What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-05-18 compared with 2022-05-19 · 260 added, 234 removed, 822 unchanged (38% of the section changed)

19 unchanged sentences

Management of the Company has assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2023.

In making its assessment of internal control over financial reporting, management used the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Treadway Commission (COSO).

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2023.

98 unchanged sentences

Financing lease liabilities, non-current 23,965 24,406

Long term debt, net of discount 28,648 —

Other liabilities, non-current 472 —

Total liabilities $ 91,299 $ 49,963

6 unchanged sentences

Accumulated deficit ( 485,488 ) ( 311,204 )

Accumulated other comprehensive loss ( 973 ) ( 394 )

Accumulated other comprehensive income (loss) 5,729 ( 973 )

Total stockholders’ equity 555,292 411,229

19 unchanged sentences

Interest expense on debt obligations

Loss on extinguishment of debt

Other (expense) income

( 5,676 ) ( 1,059 )

Total other income (expense), net 278 ( 915 )

Total other income, net 3,084 278

Loss before income taxes $ ( 173,996 ) $ ( 118,036 )

Income tax provision 288 —

Net loss $ ( 174,284 ) $ ( 118,036 )

10 unchanged sentences

Foreign currency translation gain 5,483 748

Net unrealized loss on short-term investments, net of tax of $ 0

Net unrealized gain (loss) on short-term investments, net of tax of $ 0

1,219 ( 1,327 )

4 unchanged sentences

(Amounts in thousands, except share amounts)

Common stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive loss Total stockholders’ equity

Common stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive income (loss) Total stockholders’ equity

Shares Amount

Balances as of March 31, 2021 46,566,481 $ 47 $ 692,243 $ ( 193,168 ) $ ( 394 ) $ 498,728

Issuance of prefunded warrants to purchase common stock, net of $ 5,850 issuance costs

— 91,650 — — 91,650

Issuance of common stock, net of issuance costs and underwriter fees of $ 18,892

9,103,261 8 286,099 — — 286,107

Foreign currency translation adjustment — — — — 748 748

1 unchanged sentence

Exercise of stock options 768,186 — 6,862 — — 6,862

Vesting of RSUs 3,993 — — — — —

Stock-based compensation expense — — 24,254 — — 24,254

1 unchanged sentence

Balances as of March 31, 2022 47,338,660 $ 47 $ 723,359 $ ( 311,204 ) $ ( 973 ) $ 411,229

Issuance of common stock through ATM sales, net of offering costs 2,026,438 2 37,436 — — 37,438

Issuance of prefunded warrants to purchase common stock — — 92,778 — — 92,778

Issuance of common stock, net of issuance costs and underwriter fees 6,810,658 7 149,847 — — 149,854

Foreign currency translation adjustment — — — — 5,483 5,483

Unrealized loss on short-term investments — — — — ( 1,327 ) ( 1,327 )

Unrealized gain on short-term investments — — — — 1,219 1,219

Exercise of stock options 296,876 1 3,443 — — 3,444

Vesting of restricted stock units 3,993 — — — — —

Vesting of RSUs 203,681 — — — — —

Stock-based compensation expense — — 28,131 — — 28,131

13 unchanged sentences

Noncash interest expense 494 —

Loss on extinguishment of debt — 913

Unrealized foreign currency transaction losses 5,676 —

Changes in operating assets and liabilities:

6 unchanged sentences

Operating lease liabilities ( 238 ) ( 73 )

Other non-current liabilities 472 —

Net cash used in operating activities ( 128,050 ) ( 82,180 )

5 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock in follow-on public offering, net of underwriting fees and discounts

Proceeds from issuance of common stock, net of underwriting fees and discounts 149,854 —

Proceeds from issuance of prefunded warrants to purchase common stock, net of underwriting fees and discounts

Proceeds from exercise of stock options 6,862 5,745

Payment of debt issuance costs — ( 100 )

Proceeds from issuance of common stock through ATM sales, net of offering costs 37,438 —

Proceeds from long-term debt, net of debt issuance costs 28,154 —

Principal payment of finance lease obligation ( 365 ) ( 264 )

Principal payment of long-term debt — ( 10,000 )

Payment of long-term debt extinguishment costs — ( 795 )

Proceeds from exercise of stock options 3,444 6,862

Net cash provided by financing activities 311,303 6,598

32 unchanged sentences

As of the issuance date of these consolidated financial statements, the Company expects that its cash and cash equivalents and short-term investments will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance of the consolidated financial statements.

Impact of COVID-19

In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China.

Since then, COVID-19 coronavirus has spread globally.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S.

government imposed travel restrictions on travel between the United States, Europe and certain other countries.

The impact of this pandemic has been, and will likely continue to be, extensive in many aspects of society, which has resulted, and will likely continue to result, in significant disruption to the global economy as well as businesses and capital markets around the world.

