What changed in this filing

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Item 1. Financial Statements

2021-05-12 compared with 2020-11-09 · 91 added, 271 removed, 240 unchanged (60% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

1 unchanged sentence

Prepaid expenses and deposits

Interest receivable

Other receivable

Other receivables

Total current assets

8 unchanged sentences

Lease liability

Warrant liability

Total current liabilities

5 unchanged sentences

Stockholders' equity:

Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 48.0 million and 45.7 million shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 83.0 million and 50.7 million shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Total revenues

Operating expenses:

5 unchanged sentences

( 6,643,613 )

( 20,377,336 )

( 17,166,769 )

Other income (expense):

3 unchanged sentences

( 6,485,644 )

( 20,198,843 )

( 16,348,802 )

Net loss per share, basic and diluted

Weighted average number of common shares outstanding

Weighted average number of common shares outstanding, basic and diluted

See accompanying notes to these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended September 30, 2020

Additional Paid-

Stockholders’

Balance at July 1, 2020

( 340,360,757 )

Issuance common stock for cash

Stock-based compensation

( 7,371,500 )

Balance at September 30, 2020

( 347,732,257 )

For the Nine Months Ended September 30, 2020

Additional Paid-

Stockholders’

Balance at January 1, 2021

( 356,239,484 )

Issuance common stock for cash

Warrants exercised for cash

Issuance of common stock as commitment fee for future financing

Stock-based compensation

( 20,198,843 )

Balance at September 30, 2020

( 347,732,257 )

For the Three Months Ended September 30, 2019

Additional Paid-

Stockholders’

Balance at July 1, 2019

( 316,994,766 )

Stock warrants exercised for cash

Stock warrants cashless exercised

Issuance of common stock for cash (net of offering costs of $ 3.9 million)

Stock-based compensation

1 unchanged sentence

( 8,779,450 )

Balance at September 30, 2019

Balance at March 31, 2021

( 365,018,934 )

For the Nine Months Ended September 30, 2019

Additional Paid-

2 unchanged sentences

( 327,533,414 )

Stock options exercised for cash

Warrants exercised for cash

Stock warrants cashless exercised

Issuance of common stock as commitment fee for future financing

Stock-based compensation

1 unchanged sentence

( 6,485,644 )

Balance at September 30, 2019

Balance at March 31, 2020

( 334,019,058 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash Flows from Operating Activities:

8 unchanged sentences

Prepaid expenses and deposits

( 1,764,345 )

Interest receivable

Other receivables

Accounts payable and accrued expenses

( 2,442,581 )

Lease liability

4 unchanged sentences

Purchase of property and equipment

( 2,484,825 )

Purchase of construction in progress

( 4,557,581 )

Net cash used in investing activities

( 7,042,406 )

Cash Flows from Financing Activities:

Proceeds from issuance of common stock

Proceeds from exercise of stock options

Proceeds from issuance of common stock, net

Proceeds from exercise of warrants

Net cash provided by financing activities

Net decrease in cash

( 16,947,212 )

Net increase (decrease) in cash

( 3,648,887 )

1 unchanged sentence

Cash and cash equivalents at end of the period

For the Nine Months Ended

September 30,

For the Three Months Ended

Supplemental schedule of non-cash financing activities:

Offering cost not yet paid

Reclassifications between construction in progress and fixed assets

Issuance of common stock as commitment fee for future financing

Recognition of right-of-use assets and lease liability from new operating lease agreements

Stock warrants cashless exercised

See accompanying notes to these unaudited condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

March 31, 2021

NATURE OF OPERATIONS

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The results for the condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2021 or for any future interim period.

The condensed consolidated balance sheet at September 30, 2020 has been derived from unaudited financial statements;

The condensed consolidated balance sheet at March 31, 2021 has been derived from unaudited financial statements;

however, it does not include all of the information and notes required by U.S.

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The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s annual report on Form 10-K filed on March 9, 2021.

LIQUIDITY, FINANCIAL CONDITION AND GOING CONCERN

As of September 30, 2020, the Company had cash and cash equivalents of approximately $ 27.0 million.

LIQUIDITY AND FINANCIAL CONDITION

As of March 31, 2021, the Company had cash and cash equivalents of approximately $ 64.5 million.

The Company’s activities since inception have consisted principally of acquiring product and technology rights, raising capital, and performing research and development.

