) $ 546,111 $ ( 803,501 ) $ 733,702 $ ( 353,168 ) Comprehensive loss $ ( 13,720,975 ) $ ( 6,846,694 ) $ ( 23,714,740 ) $ ( 15,057,039 ) See accompanying notes to unaudited condensed consolidated financial statements. 2 MINK THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited) Common Stock Accumulated Number of Shares Par Value Additional Paid-In Capital Other Comprehensive Income (Loss) Accumulated Deficit Total Balance at December 31, 2020 24,177,313 $ 242 $ 383,712 $ ( 1,523,038 ) $ ( 52,735,092 ) ( 53,874,176 ) Net loss — — — — ( 3,846,194 ) ( 3,846,194 ) Other comprehensive income — — — 353,305 — 353,305 Grant and recognition of stock options — — 263,081 — — 263,081 Recognition of parent stock options — — 19,949 — — 19,949 Balance at March 31, 2021 24,177,313 $ 242 $ 666,742 $ ( 1,169,733 ) $ ( 56,581,286 ) $ ( 57,084,035 ) Net loss — — — — ( 6,335,162 ) ( 6,335,162 ) Other comprehensive loss — — — ( 165,714 ) — ( 165,714 ) Grant and recognition of stock options — — 356,097 — — 356,097 Recognition of parent stock options — — 51,206 — — 51,206 Balance at June 30, 2021 24,177,313 $ 242 $ 1,074,045 $ ( 1,335,447 ) $ ( 62,916,448 ) $ ( 63,177,608 ) Net loss — — — — ( 14,267,086 ) ( 14,267,086 ) Other comprehensive income — — — 546,111 — 546,111 Grant and recognition of stock options — — 365,760 — — 365,760 Recognition of parent stock options — — 21,602 — — 21,602 Option exercises 41,745 — 150 — — 150 Balance at September 30, 2021 24,219,058 $ 242 $ 1,461,557 $ ( 789,336 ) $ ( 77,183,534 ) $ ( 76,511,071 ) 3 MINK THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited) Common Stock Accumulated Number of Shares Par Value Additional Paid-In Capital Other Comprehensive Income (Loss) Accumulated Deficit Total Balance at December 31, 2019 24,059,035 $ 241 $ 294,783 $ ( 132,590 ) $ ( 36,496,194 ) $ ( 36,333,760 ) Net loss — — — — ( 4,392,547 ) ( 4,392,547 ) Other comprehensive income — — — 635,905 — 635,905 Grant and recognition of stock options — — 400 — — 400 Recognition of parent stock options — — 29,530 — — 29,530 Option exercises 27,830 1 399 — — 400 Balance at March 31, 2020 24,086,865 $ 242 $ 325,112 $ 503,315 $ ( 40,888,741 ) $ ( 40,060,072 ) Net loss — — — — ( 4,268,131 ) ( 4,268,131 ) Other comprehensive income — — — ( 185,571 ) — ( 185,571 ) Grant and recognition of stock options — — 244 — — 244 Recognition of parent stock options — — 12,635 — — 12,635 Option exercises 10,436 — 150 — — 150 Balance at June 30, 2020 24,097,301 $ 242 $ 338,141 $ 317,744 $ ( 45,156,872 ) $ ( 44,500,745 ) Net loss — — — — ( 6,043,193 ) ( 6,043,193 ) Other comprehensive income — — — ( 803,502 ) — ( 803,502 ) Grant and recognition of stock options — — 347 — — 347 Recognition of parent stock options — — 10,407 — — 10,407 Option exercises 24,351 — 350 — — 350 Balance at September 30, 2020 24,121,652 $ 242 $ 349,245 $ ( 485,758 ) $ ( 51,200,065 ) $ ( 51,336,336 ) See accompanying notes to unaudited condensed consolidated financial statements. 4 MINK THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss $ ( 24,448,442 ) $ ( 14,703,871 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 54,126 38,923 Share-based compensation 1,077,695 53,563 Interest accrued on convertible affiliated note 2,430,067 1,754,118 Gain on extinguishment of debt ( 355,515 ) — Change in fair value of convertible affiliated note 9,702,863 2,795,329 Changes in operating assets and liabilities: Prepaid expenses 477,755 ( 102,398 ) Accounts payable ( 1,504,911 ) 1,796,245 Accrued liabilities and other current liabilities 1,224,729 ( 1,195,487 ) Repayable advance received — 1,774,788 Other operating assets and liabilities 216,799 1,168,711 Net cash used in operating activities ( 11,124,834 ) ( 6,620,079 ) Cash flows from investing activities: Purchases of plant and equipment ( 249,260 ) ( 95,212 ) Net cash used in investing activities ( 249,260 ) ( 95,212 ) Cash flows from financing activities: Proceeds from option exercises 150 900 Proceeds from the issuance of long-term debt — 355,515 Proceeds from issuance of convertible affiliated note 9,459,422 7,415,150 Net cash provided by financing activities 9,459,572 7,771,565 Effect of exchange rate changes on cash 42,816 ( 68,274 ) Net (decrease) increase in cash ( 1,871,706 ) 988,000 Cash, beginning of period 2,691,156 299,036 Cash, end of period $ 819,450 $ 1,287,036 See accompanying notes to unaudited condensed consolidated financial statements. 