What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-08-10 · 124 added, 63 removed, 321 unchanged (37% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

19 unchanged sentences

Stockholders' equity:

Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 83.1 million and 50.7 million shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 83.1 million and 50.7 million shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Total revenues

10 unchanged sentences

Change in fair value of warrant liabilities

Arbitration settlement

( 2,406,576 )

Interest income

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Additional Paid-

Stockholders’

Balance at April 1, 2021

Balance at July 1, 2021

( 375,925,716 )

Stock options exercised for cash

Stock-based compensation

1 unchanged sentence

( 12,429,323 )

Balance at June 30, 2021

Balance at September 30, 2021

( 388,355,039 )

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Additional Paid-

7 unchanged sentences

( 32,115,555 )

Balance at June 30, 2021

Balance at September 30, 2021

( 388,355,039 )

For the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020

Additional Paid-

Stockholders’

Balance at April 1, 2020

Balance at July 1, 2020

( 340,360,757 )

Issuance common stock for cash

Stock-based compensation

1 unchanged sentence

( 7,371,500 )

Balance at June 30, 2020

Balance at September 30, 2020

( 347,732,257 )

For the Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2020

Additional Paid-

2 unchanged sentences

( 327,533,414 )

Issuance common stock for cash

Warrants exercised for cash

3 unchanged sentences

( 20,198,843 )

Balance at June 30, 2020

Balance at September 30, 2020

( 347,732,257 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

For the Nine Months Ended

September 30,

Cash Flows from Operating Activities:

8 unchanged sentences

Prepaid expenses and deposits

( 1,106,072 )

Other receivables

7 unchanged sentences

( 1,262,092 )

( 2,005,160 )

Purchase of construction in progress

( 1,519,196 )

( 3,147,566 )

Net cash used in investing activities

( 2,781,288 )

( 5,152,726 )

Cash Flows from Financing Activities:

7 unchanged sentences

Cash and cash equivalents at end of the period

For the Six Months Ended

Supplemental schedule of non-cash financing activities:

For the Nine Months Ended

September 30,

Supplemental schedule of non-cash financing and investing activities:

Reclassifications between construction in progress and fixed assets

Capital expenditures included in accounts payable

Issuance of common stock as commitment fee for future financing

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NATURE OF OPERATIONS

7 unchanged sentences

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 June 30, 2021 has been derived from unaudited financial statements;

The condensed consolidated balance sheet at September 30, 2021 has been derived from unaudited financial statements;

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

2 unchanged sentences

LIQUIDITY AND FINANCIAL CONDITION

As of June 30, 2021, the Company had cash and cash equivalents of approximately $ 57.2 million.

As of September 30, 2021, the Company had cash and cash equivalents of approximately $ 48.7 million.

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

8 unchanged sentences

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

In August 2021, the Company entered into a Controlled Equity Offering SM Sales Agreement (the “ATM Agreement”) with Cantor Fitzgerald & Co.

and RBC Capital Markets, LLC (the “Sales Agents”), pursuant to which the Company can offer and sell, from time to time at its sole discretion through the Sales Agents, shares of its common stock having an aggregate offering price of up to $ 75.0 million.

Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No.

333-258687), which the SEC declared effective on August 19, 2021.

The Sales Agents will be entitled to compensation under the Sales Agreement at a commission rate equal to 3.0 % of the gross sales price per share sold under the ATM Agreement, and the Company has provided each of the Sales Agents with indemnification and contribution rights.

To date, the Company has not sold any shares of its common stock under the ATM Agreement.

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.

5 unchanged sentences

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 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 June 30, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements into the first quarter of 2023.

In August 2021, the Company received notice of a Product Development Research award totaling approximately $ 13.1 million from the Cancer Prevention and Research Institute of Texas (“CPRIT”) to support the Company's Phase 2 clinical trial of its lead MultiTAA-specific T cell product MT-401.

The CPRIT award is intended to support the adjuvant arm of the Company's Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with acute myeloid leukemia following a hematopoietic stem cell transplant.

The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group.

To date, the Company has not received any funds from the CPRIT grant.

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 September 30, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements into the first quarter of 2023.

This expectation does not account for any future funds that the Company may receive from the CPRIT award.

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.

11 unchanged sentences

However, the Company will continue to assess the effect of the pandemic on its operations, including its clinical programs.

The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect the Company’s business and the value of its common stock.

The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the emergence of any new variant strains of COVID-19, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements, the timing, distribution, rate of public acceptance and efficacy of vaccines and other treatments, and business closures in the United States and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, it could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 and any variant strains thereof could materially affect the Company’s business and the value of its common stock.

SIGNIFICANT ACCOUNTING POLICIES

Prior Period Reclassification

Certain reclassifications have been made to reclass certain non-cash capital expenditures on the consolidated statements of cash flows from a cash outflow from investing activity to a non-cash investing activity.

