What changed in this filing

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Item 1. Financial Statements

2021-10-21 compared with 2021-07-22 · 105 added, 88 removed, 328 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except share and par value data)

June 30, 2021

September 30, 2021

Current assets:

18 unchanged sentences

5,000,000 shares authorized;

1,952 and 1,954 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

1,952 and 1,954 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

12,087,525 and 6,749,028 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

15,360,025 and 6,749,028 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands, except share and per share data)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Development revenues:

4 unchanged sentences

General and administrative

Loss on disposal of property and equipment

Total operating expenses

21 unchanged sentences

Balance at June 30, 2020

Issuance of common stock for exercise of warrants

Reclassification of warrant liabilities

Conversion of Series B convertible preferred stock into common stock

Share-based compensation

Balance at September 30, 2020

Balance at December 31, 2020

Stock-based compensation

Sale of common stock, net of offering cost of $ 0.1 million

Sale of common stock, net of offering cost

Conversion of Series B Convertible Preferred

2 unchanged sentences

Balance at March 31, 2021

Sale of common stock, net of offering cost of $ 17,000

Sale of common stock, net of offering cost

Share-based compensation

Balance at June 30, 2021

Sale of common stock, net of offering cost

Share-based compensation

Balance at September 30, 2021

See Accompanying Notes to these Consolidated Condensed Financial Statements

2 unchanged sentences

(in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows used in operating activities:

2 unchanged sentences

Amortization of deferred financing costs and debt discount

Loss on disposal of property and equipment

In process research and development acquired from NanoTx Therapeutics

Noncash lease expenses

Non-cash lease expenses

Change in fair value of warrants

7 unchanged sentences

Purchases of property and equipment

Proceeds from sale of property and equipment

In process research and development acquired from NanoTx Therapeutics

12 unchanged sentences

Supplemental schedule of non-cash investing and financing activities:

Common stock issued in payment for in process research and development

Unpaid offering cost

Right-of-use asset obtained in exchange for lease liabilities

Issuance costs paid in common stock

Common stock issued in payment for in process research and development

See Accompanying Notes to these Consolidated Condensed Financial Statements

1 unchanged sentence

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

Basis of Presentation and New Accounting Standards

The accompanying unaudited consolidated condensed financial statements as of June 30, 2021 and for the six months ended June 30, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

The accompanying unaudited consolidated condensed financial statements as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

1 unchanged sentence

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of Plus Therapeutics, Inc., and its subsidiaries (collectively, the “Company”) have been included.

Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 22, 2021.

7 unchanged sentences

The Company plans to adopt the new guidance on January 1, 2023, and it does not expect that adoption of this standard will have a material impact on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncement

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes, Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

ASU 2019-12 became effective for the Company on January 1, 2021 .

Adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

In August 2020, the FASB issued ASU No.

5 unchanged sentences

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

The Company adopted ASU 2020-06 as of January 1, 2021, which did not have an impact on its consolidated financial statements.

Recently Adopted Accounting Pronouncement

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes, Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

ASU 2019-12 became effective for the Company on January 1, 2021 .

Adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

The Company adopted ASU 2020-06 as of January 1, 2021 , which did not have a material impact on its consolidated financial statements.

Use of Estimates

5 unchanged sentences

Liquidity and Going Concern

The Company incurred net losses of $ 5.5 million for the six months ended June 30, 2021.

The Company had an accumulated deficit of $ 439.0 million as of June 30, 2021.

Additionally, the Company used net cash of $ 5.4 million to fund its operating activities for the six months ended June 30, 2021.

The Company incurred net losses of $ 9.2 million for the nine months ended September 30, 2021.

The Company had an accumulated deficit of $ 442.8 million as of September 30, 2021.

Additionally, the Company used net cash of $ 7.7 million to fund its operating activities for the nine months ended September 30, 2021.

