What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 224 added, 149 removed, 258 unchanged (59% of the section changed)

19 unchanged sentences

Series D Preferred Stock, $ 0.0001 par value;

0 and 1 shares authorized, issued and outstanding at March 31, 2023 and December 31, 2022, respectively

0 and 1 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Stockholders’ equity:

Common stock, $ 0.0001 par value, 100,000,000 shares authorized;

1,150,582 and 1,139,024 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

1,985,211 and 1,139,024 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

7 unchanged sentences

(Amounts in thousands, except share and per

Ended March 31,

Three Months Ended

Six Months Ended

Operating expenses:

5 unchanged sentences

Net loss per common share:

Basic and diluted

Weighted average number of common shares outstanding

Basic and diluted

The accompanying notes are an integral part of

4 unchanged sentences

(Amounts in thousands, except share data)

Series D Preferred Stock

For the Three Months Ended March 31, 2023

D Preferred Stock

For the Three and Six Months Ended June

Balance at December 31, 2022

7 unchanged sentences

$ ( 131,982 )

For the Three Months Ended March 31, 2022

Series D Preferred Stock

Issuance of common stock and warrants, net of offering costs

Issuance of common stock upon exercise of warrants

Stock-based compensation expense

Balance at June 30, 2023

$ ( 134,531 )

For the Three and Six Months Ended June

D Preferred Stock

Balance at December 31, 2021

5 unchanged sentences

$ ( 119,542 )

Stock-based compensation expense

Balance at June 30, 2022

$ ( 122,073 )

The accompanying notes are an integral part of

3 unchanged sentences

(Amounts in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

13 unchanged sentences

Cash flows from financing activities:

Net proceeds from the issuance of common stock and warrants

Cash in lieu of fractional shares for reverse stock split

1 unchanged sentence

Payment of taxes on net share settlements of restricted stock units

Net cash used in financing activities

Net cash provided by (used in) financing activities

Net decrease in cash and restricted cash

29 unchanged sentences

Basis of Presentation

The accompanying financial statements are unaudited and have been prepared

in accordance with accounting principles generally accepted in the United States (“ GAAP ”).

Certain information and

footnote disclosures that are included in the Company’s annual financial statements, but that are not required for interim reporting

purposes, have been condensed or omitted.

Additionally, the Company made adjustments to the outstanding stock option and unvested restricted

stock unit balances, and related per share amounts, at December 31, 2022 to reflect final revisions to these outstanding equity awards

as a result of the Company’s reverse stock split.

The adjustment had no effect on the Company’s condensed consolidated financial

These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included

in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange

Commission (the “ SEC ”) on March 22, 2023 (the “ 2022 Form 10-K ”).

In the opinion of management, all

adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial

statements have been included.

The accompanying condensed consolidated financial statements are unaudited

and have been prepared in accordance with accounting principles generally accepted in the United States (“ GAAP ”).

information and footnote disclosures that are included in the Company’s annual consolidated financial statements, but that are not

required for interim reporting purposes, have been condensed or omitted.

Additionally, the Company made adjustments to the outstanding

stock option and unvested restricted stock unit balances, and related per share amounts, at December 31, 2022 to reflect final revisions

to these outstanding equity awards as a result of the Company’s reverse stock split.

The adjustment had no effect on the Company’s

condensed consolidated financial statements.

These statements should be read in conjunction with the audited consolidated financial statements

and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2022, as filed

with the Securities and Exchange Commission (the “ SEC ”) on March 22, 2023 (the “ 2022 Form 10-K ”).

In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the

condensed consolidated financial statements have been included.

Interim results are not necessarily indicative of results for a full year.

50 unchanged sentences

financial support for development costs of up to $ 4,000,000

to AgonOx for expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in subjects with advanced melanoma and

to AgonOx for expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and

other advanced solid tumors.