In response to public health directives and orders and to help minimize the risk of the virus to employees, the Company has taken precautionary measures including establishing and maintaining an internal COVID-19 task force to ensure timely communication and decision-making in response to COVID-19, establishing work-from home policies and return-to-office policies as well as other measures to respond and adapt to the COVID-19 impact.

For those employees working from our offices, laboratories and manufacturing facilities, we have implemented stringent safety measures designed to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic and we continue to examine our protocols as the pandemic and health guidance evolves.

The Company has taken these and other precautionary steps while maintaining business continuity in order to continue to progress its programs.

While there has been no prolonged material disruption to the Company’s business to date, the impact of the virus, including work-from-home policies, may negatively impact productivity, disrupt the Company’s business, and delay its preclinical research and clinical trial activities and its development program timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct its business in the ordinary course.

Other impacts to the Company’s business may include disruptions of its suppliers or material supplies and disruptions or restrictions on its employees’ ability to travel.

Any prolonged material disruption to the Company’s employees, suppliers or supply could adversely impact the Company’s preclinical research and clinical trial activities, financial condition and results of operations, including its ability to obtain financing.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies

5 unchanged sentences

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including, expenses, research and development costs and employee-related amounts, 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 it or treat COVID-19.

We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods.

Estimates are periodically reviewed in light of reasonable changes in circumstances, facts and experience.

Changes in estimates are recorded in the period in which they become known.

Actual results could differ from those estimates or assumptions.

Foreign currency and currency translation

4 unchanged sentences

Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other income (expense), net in the consolidated statements of operations as incurred.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

Concentrations of credit risk and of significant suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents as well as short-term investments.

The Company deposits its cash in financial institutions in amounts that may exceed federally insured limits, and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company relies, and expects to continue to rely, on a small number of vendors to manufacture supplies and raw materials for its development programs.

These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.

The Company deposits its cash in financial institutions in amounts that may exceed federally insured limits.

We limit our exposure to credit risk by placing investments with high credit quality financial institutions, diversifying our investment portfolio and placing investments with maturities that maintain safety and liquidity.

To date, the Company has not experienced any losses on such accounts.

The Company relies, and expects to continue to rely, on a small number of vendors to manufacture and supply raw materials and supply services for its development programs.

These programs could be adversely affected by a significant interruption in these services or the availability of raw materials.

Cash and cash equivalents

1 unchanged sentence

Cash equivalents consisted of money market funds as of March 31, 2023 and 2022, respectively.

As of March 31, 2022 and 2021, the amount of cash equivalents included in cash and cash equivalents totaled $ 75,117 and $ 150,734 , respectively.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

As of March 31, 2023 and 2022, the amount of cash equivalents included in cash and cash equivalents totaled $ 121.5 million and $ 75.1 million, respectively.

Restricted cash

The Company holds restricted cash in segregated bank accounts in connection with a letter of credit.

As of March 31, 2022 and 2021, restricted cash consisted of $ 1,636 , held for the benefit of the landlords in connection with our leases.

As of March 31, 2023 and 2022, restricted cash consisted of $ 1.6 million, held for the benefit of the landlords in connection with our leases.

These amounts have been classified as non-current assets on the Company’s consolidated balance sheets.

Short-term investments

The Company’s short-term debt security investments are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive loss in stockholders’ equity.

The Company’s short-term debt security investments are classified as available-for-sale and are carried at fair value, with the unrealized gains and non-credit related losses reported as a component of accumulated other comprehensive loss and included in stockholders’ equity.

Realized gains and losses and declines in value determined to be other than temporary are based on the specific identification method and are included as a component of other income (expense), net in the consolidated statements of operations.

The Company evaluates its short-term debt security investments with unrealized losses for other-than-temporary impairment.

When assessing short-term debt security investments for other-than-temporary declines in value, the Company considers such factors as, among other things, how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the Company’s ability and intent to retain the short-term debt security investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions in general.

If any adjustment to fair value reflects a decline in the value of the short-term debt security investment that the Company considers to be “other than temporary,” the Company reduces the short-term debt security investment to fair value through a charge to the consolidated statements of operations.

No such adjustments were necessary during the periods presented.

For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or if it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis.

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a charge to interest income.

For available-for-sale securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, the Company considers such factors as, among other things, the severity of the impairment, any changes in interest rates, how long the market value of the investment has been less than its original cost, the Company’s ability and intent to retain the short-term debt security investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions in general.

The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income through an allowance account.

Any impairment that has not been recorded through an allowance for credit losses is included in other comprehensive loss on the statements of operations and comprehensive loss.

No credit-related losses or impairments have been recognized on the Company's investments in available-for-sale securities during the years ended March 31, 2023 or 2022.

The Company’s short-term investments as of March 31, 2023 and 2022 had maturities of less than two years.

The Company has classified its investments with maturities beyond one year as short term, based on their highly liquid nature and because they represent the investment of cash that is available for current operations.