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

2 unchanged sentences

If sufficient capital is not raised, the Company will at a minimum need to significantly reduce or curtail its research and development and other operations, and this would negatively affect its ability to achieve corporate growth goals.

On October 23, 2020, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”) pursuant to which it may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 10,000,000 (the “ATM Shares”), depending on market demand, with Canaccord acting as an agent for sales.

Sales of the ATM Shares may be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on or through the NASDAQ Capital Market.

Canaccord will use its commercially reasonable efforts to sell the ATM Shares we request to be sold on our behalf, consistent with Canaccord’s normal trading and sales practices, under the terms and subject to the conditions set forth in the Distribution Agreement.

The Company does no t have an obligation to sell any of the ATM Shares.

The Company may instruct Canaccord not to sell the ATM Shares if the sales cannot be effected at or above the price we designate from time to time and we may at any time suspend sales pursuant to the Distribution Agreement.

On October 23, 2020, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”) pursuant to which it could issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 10,000,000 (the “ATM Shares”), depending on market demand, with Canaccord acting as an agent for sales.

Sales of the ATM Shares could be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on or through the NASDAQ Capital Market.

Canaccord was required to use its commercially reasonable efforts to sell the ATM Shares the Company requested to be sold on its behalf, consistent with Canaccord’s normal trading and sales practices, under the terms and subject to the conditions set forth in the Distribution Agreement.

The Company did no t have an obligation to sell any of the ATM Shares.

The Company could instruct Canaccord not to sell the ATM Shares if the sales could not be effected at or above the price the Company designated from time to time and the Company could at any time suspend sales pursuant to the Distribution Agreement.

During the year ended December 31, 2020, the Company issued 1,616,331 shares under the Distribution Agreement for net proceeds of approximately $ 3.2 million.

During the six months ended June 30, 2021, the Company issued 2,179,193 shares under the Distribution Agreement for net proceeds of $ 6.3 million.

As of June 30, 2021, there were no remaining shares that may be issued and sold under the Distribution Agreement.

During the nine months ended September 30, 2021, the Company issued 2,179,193 shares under the Distribution Agreement for net proceeds of $ 6.3 million.

As of September 30, 2021, there were no remaining shares that may be issued and sold under the Distribution Agreement.

On September 30, 2020, the Company entered into a purchase agreement (the “2020 Purchase Agreement”) and a registration rights agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $ 25.0 million of its common stock.

3 unchanged sentences

During the year ended December 31, 2020, the Company issued 353,113 shares, excluding 180,701 shares issued as commitment fee, under the 2020 Purchase Agreement for net proceeds of approximately $ 0.7 million.

During the six months ended June 30, 2021, the Company issued 2,262,686 shares of its common stock under the 2020 Purchase Agreement for net proceeds of $ 6.0 million.

During the nine months ended September 30, 2021, the Company issued 5,535,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of $ 12.3 million.

Should the Company fail to raise additional cash from outside sources, this would have a material adverse impact on its operations .

14 unchanged sentences

The Series U Warrants will be marked to market as of each balance sheet date until they are exercised or upon expiration, with the changes in fair value recorded as non-operating income or loss in the statements of operations.

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

Resulting fair value (per warrant)

The following table summarizes the change in Level 3 warrant liability value for the three and six month ended June 30, 2021 and 2020 (in thousands):

The following table summarizes the change in Level 3 warrant liability value for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

Warrant liability

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Beginning balance

3 unchanged sentences

Term Loan Obligations

On May 29, 2015 , the Company entered into the Loan and Security Agreement, pursuant to which Oxford Finance, LLC (“Oxford”) funded an aggregate principal amount of $ 17.7 million (the “Term Loan”), subject to the terms and conditions set forth in the Loan and Security Agreement.

On May 29, 2015 , the Company entered into the Loan and Security Agreement (the “Loan and Security Agreement”), pursuant to which Oxford Finance, LLC (“Oxford”) funded an aggregate principal amount of $ 17.7 million (the “Term Loan”), subject to the terms and conditions set forth in the Loan and Security Agreement.