The Company will recognize its share of costs arising

from research and development activities performed by AgonOx in the Company’s financial statements in the period AgonOx incurs such

Phio will be entitled to certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s

licensing of its DP TIL technology.

The Company will recognize

its share of costs arising from research and development activities performed by AgonOx in the Company’s financial statements in

the period AgonOx incurs such expense.

Phio will be entitled to certain future development milestones and low single-digit sales-based

royalty payments from AgonOx’s licensing of its DP TIL technology.

The Company recognized

approximately $ 181,000

of expense in connection with these efforts during the three months ended March 31, 2023.

expense under the Clinical Co-Development Agreement was recognized during the three months ended March 31, 2022.

and $ 300,000

of expense in connection with these efforts during the three and six months ended June 30, 2023, respectively.

expense under the Clinical Co-Development Agreement was recognized during the three and six months ended June 30, 2022.

There is approximately $ 3,570,000

of remaining costs not yet incurred under the Clinical Co-Development Agreement as of June 30, 2023.

Fair Value of Financial Instruments

The Company follows the provisions of the Financial

Accounting Standards Board (the “ FASB ”) Accounting Standards Codification (“ ASC ”) Topic 820, “ Fair

Value Measurement ,” for the Company’s financial assets and liabilities that are re-measured and reported at fair value

each reporting period and are re-measured and reported at fair value at least annually using a fair value hierarchy that is broken down

into three levels.

The Company follows the provisions

of the Financial Accounting Standards Board (the “ FASB ”) Accounting Standards Codification (“ ASC ”)

Topic 820, “ Fair Value Measurement ,” for the Company’s financial assets and liabilities that are re-measured

and reported at fair value each reporting period and are re-measured and reported at fair value at least annually using a fair value hierarchy

that is broken down into three levels.

Level inputs are defined as follows:

Level 1 – quoted prices in active markets

for identical assets or liabilities.

Level 2 – other significant observable inputs for the

assets or liabilities through corroboration with market data at the measurement date.

Level 3 – significant unobservable inputs that reflect

management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

At March 31, 2023 and December 31, 2022, the Company

categorized its restricted cash of $ 50,000 as Level 2 hierarchy.

The assets classified as Level 2 have initially been valued at the

applicable transaction price and subsequently valued, at the end of each reporting period, using other market observable data.

market data points include quoted prices, interest rates, reportable trades and other industry and economic events.

Level 1 – quoted prices

in active markets for identical assets or liabilities.

Level 2 – other significant

observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – significant

unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities

at the measurement date.

At June 30, 2023 and

December 31, 2022, the Company categorized its restricted cash of $ 50,000

as Level 2 hierarchy.

The assets classified as Level 2 have initially been valued at the applicable transaction price and

subsequently valued, at the end of each reporting period, using other market observable data.

Observable market data points include

quoted prices, interest rates, reportable trades and other industry and economic events.

The carrying amounts of cash,

14 unchanged sentences

treasury yield rate and borrowing rates from a creditworthy financial institution using the above lease factors.

The lease for the Company’s corporate headquarters represents

all of our significant lease obligations.

The lease for the Company’s

corporate headquarters represents all of our significant lease obligations.

The amounts reported in the condensed consolidated balance

2 unchanged sentences

Schedule of lease and supplemental balance sheet information

March 31, 2023

June 30, 2023

December 31, 2022

7 unchanged sentences

Operating lease costs included

in operating expense were $ 33,000 for the three months ended March 31, 2023 and 2022, respectively.

in operating expense were $ 33,000 for the

three months ended June 30, 2023 and 2022.

Operating lease costs included in operating expense were $ 66,000

for the six months ended June 30, 2023 and 2022.

Cash paid for the amounts

1 unchanged sentence

within changes in the lease liability in the operating activities of the Company’s condensed consolidated statements of cash flows

was $ 34,000 and $ 33,000 for the three months ended March 31, 2023 and 2022, respectively.