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From inception, the Company has been funded by a combination of equity and debt financings.

On March 16, 2021, the Company issued an aggregate of 32,282,857 shares of its common stock, for net proceeds of $ 52.6 million.

The Company expects to continue to incur substantial losses over the next several years during its development phase.

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The Company plans to meet its capital requirements primarily through issuances of debt and equity securities and, in the longer term, revenue from sales of its product candidates, if approved.

Based on the Company’s revised clinical and research and development plans and its revised timing expectations related to the progress of its programs, and buildout of manufacturing and research facilities, and expansion of the Company’s corporate headquarters, discussed in Footnotes #7 and #10 below, the Company expects that its cash and cash equivalents as of September 30, 2020 will enable the Company to fund its operating expenses and capital expenditure requirements into the second quarter of 2021, as such these factors raise substantial doubt regarding the Company's ability to continue as a going concern.

Based on the Company’s clinical and research and development plans and its timing expectations related to the progress of its programs, the Company expects that its cash and cash equivalents as of March 31, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements into the first quarter of 2023.

The Company has based this estimate on assumptions that may prove to be wrong, and the Company could utilize its available capital resources sooner than it currently expects.

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● enhances operational, financial and information management systems and hires additional personnel, including personnel to support development of product candidates and, if a product candidate is approved, commercialization efforts.

These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business.

The condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its long-term liquidity due to the COVID-19 pandemic.

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SIGNIFICANT ACCOUNTING POLICIES

Other Receivable

Pursuant to the Company's lease agreement for its manufacturing facility, the Company incurs and pays for the construction invoices directly for both the structural improvements of the facility and the building of the manufacturing modular cleanroom (i.e.

leasehold improvements and manufacturing equipment.) At the time the construction invoices are received by the Company, a fixed asset is recorded in construction-in-progress.

In accordance with the agreement, upon completion of the facility's construction, the Company is owed up to $ 1.0 million as reimbursement, and as such a landlord receivable is recorded, which provides for a legal right to receive construction reimbursements from the landlord for tenant improvement allowances.

During the third quarter of 2020, the Company recorded a $ 1.0 million receivable in its condensed consolidated financial statements.

Property and equipment - Construction in Progress

On June 26, 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

In connection with the manufacturing facility, the Company has incurred costs pursuant to an agreement with a vendor to design, engineer, build and eventually install modular cleanrooms in a manufacturing facility.

$ 4.6 million is recorded in fixed assets - construction in progress on the balance sheet as of September 30, 2020.

Upon completion of the facility's construction, all costs associated with the buildout will be recorded as either manufacturing equipment and/or leasehold improvements and amortized over the estimated useful life of the leasehold lease.

New Accounting Standards

1 unchanged sentence

Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.

Recent Accounting Standards Not Yet Adopted

Recent Accounting Standards Adopted in the Year

In December 2019, the FASB issued ASU No.

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This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related disclosures.

The Company has adopted the new standard effective January 1, 2021 and has concluded that the adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

NET LOSS PER SHARE

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Diluted loss per common share is computed similarly to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

The following table sets forth the computation of net loss per share for the three and nine months ended September 30, 2020 and 2019, respectively:

The following table sets forth the computation of net loss per share for the three months ended March 31, 2021 and 2020, respectively:

For the Three Months Ended

For the Nine Months Ended

September 30,

( 8,779,450 )

( 6,485,644 )

( 20,198,843 )

( 16,348,802 )

Weighted average common shares outstanding

Net loss per share data:

Net loss per share:

Basic and diluted

The following securities, rounded to the nearest thousand, were not included in the diluted net loss per share calculation because their effect was anti-dilutive for the periods presented:

For the Nine Months Ended

September 30,

For the Three Months Ended

Common stock options

Common stock purchase warrants

Common stock warrants - liability treatment

Potentially dilutive securities

OTHER RECEIVABLES

Pursuant to the Company’s lease agreement for its manufacturing facility, the Company incurred and paid for the construction invoices directly for both the structural improvements of the facility and the building of the manufacturing modular cleanroom (i.e.

leasehold improvements and manufacturing equipment).

In accordance with the agreement, upon completion of the facility’s construction, the Company was owed up to $ 1.0 million as reimbursement, and as such a landlord receivable was recorded, which provides for a legal right to receive construction reimbursements from the landlord for tenant improvement allowances.

