What changed in this filing

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Item 1. Financial Statements

2022-05-13 compared with 2021-11-29 · 82 added, 136 removed, 143 unchanged (60% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Cash and cash equivalents

Prepaid expenses

2 unchanged sentences

Equipment, net of accumulated depreciation of $ 193,217 and $ 168,605 at

September 30, 2021 and December 31, 2020, respectively

LIABILITIES AND STOCKHOLDERS’ DEFICIT

March 31, 2022 and December 31, 2021, respectively

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable

1 unchanged sentence

Other current liabilities

Convertible affiliated note, current

Due to related parties

Total current liabilities

Convertible affiliated note, non-current

Other long-term liabilities

Commitments and contingencies

STOCKHOLDERS’ DEFICIT

STOCKHOLDERS’ EQUITY

Common stock, par value $ 0.00001 per share;

150,000,000 shares authorized;

24,219,058 and 24,177,313 shares issued at September 30, 2021

33,560,914 and 33,476,523 shares issued at March 31, 2022

and December 31, 2021, respectively

2 unchanged sentences

Accumulated deficit

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

3 unchanged sentences

Operating loss

Other income (expense), net:

Interest expense

Gain on extinguishment of debt

Other income (expense), net

Other expense, net:

Interest expense, net

Other expense, net

Per common share data:

1 unchanged sentence

Weighted average number of common shares outstanding

Other comprehensive loss:

Foreign currency translation gain (loss)

Other comprehensive income:

Foreign currency translation gain

Comprehensive loss

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Comprehensive

2 unchanged sentences

Other comprehensive income

Option exercises

Grant and recognition of stock options

1 unchanged sentence

Balance at March 31, 2022

Other comprehensive loss

Grant and recognition of stock options

Recognition of parent stock options

Balance at June 30, 2021

Other comprehensive income

Grant and recognition of stock options

Recognition of parent stock options

Option exercises

Balance at September 30, 2021

MINK THERAPEUTICS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Comprehensive

4 unchanged sentences

Recognition of parent stock options

Option exercises

Balance at March 31, 2021

Other comprehensive income

Grant and recognition of stock options

Recognition of parent stock options

Option exercises

Balance at June 30, 2020

Other comprehensive income

Grant and recognition of stock options

Recognition of parent stock options

Option exercises

Balance at September 30, 2020

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

2 unchanged sentences

Interest accrued on convertible affiliated note

Gain on extinguishment of debt

Change in fair value of convertible affiliated note

3 unchanged sentences

Accrued liabilities and other current liabilities

Repayable advance received

Other operating assets and liabilities

5 unchanged sentences

Proceeds from option exercises

Proceeds from the issuance of long-term debt

Proceeds from issuance of convertible affiliated note

1 unchanged sentence

Effect of exchange rate changes on cash

Net (decrease) increase in cash

Cash, beginning of period

Cash, end of period

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental cash flow information:

Cash paid for interest

Supplemental disclosures - non-cash activities:

Purchases of plant and equipment in accounts payable and accrued liabilities

See accompanying notes to unaudited condensed consolidated financial statements.

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NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Description of Business

(1) Business and Liquidity

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.

(“MiNK” or the “Company”) is a clinical stage biopharmaceutical company pioneering the discovery, development and commercialization of allogeneic, off-the-shelf, invariant natural killer T (“iNKT”) cell therapies to treat cancer and other immune-mediated diseases.

iNKT cells are a distinct T cell population that combine durable memory responses with the rapid cytolytic features of natural killer cells.

iNKT cells offer distinct therapeutic advantages as a platform for allogeneic therapy in that the cells naturally home to tissues, aid clearance of tumors and infected cells and suppress graft-versus-host-disease.

MiNK’s proprietary platform is designed to facilitate scalable and reproducible manufacturing for off-the-shelf delivery.

As such, the Company believes that its approach represents a highly versatile application for therapeutic development in cancer and immune diseases.

MiNK is leveraging its platform and manufacturing capabilities to develop a wholly owned or exclusively licensed pipeline of both native and engineered iNKT cells.