Future lease payments

for the Company’s non-cancellable operating lease and a reconciliation to the carrying amount of the operating lease liability

presented in the condensed consolidated balance sheet as of March 31, 2023 is as follows, in thousands:

was $ 35,000 and $ 34,000 for the three months ended June 30, 2023 and 2022, respectively.

Cash paid for

the amounts included in the measurement of the operating lease liability on the Company’s condensed consolidated balance sheets

and included within changes in the lease liability in the operating activities of the Company’s condensed consolidated statements

of cash flow was $ 69,000 and $ 67,000 for the six months ended June 30, 2023 and 2022, respectively.

Future lease payments for

the Company’s non-cancellable operating lease and a reconciliation to the carrying amount of the operating lease liability presented

in the condensed consolidated balance sheet as of June 30, 2023 is as follows, in thousands:

Schedule of future minimum lease payments

4 unchanged sentences

Preferred Stock

The Company has authorized up to

10,000,000 shares of preferred stock, $ 0.0001

par value per share, for issuance.

The Company’s Board of Directors (the “ Board ’) is authorized under the

Company’s Amended and Restated Articles of Incorporation (as may be amended and/or restated from time to time, the

“ Amended Certificate ”), to designate the authorized preferred stock into one or more series and to fix and

determine such rights, preferences, privileges and restrictions of any series of preferred stock, including voting rights, dividend

rights, conversion rights, redemption privileges and liquidation preferences, as shall be determined by the Board upon its

The Company has

authorized up to 10,000,000 shares of preferred stock, $ 0.0001 par value per share, for issuance.

The Company’s Board of

Directors (the “ Board ’) is authorized under the Company’s Amended and Restated Articles of Incorporation

(as may be amended and/or restated from time to time, the “ Amended Certificate ”), to designate the authorized

preferred stock into one or more series and to fix and determine such rights, preferences, privileges and restrictions of any series

of preferred stock, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences,

as shall be determined by the Board upon its issuance.

On November 16, 2022,

the Company issued and sold one

share of the Company’s Series D Preferred Stock, par value $ 0.0001 per

the Company issued and sold one share of the Company’s Series D Preferred Stock, par value $0.0001 per

share (the “ Series D Preferred Stock ”) to Robert Bitterman, then its interim Executive Chairman and current Chief

6 unchanged sentences

otherwise had no voting rights except as required by the General Corporation Law of the State of Delaware.

The Series D Preferred Stock was not convertible

into, or exchangeable for, shares of any other class or series of stock or other securities of the Company.

The Series D Preferred Stock

had no rights with respect to any distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger,

acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily.

The holder of the Series D Preferred

Stock was not entitled to receive dividends of any kind.

Under its terms, the outstanding share of Series

D Preferred Stock was to be redeemed in whole, but not in part, at any time:

(i) if such redemption was approved by the Board

in its sole discretion or (ii) automatically and effective upon the approval by the Company's stockholders of a Reverse Stock Split.

such redemption, the holder of the Series D Preferred Stock was entitled to receive consideration of $ 1,750 in cash.

The Series D Preferred Stock was redeemed in whole

on January 4, 2023, upon the approval by the Company’s stockholders of a Reverse Stock Split, such that, at March 31, 2023, there

were no shares of Series D Preferred Stock authorized, issued or outstanding and all of the Company’s authorized shares of preferred

stock were undesignated.

was not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company.

D Preferred Stock had no rights with respect to any distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization,

merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily.

The holder of the Series D

Preferred Stock was not entitled to receive dividends of any kind.

Under its terms, the outstanding

share of Series D Preferred Stock was to be redeemed in whole, but not in part, at any time:

(i) if such redemption was approved by the

Board in its sole discretion or (ii) automatically and effective upon the approval by the Company's stockholders of a Reverse Stock Split.

Upon such redemption, the holder of the Series D Preferred Stock was entitled to receive consideration of $ 1,750 in cash.