During the fiscal year ended 2020, the Company recorded a $ 1.0 million receivable in its condensed consolidated financial statements.

The Company received the $ 1.0 million reimbursement in April 2021.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of September 30, 2020 and December 31, 2019, respectively:

September 30,

Property and equipment consist of the following as of March 31, 2021 and December 31, 2020, respectively:

Estimated Useful Lives

Lab equipment

Lab and manufacturing equipment

Computers, equipment and software

3 unchanged sentences

accumulated depreciation

( 1,094,000 )

Construction in progress

Total fixed assets, net

Depreciation expense for the three months ended September 30, 2020 and 2019 was approximately $ 0.1 million and $ 0.03 million, respectively.

Depreciation expense for the nine months ended September 30, 2020 and 2019 was approximately $ 0.3 million and $ 0.07 million, respectively.

On June 26, 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

In June 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

$ 4.6 million is recorded in fixed assets - construction in progress on the balance sheet as of September 30, 2020.

In connection with the research facility that the Company opened during the second quarter of 2020, the Company incurred approximately $ 1.3 million of costs acquiring necessary lab equipment to carry out its experiments.

The $ 1.3 million is included in Lab equipment within fixed assets and is being depreciated over five years .

On March 23, 2020, the Company entered into an agreement to expand its corporate headquarters in Houston, Texas, which commenced in the third quarter of 2020.

The initial lease term is ten years with two five-year renewal options.

Fixed rent payments under the initial term are approximately $ 5.6 million.

Additionally, the Company is also responsible for its share of operating expenses.

In the third quarter of 2020, the Company recorded right-of use assets and related operating lease liabilities of approximately $ 4.1 million as result of entering into the lease for its new corporate facility.

On April 30, 2020, the Company entered into a lease for a research facility in Houston, Texas.

The lease term is 71 months .

Fixed rent payments under the initial term are approximately $ 1.1 million.

On June 26, 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

The initial lease term is ten years from the expected rent commencement date in the fourth quarter of 2020 with two five-year renewal options.

Fixed rent payments under the initial term are approximately $ 9.8 million.

Additionally, the Company is also responsible for its share of operating expenses.

In connection with the lease for the manufacturing facility, the Company is to receive $ 1.0 million as reimbursement for out of pocket buildout costs.

Accordingly, during the third quarter of 2020, the Company recorded a $ 1.0 million receivable, and a reduction in right-of use assets, in its condensed consolidated financial statements.

The Company also leases office space under agreements classified as operating leases that expire in 2022.

The Company has a remaining lease liability of $ 0.2 million and $ 0.2 million of the related right-of-use asset resulting from the lease of its Jacksonville, Florida office space, which expires in 2022.

$ 6.8 million was recorded in fixed assets - construction in progress on the balance sheet as of December 31, 2020.

The completion of the facility’s construction occurred during December 2020 and the Company received its certificate of occupancy in January 2021, and as such was placed into service in January 2021.

During January 2021, $ 4.0 million of the costs previously recorded as construction in progress were recorded to lab and manufacturing equipment and $ 2.8 million were recorded to leasehold improvements.

Depreciation expense for the three months ended March 31, 2021 and 2020 was approximately $ 0.5 million and $ 0.03 million, respectively.

The Company leases manufacturing, research and administrative facilities under operating leases.

The Company evaluates its contracts to determine if an arrangement is a lease at inception and classify it as a finance or operating lease.

Currently, all of the Company’s leases are classified as operating leases.

Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term.

The lease terms may include options to extend when it is reasonably certain that the Company will exercise that option.

Topic ASC 842 requires the Company to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

Right-of-use assets are recorded in other assets on the Company’s condensed consolidated balance sheets.

Current and non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on its condensed consolidated balance sheets.

Costs associated with operating leases are recognized on a straight-line basis within operating expenses over the term of the lease.

As of March 31, 2021, the Company had total operating lease liabilities of approximately $12.2 million and right-of-use assets of approximately $ 10.6 million, which were included in the condensed consolidated balance sheet.

Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

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The Company does not act as a lessor or have any leases classified as financing leases.

At September 30, 2020, the Company had operating lease liabilities of approximately $ 12.2 million and right-of-use assets of approximately $ 11.1 million, which were included in the condensed consolidated balance sheet.