The Term Loan accrues interest at a floating rate of at least 8.95 % per annum, comprised of a three-month LIBOR rate with a floor of 1.00 % plus 7.95 %.

7 unchanged sentences

In addition, pursuant to the Ninth Amendment, on April 1, 2020, the Company made a $ 5.0 million paydown of principal upon execution of the Ninth Amendment and $ 0.3 million of related final payment.

After giving effect to this payment, $ 4.3 million of principal remains outstanding under the Loan Agreement.

After giving effect to this payment, $ 4.3 million of principal remains outstanding under the Term Loan.

In addition, an amendment fee of $ 1.0 million will be payable in connection with the Amendment at the earlier of the maturity date, acceleration of the loans and the making of certain prepayments.

1 unchanged sentence

Under authoritative guidance, the Ninth Amendment does not meet the criteria to be accounted for as a troubled debt restructuring.

In addition, the Company performed a quantitative analysis and determined that the terms of the new debt and original debt instrument are not substantially different.

In addition, the Company performed a quantitative analysis and determined that the terms of the new debt and

original debt instrument are not substantially different.

Accordingly, the Ninth Amendment is accounted for as debt modification.

2 unchanged sentences

The intellectual property asset collateral will be released upon the Company achieving a certain liquidity level when the total principal outstanding under the Loan and Security Agreement is less than $ 3 million.

As of June 30, 2021, there was $ 4.3 million principal amount outstanding under the Term Loan, excluding the $ 3.2 million final payment fee, and the Company was in compliance with all of the debt covenants under the Loan and Security Agreement.

The Company’s interest expense for the three months ended June 30, 2021 and 2020 was $ 0.2 million and $ 0.3 million, respectively.

The Company’s interest expense for the six months ended June 30, 2021 and 2020 was $ 0.5 million and $ 0.6 million, respectively.

As of September 30, 2021, there was $ 4.3 million principal amount outstanding under the Term Loan, excluding the $ 3.2 million final payment fee, and the Company was in compliance with all of the debt covenants under the Loan and Security Agreement.

The Company’s interest expense for the three months ended September 30, 2021 and 2020 was $ 0.2 million and $ 0.3 million, respectively.

The Company’s interest expense for the nine months ended September 30, 2021 and 2020 was $ 0.7 million and $ 0.9 million, respectively.

Interest expense is calculated using the effective interest method;

therefore it is inclusive of non-cash amortization in the amount of $ 0.1 million and $ 0.2 million for the three months ended June 30, 2021 and 2020, and $ 0.3 million for each of the six months ended June 30, 2021 and 2020, respectively, related to the amortization of the debt discount, capitalized loan costs, and accretion of final payment.

therefore it is inclusive of non-cash amortization in the amount of $ 0.1 million for each of the three months ended September 30, 2021 and 2020, and $ 0.4 million for each of the nine months ended September 30, 2021 and 2020, respectively, related to the amortization of the debt discount, capitalized loan costs, and accretion of final payment.

The Loan and Security Agreement, as amended, contains customary indemnification obligations and customary events of default, including, among other things, the Company’s failure to fulfill certain obligations under the Term Loan, as amended, and the occurrence of a material adverse change, which is defined as a material adverse change in the Company’s business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan.

In the event of default by the Company or a declaration of material adverse change by its lender, under the Term Loan, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the Term Loan, which could materially harm the Company’s financial condition.

As of June 30, 2021, the Company has not received any notification or indication from Oxford to invoke the material adverse change clause.

As of September 30, 2021, the Company has not received any notification or indication from Oxford to invoke the material adverse change clause.

However, due to the Company’s current cash flow position and the substantial doubt about its ability to continue as a going concern, the entire principal amount of the Term Loan is presented as short-term.