5 MINK THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Description of Business MiNK Therapeutics, Inc. (MiNK or the Company) is a clinical stage biopharmaceutical company focused on developing allogeneic invariant natural killer T (iNKT) cell therapies to treat cancer and other life-threatening illnesses. The Company has incurred losses since inception and, as of September 30, 2021, had an accumulated deficit of $ 77.2 million. Since inception until the completion of the Company’s initial public offering (see Note 13 to the Unaudited Interim Condensed Consolidated Financial Statements), the Company financed its operations primarily through funding from Agenus Inc. (Agenus), its parent company. MiNK expects to continue incurring operating losses and negative cash flows for the foreseeable future. Based on the Company’s current plans and projections, MiNK believes its quarter end cash balance, plus the proceeds received from its initial public offering, will be sufficient to satisfy its liquidity requirements for more than one year from when these financial statements were issued. Management continually addresses the Company’s liquidity position and adjusts spending as needed in order to preserve liquidity. The Company’s future liquidity needs will be determined primarily by the success of its operations with respect to the progression of the Company’s product candidates and key development and regulatory events in the future. Potential sources of additional funding for the Company include: (1) pursuing collaboration, out-licensing and/or partnering opportunities for the Company’s portfolio programs and product candidates with one or more third parties, (2) securing additional debt financing and/or (3) selling equity securities. MiNK’s product candidates are in various stages of development and significant additional expenditures will be required if the Company starts new trials, encounters delays in its programs, applies for regulatory approvals, continues development of its technologies, expands its operations, and/or brings its product candidates to market. The eventual total cost of each clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, and number of patients. The process of obtaining and maintaining regulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because all of the Company’s programs are at an early stage of clinical development, the Company is unable to reliably estimate the cost of completing its research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence. (2) Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the years ended December 31, 2020 and 2019 (annual financial statements), included in the Company’s Amended Registration Statement on Form S-1 filed with the Securities and Exchange Commission (SEC) on October 12, 2021. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual consolidated financial statements. In the opinion of the Company’s management, the condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the Company’s financial position and operating results. All significant intercompany transactions and accounts have been eliminated in consolidation. Operating results for the nine months ended September 30, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates. For the Company’s foreign subsidiaries, the local currency is the functional currency. Assets and liabilities of its foreign subsidiaries are translated into U.S. dollars using rates in effect at the balance sheet date while expenses are translated into U.S. dollars using average exchange rates during the period. The cumulative translation adjustment resulting from changes in exchange rates are included in the condensed consolidated balance sheets as a component of accumulated other comprehensive loss in total stockholders’ deficit. 6 (3) Net Loss Per Share Basic income and loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding. Diluted income per common share is calculated by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding instruments such as stock options. Because the Company reported a net loss for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share. Therefore, the following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as of September 30, 2021 and 2020, as they would be anti-dilutive: Three and Nine Months Ended September 30, 2021 2020 Stock options 4,911,263 2,713,425 Non-vested shares 695,750 — (4) Other Current Assets Other current assets consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 VAT receivable $ 35 $ 20 Insurance recovery — 234 Deferred offering costs 2,563 539 Other 11 121 Total $ 2,609 $ 914 (5) Accrued and Other Current Liabilities Accrued liabilities consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Payroll $ 360 $ 240 Professional fees 1,820 1,186 Research services 905 66 VAT — 324 