The Company has evaluated the materiality of this adjustment and concluded it was not material to the previously issued consolidated financial statements and had no impact to the reported consolidated balance sheets, consolidated statements of operations or net loss per share.

For the year ended December 31, 2020, this immaterial adjustment had the effect of increasing net cash used in operating activities and decreasing net cash used in investing activities by $ 1.2 million from what was previously reported.

For the nine months ended September 30, 2020, this immaterial adjustment had the effect of increasing net cash used in operating activities and decreasing net cash used in investing activities by $ 1.9 million from was previously reported.

Property and equipment - Construction in Progress

During the third quarter of 2021, and in connection with the Company’s manufacturing facility in Houston, Texas, the Company incurred $ 0.6 million of costs pursuant to an agreement with a vendor to build and eventually install a second modular cleanroom.

Such costs were recorded in fixed assets – construction in progress on the balance sheet as of September 30, 2021.

Upon completion and installation of the modular cleanroom, all costs associated with the buildout will be recorded as manufacturing equipment and amortized over the estimated useful life.

The Company recognizes grant income in accordance with the terms stipulated under the grant awarded to the Company’s collaborators at the Mayo Foundation from the U.

Department of Defense.

In various situations, the Company receives certain payments from the Mayo Foundation for reimbursement of clinical supplies.

These payments are non-refundable and are not dependent on the Company’s ongoing future performance.

The Company has adopted a policy of recognizing these payments when received and as revenue in accordance with Accounting Standards Update No.

2014 09, “Revenue from Contracts with Customers (Topic 606)” issued by the Financial Accounting Standards Board (“FASB”).

Cash received from grants in advance of incurring qualifying costs is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred.

New Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date.

From time to time, new accounting pronouncements are issued by FASB or other standard setting bodies that the Company adopts as of the specified effective date.

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.

9 unchanged sentences

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 six months ended June 30, 2021 and 2020, respectively:

The following table sets forth the computation of net loss per share for the three and nine months ended September 30, 2021 and 2020, respectively:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

( 12,429,323 )

6 unchanged sentences

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 Six Months Ended

For the Nine Months Ended

September 30,

Common stock options

8 unchanged sentences

PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of June 30, 2021 and December 31, 2020, respectively:

Property and equipment consist of the following as of September 30, 2021 and December 31, 2020, respectively:

September 30,

Estimated Useful Lives

9 unchanged sentences

In June 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.

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.

$ 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 June 30, 2021 and 2020 was approximately $ 0.5 million and $ 0.1 million, respectively.

Depreciation expense for the six months ended June 30, 2021 and 2020 was approximately $ 1.0 million and $ 0.1 million, respectively.

During the third quarter of 2021, and in connection with the opening of the Company’s manufacturing facility in Houston, Texas, the Company incurred $ 0.6 million of costs pursuant to an agreement with a vendor to build and eventually install a second modular cleanroom.

Such costs were recorded in fixed assets – construction in progress on the balance sheet as of September 30, 2021.

Depreciation expense for the three months ended September 30, 2021 and 2020 was approximately $ 0.6 million and $ 0.1 million, respectively.

Depreciation expense for the nine months ended September 30, 2021 and 2020 was approximately $ 1.6 million and $ 0.3 million, respectively.

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

7 unchanged sentences

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

As of June 30, 2021, the Company had total operating lease liabilities of approximately $12.1 million and right-of-use assets of approximately $ 10.3 million, which were included in the condensed consolidated balance sheet.

As of September 30, 2021, the Company had total operating lease liabilities of approximately $ 12.0 million and right-of-use assets of approximately $ 10.1 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.

3 unchanged sentences

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

The following summarizes quantitative information about the Company’s operating leases for the three and six months ended June 30, 2021 and 2020, respectively:

The following summarizes quantitative information about the Company’s operating leases for the three and nine months ended September 30, 2021 and 2020, respectively:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Operating lease expense summary:

2 unchanged sentences

Variable lease expense

For the Six Months Ended

For the Nine Months Ended

September 30,

Other information:

Operating cash flows - operating leases

The weighted-average remaining lease term as of June 30, 2021 and December 31, 2020 was approximately 8.9 years and 9.3 years, respectively.

The weighted-average discount rate used to determine the operating lease liability as of June 30, 2021 and December 31, 2020 was approximately 5.7 % and 5.7 %, respectively.

The weighted-average remaining lease term as of September 30, 2021 and December 31, 2020 was approximately 8.7 years and 9.3 years, respectively.

The weighted-average discount rate used to determine the operating lease liability as of September 30, 2021 and December 31, 2020 was approximately 5.7 % and 5.7 %, respectively.