5 unchanged sentences

The following were excluded from the diluted loss per share calculation for the periods presented because their effect would be anti-dilutive:

Six Months Ended June 30,

Nine Months Ended September 30,

Outstanding stock options

7 unchanged sentences

Right-of-use assets for financing leases are recorded within property and equipment, net in the balance sheet.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Leases with an initial term of 12 months

or less are not recorded on the b alance s heet.

Instead, the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company leases laboratory, office and storage facilities in San Antonio, Texas, under operating lease agreements that expire in 2028 .

The Company also leases certain office space in Austin, Texas under a month-to-month operating lease

On October 1, 2021, the operating lease in San Antonio, Texas was amended so that the lease would expire in February 2025 , with a 3 % increase to the previously agreed-on annual minimum lease payments.

The Company also leases certain office space in Austin, Texas under a month-to-month operating lease agreement.

On March 1, 2021, the Company entered into a lease agreement for office space in Charlottesville, Virginia (the “Charlottesville Lease”).

In addition, the Company has entered into lease s for certain equipment under various operating and finance leases.

As of June 30, 2021, contractual terms of all finance leases had expired and the Company did not have any right-of-use assets or lease liabilities relating to finance leases.

In addition, the Company has entered into leases for certain equipment under various operating and finance leases.

As of September 30, 2021, contractual terms of all finance leases had expired and the Company did not have any right-of-use assets or lease liabilities relating to finance leases.

The Company’s existing operating lease agreements generally provide for periodic rent increases, and renewal and termination options.

9 unchanged sentences

The table below summarizes the Company’s operating lease liabilities and corresponding right-of-use assets (in thousands, except years and rates):

June 30, 2021

September 30, 2021

Total leased assets

2 unchanged sentences

Weighted-average discount rate - operating leases

The table below summarizes the Company’s lease costs from its unaudited consolidated condensed statement of operations, and cash payments from its unaudited consolidated condensed statement of cash flows during the three and six months ended June 30, 2021 and 2020 (in thousands):

The table below summarizes the Company’s lease costs from its unaudited consolidated condensed statement of operations, and cash payments from its unaudited consolidated condensed statement of cash flows during the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Lease expense:

8 unchanged sentences

Total cash paid for amounts included in the measurement of lease liabilities

Total rent expenses for the six months ended June 30, 2021 and 2020 was $ 112,000 and $ 34,000 , respectively, which includes leases in the table above, month-to-month operating leases, and common area maintenance charges.

The Company’s future minimum annual lease payments under operating and financing leases at June 30, 2021 are as follows (in thousands):

Total rent expenses for the nine months ended September 30, 2021 and 2020 was $ 170,000 and $ 177,000 , respectively, which includes leases in the table above, month-to-month operating leases, and common area maintenance charges.

The Company’s future minimum annual lease payments under operating and financing leases at September 30, 2021 are as follows (in thousands):

Operating Leases

18 unchanged sentences

The timing of payments due under these agreements is estimated based on current study progress.

As of June 30, 2021 , the Company did no t have any clinical research study obligations.

As of September 30, 2021 , the Company did no t have any clinical research study obligations.

Legal proceedings

3 unchanged sentences

Lorem also claims that false representations were made regarding the UK Facility’s certification to sell and distribute devices in the European Union and export such devices to China.

In connection with these allegations, Lorem claims entitlement to at least $ 6,000,000 in compensatory damages and operational costs and expenses.

The Company believes that the claims from Lorem are without merit and intends to vigorously defend the case.

No liability was accrued as of June 30, 2021.

In connection with these allegations, Lorem claims entitlement to at least $ 6,000,000 in compensatory damages and operational costs and expenses (collectively, the “Lorem Claim”).

The Company believes that the claims from Lorem are without merit and intends to vigorously defend the case and on August 12, 2021, the Company filed a Motion to Dismiss asking the District Court to dismiss the Lorem Claim.

Lorem filed an opposition on September 9, 2021, which we responded to on September 30, 2021.