Other — 43 Total $ 3,085 $ 1,859 Other current liabilities of $ 5.4 million and $ 5.7 million as of September 30, 2021 and December 31, 2020, respectively, consisted entirely of the repayable advance received under the Company’s research and development agreement with the Belgium Walloon Region Government. During 2020, the Company discontinued research efforts related to this program and is evaluating its options in accordance with the terms of the agreement. (6) Share-based Compensation Plans The Company’s 2018 Equity Incentive Plan provided for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, nonstatutory stock options, restricted stock, unrestricted stock and other equity-based awards, such as stock appreciation rights, and stock units including restricted stock units for up to 13,915,000 shares of the Company’s common stock (subject to adjustment in the event of stock splits and other similar events). In September 2021, the Company’s stockholders approved the 2021 Equity Incentive Plan (2021 Plan). The 2021 Plan provides for the granting of equity-based awards to the Company’s employees, directors and consultants. The provisions of the plan allow for automatic annual increases for the shares reserved under the 2021 Plan. In September 2021, the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (2021 ESPP). The 2021 ESPP initially provides for the issuance of up to 375,000 shares of common stock to employees. The provisions of the 2021 ESPP provide for automatic annual increases for shares reserved under the 2021 ESPP. 7 The Company primarily uses the Black-Scholes option pricing model to value options granted to employees and non-employees, as well as options granted to members of the Company’s Board of Directors. All stock option grants have 10-year terms and generally vest ratably over a 3 or 4-year period. A summary of option activity for the nine-month period ended September 30, 2021 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2020 2,713,425 $ 0.01 Granted 2,239,583 3.03 Exercised ( 41,745 ) 0.01 Outstanding at September 30, 2021 4,911,263 $ 1.38 8.7 $ 8,076,285 Vested or expected to vest at September 30, 2021 4,911,263 $ 1.38 8.7 $ 8,076,285 Exercisable at September 30, 2021 1,469,656 $ 0.09 8.1 $ 4,451,743 The weighted average grant-date fair values of options granted during the nine-month period ended September 30, 2021 was $ 1.76 . During the nine-month period ended September 30, 2021, all options were granted with exercise prices equal to the market value of the underlying shares of common stock on the grant date. As of September 30, 2021, there was $ 3.0 million of unrecognized share-based compensation expense related to these stock options which, if all milestones are achieved, will be recognized over a weighted average period of 2.4 years. A summary of non-vested stock activity for the nine-month period ended September 30, 2021 is presented below: Nonvested Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2020 55,660 $ 0.01 Granted 695,750 3.03 Outstanding at September 30, 2021 751,410 $ 2.81 As of September 30, 2021, there was $ 2.1 million of unrecognized share-based compensation expense related to these non-vested shares which will be recognized over a weighted average period of 2.0 years. Stock based compensation expense also includes expense related to awards to employees of the Company from the Agenus 2019 Equity Incentive Plan. The impact on the Company’s results of operations from share-based compensation for the three and nine months ended September 30, 2021 and 2020, was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Research and development $ 50,895 $ 10,537 $ 136,173 $ 33,130 General and administrative 336,467 217 941,522 20,433 Total share-based compensation expense $ 387,362 $ 10,754 $ 1,077,695 $ 53,563 (7) Related Party Transactions Until the completion of its initial public offering, the Company relied on Agenus for all of its working capital requirements. For the periods presented, certain of the Company’s operations were fully integrated with Agenus, including, but not limited to, corporate functions such as finance, human resources, information technology and legal functions. The Company’s consolidated financial statements reflect the costs of doing business related to these operations. In September 2021, the Company entered into a new Intercompany General & Administrative Services Agreement with Agenus (the New Intercompany Services Agreement). Pursuant to the New Intercompany Services Agreement, Agenus provides MiNK with 8 administrative support, including, without limitation, financial, legal, information