The following summarizes quantitative information about the Company’s operating leases for the three and nine months ended September 30, 2020 and 2019, respectively:

The following summarizes quantitative information about the Company’s operating leases for the three months ended March 31, 2021 and 2020, respectively:

For the Three Months Ended

For the Nine Months Ended

September 30,

Operating lease expense summary:

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Operating cash flows - operating leases

Weighted-average remaining lease term as of September 30, 2020 – operating leases

Weighted-average remaining lease term – operating leases

Weighted-average discount rate as of adoption date – operating leases

Maturities of our operating leases, excluding short-term leases, are as follows:

Three months ended December 31, 2020

Nine months ended December 31, 2021

Year ended December 31, 2022

4 unchanged sentences

( 3,938,000 )

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at September 30, 2020

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at March 31, 2021

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of September 30, 2020 and December 31, 2019, respectively:

September 30,

Accounts payable and accrued liabilities consist of the following as of March 31, 2021 and December 31, 2020, respectively:

Accounts payable

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Total accounts payable and accrued liabilities

WARRANT LIABILITY AND FAIR VALUE MEASUREMENTS

During the nine months ended September 30, 2020, all of the Company's common stock purchase warrants previously treated as a liability expired.

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s common stock purchase warrants that are categorized within Level 3 of the fair value hierarchy for the nine months ended September 30, 2020 and 2019 is as follows:

Weighted Average Inputs

For the Nine Months Ended

September 30,

Exercise price

Contractual term (years)

Volatility (annual)

Risk-free rate

Dividend yield (per share)

Financial Liabilities Measured at Fair Value on a Recurring Basis

Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Warrant liability:

Fair value measured at September 30, 2020

Quoted prices in active

Significant other

observable inputs

unobservable inputs

Fair value at

September 30, 2020

Warrant liability

Fair value measured at December 31, 2019

Quoted prices in active

Significant other

observable inputs

unobservable inputs

Fair value at

December 31, 2019

Warrant liability

The fair value accounting standards define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability.

Fair value measurements are rated on a three-tier hierarchy as follows:

● Level 1 inputs:

Quoted prices (unadjusted) for identical assets or liabilities in active markets;

● Level 2 inputs:

Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly;

● Level 3 inputs:

Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

There were no transfers between Level 1, 2 or 3 during the nine months ended September 30, 2020.

The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2020:

Balance - January 1, 2020

Change in fair value of warrant liability

Balance – September 30, 2020

COMMITMENTS AND CONTINGENCIES

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The Company believes it has defenses to all of the allegations and intends to vigorously defend itself in this matter.

As discussed in Footnotes #6 and #7, on March 26, 2020 the Company entered into an agreement with a vendor to design, engineer, build and eventually install modular cleanrooms in a manufacturing facility in Houston, Texas, which the Company expects to lease with a commencement date in the fourth quarter of 2020.

The total fees for this project to be substantially completed by December 31, 2020 are estimated to be $ 6.5 million.

As of September 30, 2020, the Company has recorded $ 4.6 million of construction in progress costs associated with the building of the cleanrooms and the manufacturing facility.

STOCKHOLDERS’ EQUITY

Common Stock Transactions

Exercise of Stock Warrants

During the nine months ended September 30, 2020, certain outstanding warrants were exercised for 458,334 shares of common stock providing aggregate proceeds to the Company of approximately $ 0.6 million.

Board Compensation

During the nine months ended September 30, 2020, the Company issued an aggregate of 85,110 shares of common stock to its non-employee directors.

The fair value of the common stock of approximately $ 0.2 million was recognized as a component of stock-based compensation expense in general and administrative expenses.

Aspire Capital

On February 28, 2020, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 30.0 million of shares of the Company’s common stock over the 30 -month term of the purchase agreement.

In consideration for entering into the purchase agreement, the Company issued to Aspire Capital 345,357 shares of the Company’s common stock as a commitment fee.

The Company recorded the commitment fee to additional paid in capital.

As of September 30, 2020, Aspire Capital had purchased 1,407,470 shares under the Purchase Agreement , providing aggregate proceeds to the Company of approximately $ 2.2 million.

The Company may request daily up to 0.1 million shares to be purchased with a maximum purchase commitment of 9.2 million shares over the term of the arrangement.

The purchase price will generally be 97% of the stock price on the date of purchase.