As of October 21, 2021, the Company is waiting for the District Court’s decision on our motion.

No liability was accrued as of September 30, 2021.

The Company is subject to various claims and contingencies related to legal proceedings.

3 unchanged sentences

On March 29, 2020, the Company and NanoTx, Corp.

(“NanoTx”) entered into a Patent and Know-How License Agreement (the “NanoTx License Agreement”), pursuant to which NanoTx granted the Company an irrevocable, perpetual, exclusive, fully

paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of radiolabeled nanoliposomes.

(“NanoTx”) entered into a Patent and Know-How License Agreement (the “NanoTx License Agreement”), pursuant to which NanoTx granted the Company an irrevocable, perpetual, exclusive, fully paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of radiolabeled nanoliposomes.

On May 7, 2020, all closing conditions under the NanoTx License Agreement were satisfied and the Company paid an upfront payment of $ 400,000 in cash and issued 230,769 shares of its common stock to NanoTx.

6 unchanged sentences

The Company’s Board of Directors is authorized to designate the terms and conditions of any preferred stock the Company issues without further action by the common stockholders.

There were no shares of Series A 3.6 % Convertible Preferred Stock outstanding as of June 30, 2021 or December 31, 2020.

There were 1,014 and 1,016 shares of Series B Convertible Preferred Stock outstanding as of June 30, 2021 and December 31, 2020, respectively.

There were 938 shares of Series C Preferred Stock outstanding as of each of June 30, 2021 and December 31, 2020.

As of June 30, 2021, there were 938 outstanding shares of Series C Preferred Stock that can be converted into an aggregate of 416,889 shares of common stock, and 1,014 shares of Series B Convertible Preferred Stock that can be converted into an aggregate of 5,978 shares of common stock.

On September 21, 2021 , Series A 3.6% Convertible Preferred Stock was eliminated.

There were no shares of Series A 3.6 % Convertible Preferred Stock immediately prior to September 21, 2021, or December 31, 2020.

There were 1,014 and 1,016 shares of Series B Convertible Preferred Stock outstanding as of September 30, 2021 and December 31, 2020, respectively.

There were 938 shares of Series C Preferred Stock outstanding as of each of September 30, 2021 and December 31, 2020.

As of September 30, 2021, there were 938 outstanding shares of Series C Preferred Stock that can be converted into an aggregate of 416,889 shares of common stock, and 1,014 shares of Series B Convertible Preferred Stock that can be converted into an aggregate of 5,978 shares of common stock.

On September 25, 2019, the Company completed an underwritten public offering.

10 unchanged sentences

In addition, approximately $ 0.7 million of other income representing change in the fair value of amended warrants from April 1, 2020 to the respective effective date of the Warrant Amendments is recorded in the consolidated statement of operations for the year ended December 31, 2020.

As of June 30, 2021, there were 2,141,000 outstanding Series U Warrants which can be exercised into an aggregate of 2,141,000 shares of common stock.

As of September 30, 2021, there were 2,141,000 outstanding Series U Warrants which can be exercised into an aggregate of 2,141,000 shares of common stock.

Lincoln Park Purchase Agreement

8 unchanged sentences

On June 16, 2020, the Company received stockholder approval to permit issuances of the Company’s common stock (including the issuance of more than 19.99 % of the Company’s common stock) to Lincoln Park pursuant to the 2020 Purchase Agreement.

Based on the closing price of the Company’s common stock of $ 1.05 per share on March 16, 2020, the maximum number of shares the Company could issue and sell under the 2020 Purchase Agreement is approximately 23.8 million shares.

Based on the closing price of the Company’s common stock of $ 1.05 per share on March 16, 2020, the maximum number of shares the Company can issue and sell under the 2020 Purchase Agreement is approximately 23.8 million shares.

Accordingly, the Company requested and received stockholder approval for the issuance of up to 23.8 million shares of the Company’s common stock under the 2020 Purchase Agreement.