technology and human resources administrative support and non-administrative services as may be agreed to between the parties from time to time. Agenus provides the services under the New Intercompany Service s Agreement on a cost-plus basis and the Company is required to pay 105 % of Agenus’ costs. Under the New Intercompany Service s Agreement, the Company is also entitled to use Agenus’ business offices and laboratory space and equipment in exchange for the Company contributing a proportionate payment for the use of such facilities and equipment. Either party may terminate the New Intercompany Service s Agreement upon 30 days ’ prior written notice. Allocated Agenus services primarily include payroll related expenses, facility costs and stock-based compensation and are included in the accompanying financial statements based on certain estimates and allocations. The allocation methods primarily include time devoted to activities and headcount-based allocations. Agenus business services and occupancy costs are allocated to the Company based on the Company’s headcount as a percentage of Agenus’. Under the prior intercompany services agreement between Agenus and MiNK, research services were charged between the entities based on hours spent on specific projects applied to hourly wage rates. As such, these allocations may not be indicative of the actual amounts that would have been recorded had the Company operated as an independent, publicly traded company for the periods presented. Allocation of Agenus Services, net of approximately $ 529,000 and $ 294,000 for the three months ended September 30, 2021 and 2020, respectively, and $ 1.7 million and $ 928,000 for the nine months ended September 30, 2021 and 2020, respectively, is included in Operating expenses in the Company’s statement of operations and Due to related parties in the Company’s consolidated balance sheet. In February 2021, the Company entered into a fifth Convertible Promissory Note (the Note) with Agenus with terms identical to the convertible promissory note, as amended, issued to Agenus on April 1, 2019, increasing the amount of borrowing capacity to up to $ 50.0 million and extending the maturity to July 1, 2022. In September 2021, the Company entered into an amendment to the convertible promissory note with Agenus to provide, among other things, that the Note would automatically convert into the Company’s common stock upon the completion of the Company’s initial public offering. The Note had a principal balance of $ 45.5 million at September 30, 2021. In accordance with the terms of the Note, interest was computed on the basis of a 360-day year at 8 % and accrued but was not payable until converted or paid. The Note was automatically converted, at a rate equal to the quotient obtained by dividing (i) the amount due on the date of conversion by (ii) 80 % of the per share price of the Company’s common stock sold in the Company’s initial public offering, into 5,451,958 shares of the Company’s common stock upon completion of the initial public offering on October 19, 2021. In September 2021, the Company entered into a new Intellectual Property Assignment and License Agreement with Agenus (the New Assignment and License Agreement), upon which the prior intercompany agreement between Agenus and MiNK was terminated. Pursuant to the New Assignment and License Agreement, Agenus assigned to the Company certain patent rights and know-how related to its iNKT product candidates and other patents and know-how related to its business. In addition to the patent rights assigned to the Company by Agenus, the Company also received an exclusive, royalty-free, sublicensable license to research, develop, manufacture and commercialize certain licensed technology in the field. The New Assignment and License Agreement further provides for the Company to grant Agenus a field-limited, non-exclusive, royalty-free license under the assigned patent rights, subject to MiNK’s discretion and provided such access would not reasonably result in a disruption of planned MiNK activities. Agenus has also agreed to provide the Company with Agenus’ biological material upon written request in order for the Company to use such material in its development activities of a combination therapy. Agenus may withhold the transfer of biological material, including, but not limited to, checkpoint modulating antibodies, for various reasons, including if such transfer would reasonably result in a disruption of planned Agenus activities. For any materials Agenus does share with the Company, the parties have agreed to enter into a separate