What changed in this filing

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Item 1. Financial Statements

2022-07-21 compared with 2022-04-21 · 92 added, 84 removed, 262 unchanged (40% of the section changed)

3 unchanged sentences

(in thousands, except share and par value data)

March 31, 2022

June 30, 2022

December 31, 2021

20 unchanged sentences

5,000,000 shares authorized;

shares issued and outstanding at March 31, 2022 and December 31, 2021

shares issued and outstanding at June 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

and 15,510,025 issued and outstanding at March 31, 2022 and December

31, 2021, respectively

22,468,682 and 15,510,025 issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands, except share and per share data)

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Operating expenses:

9 unchanged sentences

Net loss per share, basic and diluted

Basic and diluted weighted average shares used in calculating net loss per share

attributable to common stockholders

Basic and diluted weighted average shares used in calculating net loss per share attributable to common stockholders

See Accompanying Notes to these Condensed Financial Statements

11 unchanged sentences

Balance at March 31, 2021

Stock-based compensation

Sale of common stock, net

Balance at June 30, 2021

Balance at December 31, 2021

2 unchanged sentences

Balance at March 31, 2022

Stock-based compensation

Sale of common stock, net

Balance at June 30, 2022

See Accompanying Notes to these Condensed Financial Statements

2 unchanged sentences

(In thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows used in operating activities:

3 unchanged sentences

Change in fair value of liability instruments

Share-based compensation expense

Stock-based compensation expense

Change of operating lease assets and liabilities

Non-cash lease expense

5 unchanged sentences

Purchases of property and equipment

Purchase of intangible assets

Purchases of intangible assets

In process research and development acquired

4 unchanged sentences

Proceeds from exercise of warrants

Proceeds from sale of common stock

Proceeds from sale of common stock, net

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

Unpaid offering cost

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

See Accompanying Notes to these Condensed Financial Statements

1 unchanged sentence

NOTES TO CONDENSED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Basis of Presentation and New Accounting Standards

The accompanying unaudited condensed financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

The accompanying unaudited condensed financial statements as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 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 three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

These financial statements should be read in conjunction with the financial statements and notes therein included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 24, 2022.

13 unchanged sentences

Management’s estimates and assumptions are reviewed regularly, and the effects of revisions are reflected in the financial statements in the periods they are determined to be necessary.

The Company incurred net losses of $ 4.1 million for the three months ended March 31, 2022.

The Company had an accumulated deficit of $ 451.0 million as of March 31, 2022.

Additionally, the Company used net cash of $ 3.9 million to fund its operating activities for the three months ended March 31, 2022.

The Company incurred net losses of $ 9.4 million for the six months ended June 30, 2022.

The Company had an accumulated deficit of $ 456.3 million as of June 30, 2022.

Additionally, the Company used net cash of $ 6.5 million to fund its operating activities for the six months ended June 30, 2022.

As disclosed in more detail in Note 9, the Company had entered into various financing agreements, and raised capital by issuing its common stock.

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 May 24, 2022, the Company received notice from The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen below $ 1.00 per share for 30 consecutive business days, the Company no longer complied with the minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid

Requirement”).

Nasdaq’s notice has no immediate effect on the listing or trading of the Company’s common stock.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial compliance period of 180 calendar days, or until November 21, 2022, to regain compliance with the Minimum Bid Requirement.

To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $ 1.00 per share for a minimum of 10 consecutive business days prior to November 21, 2022.

If the Company does not achieve compliance with the Minimum Bid Requirement by November 21, 2022, the Company may be eligible for an additional 180 calendar days to regain compliance.

To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other Nasdaq initial listing standards, with the exception of the Minimum Bid Requirement, and provide written notice of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split if necessary.

If the Nasdaq staff determines that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for such additional compliance period, Nasdaq will provide notice that the Company’s common stock will be subject to delisting.

In the event the Company receives notice that its common stock is being delisted, Nasdaq rules permit the Company to appeal any delisting determination by the Nasdaq staff.