Underwritten Public Offering

On March 11, 2021, the Company entered into an underwriting agreement with Piper Sandler & Co., as representative of the several underwriters, to issue and sell 28,572,000 shares of common stock of the Company in an underwritten public offering.

The offering price to the public was $ 1.75 per share.

In addition, the Company granted the underwriters an option to purchase, for a period of 30 days , up to an additional 4,285,800 shares of common stock, which such option was partially exercised with respect to 3,710,857 shares.

An aggregate of 32,282,857 shares of the Company’s common stock was issued for net proceeds of $ 52.6 million.

Share Purchase Warrants

A summary of the Company’s share purchase warrants as of September 30, 2020 and changes during the period is presented below:

A summary of the Company’s share purchase warrants as of March 31, 2021 and changes during the period is presented below:

Weighted Average

Remaining Contractual

Total Intrinsic

Exercise Price

1 unchanged sentence

Balance - January 1, 2021

Exercised for cash

Expired or cancelled

( 1,242,000 )

Balance - September 30, 2020

Balance - March 31, 2021

STOCK-BASED COMPENSATION

Stock Options

Award of 2019 Performance Bonuses and 2020 Equity Incentive Awards

On March 10, 2020, upon the recommendation of the compensation committee and pursuant to the Company’s 2014 Omnibus Stock Ownership Plan, the Company’s board of directors approved a total of 1,170,000 options to purchase the Company’s common stock as (i) performance bonuses for 2019 performance and (ii) equity-based incentive awards to the Company’s executive officers.

Each option award was granted with an exercise price of $ 2.12 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on March 10, 2020, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date.

Additionally, on March 10, 2020, the Company issued 111,000 options to purchase the Company’s common stock to other employees of the Company as equity-based incentive awards.

The above awards were in addition to stock option awards issued during the nine months ended September 30, 2020 to new employees upon their commencement of employment with the Company.

2021 Equity Incentive Awards

On February 10, 2021, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 740,000 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers, other than the Chief Executive Officer.

Each option award was granted with an exercise price of $ 3.29 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 10, 2021, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date.

Additionally, on February 10, 2021, the compensation committee of the Company’s board of directors approved a total of 260,000 options to purchase the Company’s common stock to non-executive employees of the Company as equity-based incentive awards.

Each option award was granted with an exercise price of $ 3.29 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 10, 2021, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.

On February 11, 2021, upon the recommendation of the compensation committee and pursuant to the Company’s 2020 Equity Incentive Plan, the Company’s board of directors approved a total of 430,000 options to purchase the Company’s common stock as (equity-based incentive awards to the Company’s Chief Executive Officer.

The option award was granted with an exercise price of $ 3.06 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 11, 2021, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such Chief Executive Officer’s continued service on the applicable vesting date.

The above awards were in addition to 90,000 stock option awards issued during the three months ended March 31, 2021 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 1.47 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on January 4, 2021, with 25 % of the option award vesting in one year and the remaining 75 % vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee's continued service on the applicable vesting date.

A summary of the Company’s stock option activity is as follows:

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Weighted Average

Contractual Life (in

Total Intrinsic

Number of Shares

Exercise Price

Intrinsic Value

Life (in years)

Outstanding as of January 1, 2021

Outstanding as of September 30, 2020

Canceled / Expired

Outstanding as of March 31, 2021

Options vested and exercisable

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans.

The weighted average assumptions used in calculating the fair values of stock options that were granted during the nine months ended September 30, 2020 was as follows:

For the Nine Months Ended

September 30, 2020

The weighted average assumptions used in calculating the fair values of stock options that were granted during the three months ended March 31, 2021 was as follows:

For the Three Months Ended

March 31, 2021

Exercise price

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For the Three Months Ended

For the Nine Months Ended

September 30,

Stock Compensation expenses:

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Total stock compensation expenses

At September 30, 2020, the total stock-based compensation cost related to unvested awards not yet recognized was $ 11.7 million.

As of March 31, 2021, the total stock-based compensation cost related to unvested awards not yet recognized was $ 12.7 million.

The expected weighted average period compensation costs to be recognized was approximately 2.5 years.

Future option grants will impact the compensation expense recognized.

During the nine months ended September 30, 2020, the Company received $ 0.5 million of a grant awarded to the Mayo Foundation from the U.S.