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

Six months ended December 31, 2021

Three months ended December 31, 2021

Year ended December 31, 2022

4 unchanged sentences

( 3,594,000 )

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at June 30, 2021

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at September 30, 2021

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of June 30, 2021 and December 31, 2020, respectively:

Accounts payable and accrued liabilities consist of the following as of September 30, 2021 and December 31, 2020, respectively:

September 30,

Accounts payable

3 unchanged sentences

Technology license fees

Arbitration settlement fees

Total accounts payable and accrued liabilities

1 unchanged sentence

An arbitration proceeding was brought against the Company before the Financial Industry Regulatory Authority, Inc.

by a broker seeking to be paid approximately $ 1.6 million as compensation for two financing transactions that occurred in 2018, a warrant conversion and a private placement brokered by another broker.

The broker further claims approximately $ 335,000 in interest, and approximately $ 600,000 in attorney’s fees, which are recoverable in the arbitration by the prevailing party.

The broker’s claims are based on a placement agent agreement for a private placement it brokered in 2017, under which it alleges it is entitled to compensation for the 2018 transactions.

The arbitration hearing has occurred, and the parties have filed post-hearing briefs, and are awaiting a decision from the arbitrators.

(“FINRA”) by a broker seeking to be paid compensation for two financing transactions that occurred in 2018, a warrant conversion and a private placement brokered by another broker.

The broker’s claims were based on a placement agent agreement for a private placement it brokered in 2017, under which it alleged it was entitled to compensation for the 2018 transactions.

The FINRA panel found in favor of the broker and awarded the broker $ 2.4 million for compensation, interest and attorney fees.

As of September 30, 2021, the Company recorded an accrual of $ 2.4 million in accrued liabilities on its condensed consolidated balance sheet and a $ 2.4 million charge to other expenses.

On September 17, 2021, the broker filed a petition to confirm the FINRA arbitration award in the Supreme Court of New York for the County of New York.

The Company removed the case to the United States District Court for the Southern District of New York on September 27, 2021.

On October 22, 2021, the Company filed a motion in federal court to vacate the award.

STOCKHOLDERS’ EQUITY

1 unchanged sentence

Exercise of Stock Options

During the six months ended June 30, 2021, certain outstanding options were exercised for 1,456 shares of common stock providing aggregate proceeds to the Company of approximately $ 3,100 .

During the nine months ended September 30, 2021, certain outstanding options were exercised for 1,456 shares of common stock providing aggregate proceeds to the Company of approximately $ 3,100 .

Board Compensation

During the six months ended June 30, 2021, the Company issued an aggregate of 63,290 shares of common stock to its non-employee directors.

During the nine months ended September 30, 2021, the Company issued an aggregate of 63,290 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.

5 unchanged sentences

Share Purchase Warrants

A summary of the Company’s share purchase warrants as of June 30, 2021 and changes during the period is presented below:

A summary of the Company’s share purchase warrants as of September 30, 2021 and changes during the period is presented below:

Weighted Average

5 unchanged sentences

Balance - January 1, 2021

Balance - June 30, 2021

Expired or cancelled

( 1,000,000 )

Balance - September 30, 2021

STOCK-BASED COMPENSATION

11 unchanged sentences

Each option award was granted with an exercise price of $ 2.19 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on April 1, 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.

During the six months ended June 30, 2021, 1,456 stock options were exercised for net proceeds of $ 3,100 .

A summary of the Company’s stock option activity for the six months ended June 30, 2021 is as follows:

Additionally, 130,000 stock option awards were issued during the three months ended September 30, 2021 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 2.88 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on July 1, 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.

During the nine months ended September 30, 2021, 1,456 stock options were exercised for net proceeds of $ 3,100 .

A summary of the Company’s stock option activity for the nine months ended September 30, 2021 is as follows:

Weighted Average

6 unchanged sentences

Canceled/Expired

Outstanding as of June 30, 2021

Outstanding as of September 30, 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 six months ended June 30, 2021 was as follows:

For the Six Months Ended

June 30, 2021

The weighted average assumptions used in calculating the fair values of stock options that were granted during the nine months ended September 30, 2021 was as follows:

For the Nine Months Ended

September 30, 2021

Exercise price

5 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Stock Compensation expenses:

2 unchanged sentences

Total stock compensation expenses

As of June 30, 2021, the total stock-based compensation cost related to unvested awards not yet recognized was $ 11.2 million.

As of September 30, 2021, the total stock-based compensation cost related to unvested awards not yet recognized was $ 9.9 million.

The expected weighted average period compensation costs to be recognized was approximately 2.1 years.

1 unchanged sentence

RELATED PARTY TRANSACTIONS

The following table sets forth related party transaction expenses recorded for the three and six months ended June 30, 2021 and 2020, respectively.

The following table sets forth related party transaction expenses recorded for the three and nine months ended September 30, 2021 and 2020, respectively.

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Baylor College of Medicine

2 unchanged sentences

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 November 2018, January 2020 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, May 2020 and July 2021, the Company entered into Clinical Supply Agreements 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.

4 unchanged sentences

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