There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Requirement or maintain compliance with the other listing requirements.

Fair Value Measurements

11 unchanged sentences

Because some of the inputs to the Company’s valuation model are either not observable or are not derived principally from or corroborated by observable market data by correlation or other means, the warrant liability is classified as Level 3 in the fair value hierarchy.

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.

As of March 31, 2022, the fair value of the Series U Warrants was immaterial, a nd the change in the fair value of liability classified Series U Warrants during the three months ended March 31, 2022 and 2021 was not material.

Liability-classified Series U Warrants are 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.

As of June 30, 2022, the fair value of the Series U Warrants was immaterial, a nd the change in the fair value of liability classified Series U Warrants during the three and six months ended June 30, 2022 and 2021 was immaterial.

Term Loan Obligations

1 unchanged sentence

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 %.

Pursuant to the Loan and Security Agreement, as amended, the Company is required to make interest only payments through May 1, 2021 and thereafter it is required to make payments of principal and accrued interest in equal monthly installments sufficient to amortize the Term Loan through June 1, 2024, the maturity date.

Pursuant to the Loan and Security Agreement, as amended, the Company made interest only payments through May 1, 2021 and thereafter is required to make payments of principal and accrued interest in equal monthly installments sufficient to amortize the Term Loan through June 1, 2024, the maturity date.

At maturity of the Term Loan, or earlier repayment in full following voluntary prepayment or upon acceleration, the Company is required to make a final payment in an aggregate amount equal to approximately $ 3.2 million.

In connection with the Term Loan, on May 29, 2015, the Company issued to Oxford warrants to purchase an aggregate of 188 shares of the Company’s common stock at an exercise price of $ 5,175 per share.

These warrants became exercisable as of November 30, 2015 and will expire on May 29, 2025 and, following the authoritative accounting guidance, are equity classified and its respective fair value was recorded as a discount to the debt.

From September 2017 to March 2019, the Company entered into a total of seven amendments to the Term Loan which, amongst other things, extended the interest only period, required repayment of $ 3.1 million using the proceeds received from sale of the Company’s former UK and Japan subsidiaries in April 2019, increased the final payment, increased the final payment fee upon maturity or early repayment of the Term Loan, and increased the minimum liquidity covenant level to $ 2.0 million.

These warrants became exercisable as of November 30, 2015 and will expire on May 29, 2025 and, following authoritative accounting guidance, are equity classified and its respective fair value was recorded as a discount to the debt.

From September 2017 to July 2019, the Company entered into a total of eight amendments to the Term Loan which, amongst other things, extended the interest only period, required repayment of $ 3.1 million using the proceeds received from sale of the Company’s former UK and Japan subsidiaries in April 2019, increased the final payment, increased the final payment fee upon maturity or early repayment of the Term Loan, and increased the minimum liquidity covenant level to $ 2.0 million.

On March 29, 2020, the Company entered into the Ninth Amendment of the Loan and Security Agreement (the “Ninth Amendment”), pursuant to which Oxford agreed to defer the start date of principal repayment from May 1, 2020 to May 1, 2021 and extended the term of the Term Loan from September 1, 2021 to June 1, 2024 .

The principal repayment start date was further deferred to November 1, 2021.

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.

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

All other major terms remained consistent.

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

Under authoritative guidance, the Ninth Amendment did 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.

3 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 $ 3.0 million.

As of March 31, 2022, there was $ 3.6 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 each of the three months ended March 31, 2022 and 2021 was $ 0.2 million.

As of June 30, 2022, there was $ 3.1 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, 2022 and 2021 was $ 0.2 million.

The Company’s interest expense for the six months ended June 30, 2022 and 2021 was $ 0.4 and $ 0.5 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 for each of the three months ended March 31, 2022 and 2021, 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 June 30, 2022 and 2021, and $ 0.2 million and $ 0.3 million for the six months ended June 30, 2022 and 2021, 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 March 31, 2022, the Company has not received any notification or indication from Oxford to invoke the material adverse change clause.