4 unchanged sentences

During the year ended December 31, 2020, the Company issued 353,113 shares, excluding 180,701 shares issued as a commitment fee, of common stock under the 2020 Purchase Agreement for total net proceeds of approximately $ 0.7 million.

During the six months ended June 30, 2021, the Company issued 2,262,686 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 6.0 million.

During the nine months ended September 30, 2021, the Company issued 5,535,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 12.3 million.

At-the-market Issuances

2 unchanged sentences

During the year ended December 31, 2020, the Company issued 1,616,331 shares under the Distribution Agreement for net proceeds of approximately $ 3.2 million.

During the six months ended June 30, 2021, the Company issued 2,179,193 shares under the Distribution Agreement for net proceeds of $ 6.3 million .

As of June 30, 2021, there were no remaining shares that may be issued and sold under the Distribution Agreement.

During the nine months ended September 30, 2021, the Company issued 2,179,193 shares under the Distribution Agreement for net proceeds of $ 6.3 million .

As of September 30, 2021, there were no remaining shares that may be issued and sold under the Distribution Agreement.

Stock-based Compensation

Under the Company’s amended 2015 New Employee Incentive Plan (the “2015 Plan”), awards may be granted to employees who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as a material inducement to entering into employment with the Company.

As of June 30, 2021, there were 210,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

As of September 30, 2021, there were 210,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

On May 17, 2021, the stockholders of the Company approved an amendment and restatement to the Company’s 2020 Stock Incentive Plan (the “2020 Plan”) to increase the total number of shares of common stock reserved for issuance under the 2020 Plan by 1,000,000 shares.

The 2020 Plan provides for the award or sale of shares of common stock (including restricted stock), the award of stock units and stock appreciation rights, and the grant of both incentive stock options to purchase common stock.

The 2020 Plan provides for the number of shares available for issuance to be increased to the extent that awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan (as replaced by the 2020 Plan) are forfeited or expire (except as

otherwise provided in the 2020 Plan).

As of June 30, 2021, there were 599,712 shares remaining and available for future issuances under the 2020 Plan.

As of September 30, 2021, there were 640,212 shares remaining and available for future issuances under the 2020 Plan.

Generally, options issued under the 2020 Plan are subject to a one-year , two-year or four-year vesting schedule, with options vesting in equal installments on the monthly anniversary of the grant date and have a contractual term of 10 years.

A summary of activity for the six months ended June 30, 2021 is as follows:

A summary of activity for the nine months ended September 30, 2021 is as follows:

Exercise Price

Weighted Average Remaining Contractual Life (years)

Intrinsic Value (in $,000)

1 unchanged sentence

Cancelled/forfeited

Outstanding as of June 30, 2021

Vested as of June 30, 2021

Vested and expected to be vested as of June 30, 2021

As of June 30, 2021, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 1.7 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 3.16 years .

Outstanding as of September 31, 2021

Vested as of September 30, 2021

Vested and expected to be vested as of September 30, 2021

As of September 30, 2021, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 1.5 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 3.0 years .

COVID-19 Pandemic and CARES Act

6 unchanged sentences

As the accessibility of vaccines against COVID-19 and the number of adults who have received a vaccine has increased, several of the restrictions have been eased or lifted entirely.

The Company considered the impacts of COVID-19 on the assumptions and estimates used to prepare its consolidated financial statements and determined that there were no material adverse impacts on the Company’s results of operations and financial position at June 30, 2021.

The full extent to which the COVID-19 pandemic will directly or indirectly impact its business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets.

1 unchanged sentence

The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property (QIP).

The CARES Act had no material impact on the Company’s income tax provision for the year ended December 31, 2020 or the six months ended June 30, 2021.

The Company continues to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows.

The CARES Act had no material impact on the Company’s income tax provision for the year ended December 31, 2020 or the nine months ended September 30, 2021.

The programs under the CARES Act expired on September 6, 2021.

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