The Series D Preferred Stock

was redeemed in whole on January 4, 2023, upon the approval by the Company’s stockholders of a Reverse Stock Split, such that, at

June 30, 2023, there were no shares of Series D Preferred Stock authorized, issued or outstanding and all of the Company’s authorized

shares of preferred stock were undesignated.

Stockholders’ Equity

Financing — On April 20, 2023, the Company completed a registered direct offering and a concurrent private placement of a

registered shares of the Company’s common stock at a purchase price per share of $ 5.65 ,

unregistered five and one-half year term Series A warrants to purchase up to 353,983

shares of common stock at an exercise price of $ 5.40

per share and unregistered eighteen month term Series B warrants to purchase up to 353,983

shares of common stock at an exercise price of $ 5.40

per share (collectively, the “ April 2023 Financing ”).

In addition, the Company issued unregistered warrants to

the placement agent, H.C.

Wainwright & Co., LLC (“ HCW ”), in the April 2023 Financing to purchase a total of 26,549

shares of common stock at an exercise price of $ 7.0625

Net proceeds to the Company from the April 2023 Financing were $ 1,538,000

after deducting placement agent fees and offering expenses.

In connection with the April

2023 Financing, the Company entered into warrant amendment agreements (the “ Warrant Amendment Agreements ”) with the

participating investors to amend the exercise price of certain existing warrants to purchase up to an aggregate of 191,619 shares of common

stock that were previously issued in April 2018 through January 2021, such that each of the amended warrants have an exercise price of

$ 5.40 per share.

The Company received $ 24,000 as consideration in connection with the Warrant Amendment Agreements.

The Company assessed

the amendments to the exercise price of the warrants under ASC Topic 815, “ Derivatives and Hedging ” (“ ASC

815 ”) and determined that the amendment to the exercise price was completed in connection with and contingent on the close of

the April 2023 Financing.

The increase in fair value of $ 293,000 related to the Warrant Amendment Agreements was recognized as an equity

issuance cost and recorded in additional paid in capital per ASC 815.

Financing – On June 2, 2023, the Company completed a registered direct offering and a concurrent private placement of a

registered shares and 72,000

unregistered shares of the Company’s common stock each at a purchase price per share of $ 4.28 ,

unregistered pre-funded warrants to purchase up to an aggregate of 628,935

shares of common stock at a purchase price per share of $ 4.279

and with an exercise price of $ 0.001

per share, unregistered five and one-half year term Series A warrants to purchase up to an aggregate of 934,581

shares of common stock at an exercise price of $ 4.03

per share and unregistered eighteen month term Series B warrants to purchase up to an aggregate of 934,581

shares of common stock at an exercise price of $ 4.03

per share (collectively, the “ June 2023 Financing ”).

In addition, the Company issued unregistered warrants to the

placement agent, HCW, in the June 2023 Financing to purchase a total of 70,094

shares of common stock at an exercise price of $ 5.35

Net proceeds to the Company from the June 2023 Financing were $ 3,510,000

after deducting placement agent fees and offering expenses.

The Company first assessed the warrants in the

April 2023 Financing and June 2023 Financing under the FASB ASC Topic 480, “ Distinguishing Liabilities from Equity ” (“ ASC

480 ”) to determine whether they were within the scope of ASC 480.

As there were no instances outside of the Company’s

control that could require cash settlement, the Company’s warrants issued in the April 2023 Financing and June 2023 Financing

were determined to be outside the scope of ASC 480.

Company then applied and followed the applicable accounting guidance in the FASB ASC Topic 815, “ Derivatives and Hedging.

Financial instruments are accounted for as either derivative liabilities or equity instruments depending on the specific terms of the

The warrants issued in the April 2023 Financing and June 2023 Financing did not meet the definition of a derivative instrument

as they are indexed to the Company’s common stock and classified within stockholders’ equity.

Based on this determination,

the warrants issued in the April 2023 Financing and June 2023 Financing were classified within stockholders’ equity.