As of June 30, 2022, the Company has not received any notification or indication from Oxford that it intends to invoke the material adverse change clause.

Loss per Share

3 unchanged sentences

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

As of March 31,

As of June 30,

Outstanding stock options

3 unchanged sentences

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time.

If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement using a discount rate based on the rate implicit in the lease or an incremental borrowing rate commensurate with the term of the lease.

If both criteria are met, the Company calculates the associated lease liability

and corresponding right-of-use asset upon lease commencement using a discount rate based on the rate implicit in the lease or an incremental borrowing rate commensurate with the term of the lease.

Lease renewable options are included in the estimation of lease term when it is reasonably certain that the Company will exercise such options.

5 unchanged sentences

The Company leases laboratory, office and storage facilities in San Antonio, Texas, under operating lease agreements that expire in 2025 .

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”).

The Charlottesville Lease has a term of 12 months and is renewable for four additional one-year periods.

The minimum lease payment is $ 30,000 for the first twelve months, subject to a 3 % annual increase if and when the lease is renewed.

The lease commencement date is April 1, 2021 and currently expires on March 31, 2023 .

The Company measured the operating lease right-of-use asset and related lease liability related to the Charlottesville Lease as of the lease commencement date.

The Company also leases certain office space in Austin, Texas under a month-to-month operating lease agreement and certain office space in Charlottesville, Virginia (the “Charlottesville Lease”).

The Charlottesville Lease has a term of 12 months and we have the ability to renew for three additional one-year periods.

The Charlottesville Lease is currently set to expire on March 31, 2023 .

The Company measured the operating lease right-of-use asset and related lease liability related to the Charlottesville Lease as of the lease commencement date of April 1, 2021 .

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

During 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 as of March 31, 2022.

During 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 as of June 30, 2022.

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

4 unchanged sentences

The Company’s operating lease liabilities and corresponding right-of-use assets are included in the condensed balance sheets.

As of March 31, 2022, weighted average discount rate used to measure operating lease liabilities and the operating leases remaining term were 9.0 % and 2.82%, respectively.

The table below summarizes the Company’s lease costs from its unaudited condensed statement of operations, and cash payments from its unaudited condensed statement of cash flows during the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

As of June 30, 2022, weighted average discount rate used to measure operating lease liabilities and the operating leases remaining term were 9.0 % and 2.52 years, respectively.

The table below summarizes the Company’s lease costs from its unaudited condensed statement of operations, and cash payments from its unaudited condensed statement of cash flows during the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Lease expense:

5 unchanged sentences

Operating cash used for operating leases

Financing cash used for finance leases

Financing cash used for financing leases

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

Total rent expenses for the three months ended March 31, 2022 and 2021 were $ 60,000 and $ 50,000 , 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 leases at March 31, 2022 are as follows (in thousands):

Total rent expenses for the six months ended June 30, 2022 and 2021 were $ 119,000 and $ 112,000 , 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 leases at June 30, 2022 are as follows (in thousands):

Operating Leases

5 unchanged sentences

Noncurrent lease obligations

Services Agreement and Statement of Work with Medidata

Services Agreement and Sales Order with Medidata

On March 31, 2022, the Company and Medidata Solutions, Inc.

(“Medidata”) entered into a Statement of Work (the “SOW”), pursuant to which Medidata will build a Sythetic Control Arm ® (SCA) platform that facilitates the use of historical clinical data to incorporate into the Company’s Phase 2 clinical trial of Rhenium-186 NanoLiposome ( 186 RNL) in recurrent glioblastoma (“GBM”).

The SOW is governed under the terms of a services agreement (the “Services Agreement”), dated November 5, 2021.

The SOW has a term of six (6) months.

The Company will pay Medidata $ 1.45 million in managed services fees and a contingent managed services fee of $ 150,000 if the U.S.

Food & Drug Administration approves a path forward for the Company to use the SCA in its clinical trial of 186 RNL for treatment of GBM.