agreement governing the transfer and providing for joint ownership of the data. Agenus has agreed that during the full term of the New Assignment and License Agreement, and for three years thereafter, it will not develop, manufacture or commercialize an iNKT cell therapy, directly or indirectly by transferring such technology. The Company has the sole responsibility to develop, manufacture and commercialize products under this New Assignment and License Agreement. The Company may terminate the New Assignment and License Agreement without cause upon 90 days’ prior written notice to Agenus. Either party may terminate if they believe there has been a material breach which has not been cured within 90 days (or 45 days for breach of payment obligations) of receiving such notice . (8) Other Long-term Liabilities In May 2020, the Company entered into a promissory note with Bank of America, NA for aggregate loan proceeds of $ 356,000 (the Loan) under the Small Business Administration (the SBA) Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the CARES Act). In September 2021, the Company received notification that its forgiveness application was approved. As such, in the quarter ending September 30, 2021, the Loan was extinguished, and a $ 356,000 gain was recorded in the accompanying condensed consolidated statements of operations and comprehensive loss. 9 (9) Fair Value Measurement The Company measured the Note at fair value. The fair value of the Note at September 30, 2021 and December 31, 2020 was $ 65.4 million and $ 43.8 million, respectively, based on the Level 2 valuation hierarchy of the fair value measurements standard using a scenario based present value methodology that was derived by evaluating the nature and terms of the Note and considering the prevailing economic and market conditions at the balance sheet date. The principal amount of the Note at September 30, 2021 and December 31, 2020, was $ 45.5 million and $ 36.1 million, respectively. (10) Equity In September 2021, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, to increase the number of authorized shares of common stock to 35,000,000 . In September 2021, the Company effected a 2.783 -for-one split of the Company’s common stock. All common share, per share and related information included in the accompanying financial statements have been adjusted retroactively, where applicable, to reflect the split. (11) Contingencies The Company may currently be, or may become, a party to legal proceedings. While the Company currently believes that the ultimate outcome of any of these proceedings will not have a material adverse effect on its financial position, results of operations, or liquidity, litigation is subject to inherent uncertainty and consumes both cash and management attention. (12) Recent Accounting Pronouncements Recently Issued and Adopted In December 2019, the Financial Accounting Standards Board (FASB) issued ASU No. 2019-12, Income Taxes (Topic 740): simplifying the Accounting for Income Taxes. This ASU enhances and simplifies multiple aspects of the income tax accounting guidance in ASC 740. The Company adopted the standard on January 1, 2021. The adoption did not have a material impact on the Company’s consolidated financial statements. No other new accounting pronouncement issued or effective during the nine months ended September 30, 2021 had or is expected to have a material impact on the Company’s consolidated financial statements or disclosures. (13) Subsequent Events In October 2021, the Company completed an initial public offering of 3,333,334 shares of its common stock, at a public offering price of $ 12.00 per share. The gross proceeds from the offering, before deducting underwriting discounts and commissions and other offering expenses, were approximately $ 46.0 million, which includes the exercise of the underwriters option to acquire an additional 500,000 shares at the public offering price, which shares were delivered on November 3, 2021. Subsequent to the completed offering, the Company continued to be majority owned by Agenus. In October 2021, in connection of the completion of the Company’s initial public offering, the Convertible Promissory Note was automatically converted into 5,451,958 shares of the Company’s common stock. In October 2021, also in connection with the completion of the Company’s initial public offering, the Company’s authorized capital stock increased to 155,000,000 shares, all with a par value of $ 0.00001 per share, of which: • 150,000,000 shares are designated as common stock; and • 5,000,000 shares are designated as preferred stock. 10