During the six months ended June 30, 2023, shares

of common stock issued related to exercises from the pre-funded warrants issued in the June 2023 Financing totaled 175,000 .

realized proceeds of $ 175 from the exercises of the pre-funded warrants.

There were no warrants exercised during the six months ended

June 30, 2022.

The following table summarizes the Company’s

outstanding warrants, all of which are classified as equity instruments, at March 31, 2023:

Schedule of outstanding warrants

Balance December 31,

April 2018 Warrants

April 2018 Placement Agent Warrants

October 2018 Warrants

October 2018 Underwriter Warrants

November 2019 Placement Agent Warrants

February 2020 Registered Direct Warrants

February 2020 Placement Agent Warrants

February 2020 Warrants

February 2020 Underwriter Warrants

April 2020 Warrants

April 2020 Placement Agent Warrants

January 2021 Warrants

January 2021 Placement Agent Warrants

February 2021 Placement Agent Warrants

outstanding warrants, all of which are classified as equity instruments, at June 30, 2023:

Summary of outstanding warrants

Exercise Price

Outstanding at December 31, 2022

Outstanding at June 30, 2023

The Company’s

outstanding warrants expire at various dates between October 2023 and December 2028.

Stock-based Compensation

Restricted Stock Units

Restricted stock units

(“ RSUs ”) are issued under the Company’s 2020 Long-Term Incentive Plan (the “ 2020 Plan ”)

or as inducement grants issued outside of the 2020 Plan to new employees.

RSUs are generally subject to graded vesting and the

satisfaction of certain service requirements.

Upon vesting, each outstanding RSU will be settled for one share of the

Company’s common stock.

Employee RSU recipients may elect to net share settle upon vesting, in which case the Company pays the

employee’s income taxes due upon vesting and withholds a number of shares of equal value.

The fair value of the RSUs awarded

are based upon the Company’s closing stock price at the grant date and are expensed over the requisite service period.

Restricted stock units (“ RSUs ”)

are issued under the Company’s 2020 Long-Term Incentive Plan (the “ 2020 Plan ”) or as inducement grants issued

outside of the 2020 Plan to new employees.

RSUs are generally subject to graded vesting and the satisfaction of certain service requirements.

Upon vesting, each outstanding RSU will be settled for one share of the Company’s common stock.

Employee RSU recipients may elect

to net share settle upon vesting, in which case the Company pays the employee’s income taxes due upon vesting and withholds a number

of shares of equal value.

The fair value of the RSUs awarded are based upon the Company’s closing stock price at the grant date

and are expensed over the requisite service period.

The following table summarizes the activity of

the Company’s RSUs for the three months ended March 31, 2023:

Schedule of RSU activity

the Company’s RSUs for the six months ended June 30, 2023:

Summary of RSU activity

Grant Date Fair Value

Unvested units at December 31, 2022

Unvested units at March 31, 2023

Unvested units at June 30, 2023

The weighted-average fair

value of RSUs granted during the three months ended March 31, 2023 and 2022 was $ 5.24 and $ 10.32 , respectively.

Stock-based compensation expense

related to RSUs was $ 111,000 and $ 179,000 for the three months ended March 31, 2023 and 2022, respectively.

The aggregate fair value of awards that vested

during the three months ended March 31, 2023 and 2022 was $ 95,000 and $ 128,000 , respectively, which represents the market value of the

Company’s common stock on the date that the RSUs vested.

value of RSUs granted during the six months ended June 30, 2023 and 2022 was $ 5.24 and $ 10.32 , respectively.

There were no RSU grants

during the three months ended June 30, 2023 and 2022.

Stock-based compensation

expense related to RSUs was $ 94,000

and $ 205,000

for the three and six months ended June 30, 2023, respectively.

Stock-based compensation expense related to RSUs was $ 82,000

and $ 261,000

for the three and six months ended June 30, 2022, respectively.