The SOW may only be terminated for a material breach by either party or if the clinical study’s authorization or approval is withdrawn by a regulatory agency.

(“Medidata”) entered into a Sales Order (the “Sales Order”), pursuant to which Medidata will build a Synthetic Control Arm ® (SCA) platform that facilitates the use of historical clinical data to incorporate into the Company’s Phase 2 clinical trial of Rhenium-186 NanoLiposome ( 186 RNL) in recurrent glioblastoma (“GBM”).

The Sales Order is governed under the terms of a services agreement (the “Services Agreement”), dated November 5, 2021.

The Sales Order has a term of six (6) months.

The Sales Order may only be terminated for a material breach by either party, if the clinical study is terminated or if the clinical study’s authorization or approval is withdrawn by a regulatory agency.

Piramal Master Services Agreement

10 unchanged sentences

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

As of March 31, 2022 , the Company did no t have any clinical research study obligations.

As of June 30, 2022 , the Company did no t have any clinical research study obligations.

Legal proceedings

5 unchanged sentences

The Company believes that the Lorem Claim is without merit and is vigorously defending the case.

No liability was accrued as of March 31, 2022.

No liability was accrued as of June 30, 2022.

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

5 unchanged sentences

Pursuant to the UTHSA License Agreement, the Company was required to make an upfront payment, which was recorded as in-process research and development acquired in the condensed statement of operations for the year ended December 31, 2021.

The upfront payment was paid in cash in January 2022.

The upfront payment of $ 250 thousand was paid in cash in January 2022.

NanoTx License Agreement

1 unchanged sentence

(“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 cash payment and issued 230,769 shares of its common stock to NanoTx.

Cash and the fair value of common stock issued is recorded as in-process research and development expenses, pursuant to authoritative literature for asset acquisition, in the statement of operations and comprehensive loss for the year ended December 31, 2020.

Stockholders’ Equity

4 unchanged sentences

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 shares of Series B Convertible Preferred Stock outstanding as of March 31, 2022 and December 31, 2021.

There were 938 shares of Series C Preferred Stock outstanding as of March 31, 2022 and December 31, 2021.

As of March 31, 2022, 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.

There were 1,014 shares of Series B Convertible Preferred Stock outstanding as of June 30, 2022 and December 31, 2021.

There were 938 shares of Series C Preferred Stock outstanding as of June 30, 2022 and December 31, 2021.

As of June 30, 2022, 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.

6 unchanged sentences

In 2020, all but 2,500 Series U Warrants were amended and met the requirements to be classified within stockholder’s equity.

As of March 31, 2022, 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 June 30, 2022, 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

1 unchanged sentence

Under the terms and subject to the conditions of the 2020 Purchase Agreement, the Company had the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park was obligated to purchase up to $ 25.0 million of the Company’s common stock.

Such sales of common stock by the Company were subject to certain limitations, and could occur from time to time, at the Company’s sole discretion, over the 36-month period commencing on November 6, 2020, subject to the satisfaction of certain conditions.

Such sales of common stock by

the Company were subject to certain limitations, and could occur from time to time, at the Company’s sole discretion, over the 36 -month period commencing on November 6, 2020, subject to the satisfaction of certain conditions.

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.

6 unchanged sentences

During the year ended December 31, 2021, the Company issued 5,685,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 12.5 million.

During the three months ended March 31, 2022, the Company issued 5,665,000 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 7.0 million.

During the six months ended June 30, 2022, the Company issued 5,665,000 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 7.0 million.

The Company no longer has any additional shares of common stock registered to sell under the 2020 Purchase Agreement.

4 unchanged sentences

The Company may instruct Canaccord not to sell the Shares if the sales cannot be effected at or above the price designated by the Company from time to time and the Company may at any time suspend sales pursuant to the 2022 Distribution Agreement.

During the three months ended March 31, 2022, the Company issued 1,022,610 shares under the 2022 Distribution Agreement for net proceeds of approximately $ 0.7 million.