Since inception, in 2017, until the completion of the Company’s initial public offering (“IPO”), the Company financed its operations primarily through funding from Agenus Inc.

(“Agenus”), its parent company.

The Company has incurred losses since inception and, as of March 31, 2022, had an accumulated deficit of $ 90.7 million.

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.

Based on the Company’s current plans and projections, MiNK believes its cash and cash equivalents balance as of March 31, 2022 of $ 34.7 million 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.

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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.

(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 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.

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(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.

The Company’s significant accounting policies are disclosed in the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 18, 2022.

Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies.

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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.

Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

The preparation of consolidated financial statements in conformity with U.S.

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(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.

Basic loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding.

Diluted loss per common share is calculated by dividing net loss 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,

Therefore, the following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as of March 31, 2022 and 2021, as they would be anti-dilutive:

Three Months Ended March 31,

Stock options

Non-vested shares

(4) Other Current Assets

Other current assets consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):

September 30,

VAT receivable

Insurance recovery

Deferred offering costs

(4) Investments

Cash equivalents consisted of the following as of March 31, 2022 (in thousands):

March 31, 2022

Estimated Fair Value

Institutional money market funds

(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,

Accrued liabilities consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

Professional fees

Research services

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.

Other current liabilities of $ 5.2 million and $ 5.3 million as of March 31, 2022 and December 31, 2021, respectively, represent 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.

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:

A summary of option activity for the three-month period ended March 31, 2022 is presented below:

Outstanding at December 31, 2021

Outstanding at September 30, 2021

Vested or expected to vest at September 30, 2021

Exercisable at September 30, 2021

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:

Outstanding at March 31, 2022

Vested or expected to vest at March 31, 2022

Exercisable at March 31, 2022

The weighted average grant-date fair values of options granted during the three-month period ended March 31, 2022, was $ 2.15 .

During the three-month period ended March 31, 2022, 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 March 31, 2022, there was $ 6.4 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 3.1 years.

A summary of non-vested stock activity for the three-month period ended March 31, 2022 is presented below:

Outstanding at December 31, 2021

Outstanding at September 30, 2021

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.

Outstanding at March 31, 2022

As of March 31, 2022, there was $ 1.6 million of unrecognized share-based compensation expense related to these non-vested shares which will be recognized over a weighted average period of 1.5 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:

The impact on the Company’s results of operations from share-based compensation for the three months ended March 31, 2022 and 2021, was as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

2 unchanged sentences

(7) Related Party Transactions

Until the completion of its initial public offering, the Company relied on Agenus for all of its working capital requirements.

Until the completion of its IPO, 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

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.

The Company’s consolidated financial statements reflect all costs of doing business related to these operations.

In September 2021, the Company entered into an 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.

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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.

In September 2021, the Company entered into an Intercompany General & Administrative Services Agreement with Agenus (the “New Intercompany Services Agreement”).

Pursuant to the New Intercompany Services Agreement, Agenus provides MiNK with 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 Services Agreement on a cost-plus basis and the Company is required to pay 105 % of Agenus’ costs.

Under the New Intercompany Services 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 Services Agreement upon 30 days’ prior written notice.

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 $ 856,000 and $ 250,000 for the three months ended March 31, 2022 and 2021, respectively, is included in Operating expenses in the Company’s statement of operations and Due to related parties in the Company’s condensed 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 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 IPO, into 5,451,958 shares of the Company’s common stock upon completion of the IPO in October 2021, and was not outstanding at March 31, 2022.

(8) 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.

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.

In connection with the Company’s IPO, the Note was automatically converted into 5,451,958 shares of the Company’s common stock and was not outstanding as of March 31, 2022.

The fair value of the Note at March 31, 2021 was $ 46.2 million, 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 each note and considering the prevailing economic and market conditions at the balance sheet date.

The impact of the change in the fair value for the three months ended March 31, 2021 was $ 684,000 .

(9) Contingencies

2 unchanged sentences

(10) 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;

5,000,000 shares are designated as preferred stock.

No new accounting pronouncement issued or effective during the three months ended March 31, 2022 had or is expected to have a material impact on the Company’s consolidated financial statements or disclosures.

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