The aggregate fair value of

awards that vested during the six months ended June 30, 2023 and 2022 was $ 95,000 and $ 128,000 , respectively, which represents the market

value of the Company’s common stock on the date that the RSUs vested.

Stock Options

16 unchanged sentences

The following table summarizes the activity of

the Company’s stock options for the three months ended March 31, 2023:

Schedule of Stock Option Activity

the Company’s stock options for the six months ended June 30, 2023:

Summary of Stock Option Activity

Balance at December 31,

Balance at March 31, 2023

Exercisable at March 31, 2023

Balance at June 30, 2023

Exercisable at June 30, 2023

Stock-based compensation

expense related to stock options for the three months ended March 31, 2022 was $ 7,000 .

As of December 31, 2022, the compensation expense for all unvested stock options had been recognized in the Company’s results of

expense related to stock options for the three and six months ended June 30, 2022 was $ 1,000

and $ 8,000 ,

respectively.

As of December 31, 2022, the compensation expense for all unvested stock options had been recognized in the Company’s

results of operations.

Compensation Expense Related to Equity Awards

The following table sets forth

total stock-based compensation expense for the three months ended March 31, 2023 and 2022, in thousands:

The following table sets

forth total stock-based compensation expense for the three and six months ended June 30, 2023 and 2022, in thousands:

Schedule of stock based compensation expense

Three Months Ended

Six Months Ended

Research and development

2 unchanged sentences

Net Loss per Common Share

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

Diluted net loss per

share is computed by dividing the Company’s net loss by the weighted average number of common shares outstanding and the impact

of the dilutive effect of potential common stock equivalents, except when the inclusion of such potential common stock equivalents would

be anti-dilutive.

Dilutive potential common stock equivalents primarily consist of stock options, RSUs and warrants.

Therefore, basic

and diluted net loss per share applicable to common stockholders were the same for all periods presented because the impact of these items

is generally anti-dilutive during periods of net loss.

The weighted average number

of common shares outstanding as of June 30, 2023 includes the pre-funded warrants issued in connection with the June 2023 Financing, the

exercise of which requires nominal consideration for the delivery of the shares of common stock.

The following table sets forth

1 unchanged sentence

Schedule of anti-dilutive stock

Options to purchase common stock

Stock options

Unvested restricted stock units

Warrants to purchase common stock

Subsequent Events

On April 20, 2023, the

Company completed a registered direct offering of 353,983

shares of the Company’s common stock at a purchase price per share of $ 5.65 .

In a concurrent private placement, the Company also issued five and one-half years Series A warrants to purchase up to 353,983

shares of common stock at an exercise price of $ 5.40

per share and eighteen months Series B warrants to purchase up to 353,983

shares of common stock at an exercise price of $ 5.40

per share (collectively, the “ April 2023 Financing ”).

In addition, the Company issued warrants to the placement

Wainwright & Co., LLC, for the April 2023 Financing to purchase a total of 26,549

shares of common stock at an exercise price of $ 7.0625

Net proceeds to the Company from the April 2023 Financing are estimated to be approximately $ 1,654,000

after deducting placement agent fees and offering expenses.

In connection with the April

2023 Financing, the Company entered into warrant amendment agreements (the “ Warrant Amendment Agreements ”) with the

participating investors to amend the exercise price of certain existing warrants to purchase up to an aggregate of 191,619 shares of common

stock that were previously issued in April 2018 through January 2021, such that each of the amended warrants have an exercise price of

$ 5.40 per share.

The Company received $ 24,000 as consideration in connection with the Warrant Amendment Agreements.

The Company is currently reviewing

the accounting for the warrants issued in the April 2023 Financing and for the warrants amended under the Warrant Amendment Agreements.

1 The weighted average number of common shares outstanding

as of June 30, 2023 includes the pre-funded warrants issued in the June 2023 Financing because the exercise of such warrants requires

only nominal consideration.

Therefore, these pre-funded warrants are not included in the table above.

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