During the six months ended June 30, 2022, the Company issued 1,293,657 shares under the 2022 Distribution Agreement for net proceeds of approximately $ 0.9 million.

On October 23, 2020, the Company entered into an Equity Distribution Agreement (the “2020 Distribution Agreement”) with Canaccord.

1 unchanged sentence

During the year ended December 31, 2021, the Company issued 2,179,193 shares under the 2020 Distribution Agreement for net proceeds of $ 6.3 million.

The 2020 Distribution Agreement has been terminated.

The 2020 Distribution Agreement has been terminated after all available registered shares were fully utilized.

Stock-based Compensation

On February 6, 2020, the Company amended the Company’s 2015 New Employee Incentive Plan (the “2015 Plan”) to increase the total number of shares of common stock reserved for issuance under the plan by 250,000 shares.

Awards may only be granted under the 2015 Plan 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 March 31, 2022, there were 90,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

On June 16, 2020, the stockholders of the Company approved the Company’s 2020 Stock Incentive Plan (the “2020 Plan”), which replaced the Company’s 2014 Equity Incentive Plan.

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 issuance of up to 550,000 shares of common stock, and the number of shares available for issuance will be increased to the extent that awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan are forfeited or expire (except as otherwise provided in the 2020 Plan).

On May 17, 2021, the stockholders of the Company approved an amendment and restatement to 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.

As of March 31, 2022, 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 two-year or four-year vesting schedule with 25 % of the options vesting one year anniversary of the grant date followed by equal monthly installment vesting, and have a contractual term of 10 years.

A summary of activity for the three months ended March 31, 2022 is as follows:

Under the Company’s 2015 New Employee Incentive Plan (the “2015 Plan”), awards may only 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, 2022, there were 90,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

The Company’s 2020 Stock Incentive Plan (the “2020 Plan”), which replaced the Company’s 2014 Equity Incentive 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 to directors, officers, employees and consultants of the Company.

The 2020 Plan, as amended, provides for the issuance of up to 3,500,000 shares of common stock, plus the number of shares available for issuance is increased to the extent that awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan are forfeited or expire (except as otherwise provided in the 2020 Plan).

As of June 30, 2022, there were 627,212 shares remaining and available for future issuances under the 2020 Plan.

Generally, options issued under the 2020 Plan are subject to a two-year or four-year vesting schedule with 25 % of the options vesting on the one year anniversary of the grant date followed by equal monthly installment vesting, and have a contractual term of 10 years.

A summary of activity for the six months ended June 30, 2022 is as follows:

Exercise Price

2 unchanged sentences

Cancelled/forfeited

Balance as of March 31, 2022

Vested and expected to vest at March 31, 2022

Exercisable at March 31, 2022

As of March 31, 2022, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 1.3 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 2.79 years .

Balance as of June 30, 2022

Vested and expected to vest at June 30, 2022

Exercisable at June 30, 2022

As of June 30, 2022, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 1.2 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 2.63 years .

COVID-19 Pandemic and CARES Act

A novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization in March 2020.

COVID-19 has presented substantial public health and economic challenges and is affecting economies, financial markets and business operations around the world.

COVID-19 , including the resurgence of cases relating to the spread of new variants, has presented substantial public health and economic challenges and is affecting economies, financial markets and business operations around the world.

While the Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, the Company has not experienced a significant impact on its business and operations.

However, the Company may experience disruptions that could adversely impact its business operations as well as its preclinical studies and clinical trials.

The Company considered the impacts of COVID-19 on the assumptions and estimates used to prepare its financial statements and determined that there were no material adverse impacts on the Company’s results of operations and financial position at March 31, 2022.

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.

The CARES Act had no material impact on the Company’s income tax provision for the year ended December 31, 2021 or the three months ended March 31, 2022.

The CARES Act had no material impact on the Company’s income tax provision for the year ended December 31, 2021 or the six months ended June 30, 2022.

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

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