Department of Defense to fund the Phase 2 clinical trial of TPIV100 for the treatment of HER2/neu breast cancer.

The portion of the grant the Company received compensated the Company for clinical supplies manufactured by the Company for the clinical trial.

In accordance with Accounting Standards Update No.

2014-09, "Revenue from Contracts with Customers (Topic 606)"

issued by the Financial Accounting Standards Board, the Company recorded the $ 0.5 million of grant income as revenue.

The Company did not record any grant income during the nine months ended September 30, 2019.

RELATED PARTY TRANSACTIONS

The following table sets forth related party transaction expenses recorded for the three and nine months ended September 30, 2020 and 2019, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

The detailed information for the table above is below.

Sponsored Research Agreements with The Baylor College of Medicine (“BCM”) .

On November 16, 2018 and February 1, 2020, in furtherance of the BCM License Agreement and as contemplated by the terms thereof, the Company entered in Sponsored Research Agreements (“SRAs”) with BCM, which provided for the conduct of research for the Company by credentialed personnel at BCM’s Center for Cell and Gene Therapy.

The following table sets forth related party transaction expenses recorded in connection with the SRAs for the three and nine months ended September 30, 2020 and 2019, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

Clinical Supply Agreement with BCM .

On September 9, 2019, in furtherance of the BCM License Agreement and as contemplated by the terms thereof, the Company entered in a Clinical Supply Agreement ("CSA") with BCM, which provided for BCM to provide to the Company multi tumor antigen specific products.

The following table sets forth related party transaction expenses recorded in connection with the CSA for the three and nine months ended September 30, 2020 and 2019, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

Workforce Grant Agreement with BCM .

On October 5, 2019, in furtherance of the BCM Clinical Supply Agreement and as contemplated by the terms thereof, the Company entered in a Workforce Grant Agreement ("WGA") with BCM, which provided for BCM to provide to the Company manpower costs of projects for manufacturing, quality control testing and validation run activities.

The following table sets forth related party transaction expenses recorded in connection with the WGA for the three and nine months ended September 30, 2020 and 2019, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

Clinical Trial Agreement with BCM .

On August 17, 2020, in furtherance of the BCM Clinical Supply Agreement and as contemplated by the terms thereof, the Company entered in a Clinical Trial Agreement ("CTA") with BCM, which provided for BCM to provide to the Company investigator-initiated research studies.

The following table sets forth related party transaction expenses recorded in connection with the CTA for the three and nine months ended September 30, 2020 and 2019, respectively.

The following table sets forth related party transaction expenses recorded for the three months ended March 31, 2021 and 2020, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

Baylor College of Medicine

Bio-Techne Corporation

Total Research and development

Agreements with The Baylor College of Medicine (“BCM”) .

In November 2018 and February 2020, the Company entered in Sponsored Research Agreements with BCM, which provided for the conduct of research for the Company by credentialed personnel at BCM’s Center for Cell and Gene Therapy.

In September 2019, the Company entered in a Clinical Supply Agreement with BCM, which provided for BCM to provide to the Company multi tumor antigen specific products.

In October 2019, the Company entered in a Workforce Grant Agreement with BCM, which provided for BCM to provide to the Company manpower costs of projects for manufacturing, quality control testing and validation run activities.

In August 2020, the Company entered in a Clinical Trial Agreement with BCM, which provided for BCM to provide to the Company investigator-initiated research studies.

Purchases from Bio-Techne Corporation .

1 unchanged sentence

David Eansor is a member of the Company’s board of directors and is serving as the President of the Protein Sciences Segment of Bio-Techne Corporation.

The following table sets forth related party transaction expenses recorded in connection with Bio-Techne Corporation for the three and nine months ended September 30, 2020 and 2019, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

Consulting Agreement with Dr.

On October 19, 2018, after the closing of the Company’s merger, the Company entered into a consulting agreement with Dr.

Juan Vera, a member of the Company’s board of directors, to serve as the Company’s Chief Development Officer.

On September 1, 2019, Dr.

Vera became an employee of the Company and his consulting agreement was terminated.

During the three and nine months ended September 30, 2019, the Company incurred approximately $ 58,000 and $ 233,000 , respectively, of expenses under Dr.

Vera’s consulting agreement.

For the Three Months Ended

For the Nine Months Ended

September 30,

Research and development

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