Property, plant and equipment

1 unchanged sentence

Depreciation and amortization expense is recognized using the straight-line method over the estimated useful lives of the respective assets as follows:

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

Estimated Useful life

14 unchanged sentences

To date, the Company has not recorded any impairment losses on long-lived assets.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

Fair value measurements

8 unchanged sentences

The carrying values of research and development incentives receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities.

Furthermore, the carrying value of the Company’s long-term debt approximates its fair value as of March 31, 2023 due to its variable interest rate, which approximates a market interest rate.

Debt issuance costs

2 unchanged sentences

If the financing arrangement is canceled or forfeited, or if the utility of the arrangement to the Company is otherwise compromised, these costs are recognized as interest expense immediately.

The Company’s consolidated financial statements present debt issuance costs related to a recognized debt liability as a direct reduction from the carrying amount of that debt liability.

The Company’s consolidated financial statements

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

present debt issuance costs related to a recognized debt liability as a direct reduction from the carrying amount of that debt liability.

Segment information

11 unchanged sentences

The Company records accruals for estimated ongoing research costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

events, invoices received and contracted costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

5 unchanged sentences

The Company accounts for share-based payment awards granted to employees, consultants, and non-employees and directors using the fair value of the Company’s common stock on the grant date and compensation expense is recognized for those awards over the requisite service period, which is generally the vesting period of the respective award.

The grant date fair value is utilized for time-vested restricted stock units (“RSUs”) and the fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield (see Note 9).

The grant date fair value is utilized for time-vested restricted stock units (“RSUs”) is based on the closing price of the Company's common stock on the date of grant.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield (see Note 10).

Forfeitures are accounted for as they occur.

2 unchanged sentences

Research and development incentives and receivable

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

The Company, through its subsidiary in the United Kingdom, receives reimbursements of certain research and development expenditures as part of a United Kingdom government’s research and development tax reliefs program.

5 unchanged sentences

The research and development incentives receivable represents an amount due in connection with the above program.

The Company recorded other income from research and development incentives of $ 3,170 and $ 2,807 during the years ended March 31, 2022 and 2021, respectively, in the consolidated statements of operations and a research and development incentives receivable of $ 3,055 and $ 2,953 as of March 31, 2022 and 2021, respectively, on the consolidated balance sheets.

The Company recorded other income from research and development incentives of $ 2.9 million and $ 3.2 million during the years ended March 31, 2023 and 2022, respectively, in the consolidated statements of operations and a research and development incentives receivable of $ 2.9 million and $ 3.1 million as of March 31, 2023 and 2022, respectively, on the consolidated balance sheets.

Comprehensive loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

For the year ended March 31, 2022, comprehensive loss included $ 748 of foreign currency translation adjustments and $ 1,327 of unrealized losses on short-term investments, net of tax.

For the year ended March 31, 2021, comprehensive loss included $ 866 of foreign currency translation adjustments and $ 278 of unrealized losses on short-term investments, net of tax.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

For the year ended March 31, 2023, comprehensive loss included $ 5.5 million of foreign currency translation gains and $ 1.2 million of unrealized gains on short-term investments, net of tax.

For the year ended March 31, 2022, comprehensive loss included $ 0.7 million of foreign currency translation gains and $ 1.3 million of unrealized losses on short-term investments, net of tax.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns.

1 unchanged sentence

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

8 unchanged sentences

In periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Summary of significant accounting policies (Continued)

Recently adopted accounting pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU No.

2019-12 Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12) , which is intended to simplify the accounting for income taxes.

ASU 2019-12 removes 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.

ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP.

The new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

We adopted ASU 2019-12 effective April 1, 2021.

The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Recently issued accounting pronouncements

In June 2016, the FASB issued ASU No.

2 unchanged sentences

Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses.

In April 2019, the FASB issued ASU No.

2019-4, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies and corrects certain unintended applications of the guidance contained in each of the amended Topics.

Additionally, in May 2019, the FASB issued ASU No.

2019-5, Financial Instruments — Credit Losses (Topic 326), which provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost.

The standard is effective for fiscal years and interim periods beginning after December 15, 2022.

Early adoption is permitted for all periods beginning after December 15, 2018.

The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial statements.

The Company adopted ASU 2016-13 as of April 1, 2022.

The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements.

Fair value of financial assets and liabilities

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Fair value of financial assets and liabilities (Continued)

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:

1 unchanged sentence

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ — $ 121,455 $ — $ 121,455

Short-term investments:

US Government Agency bonds — 240,355 — 240,355

3 unchanged sentences

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ — $ 75,117 $ — $ 75,117

Short-term investments:

US Government Agency bonds — 26,688 — 26,688

11 unchanged sentences

March 31, 2023

Amortized cost Gross unrealized gains Gross unrealized losses Fair value

Amortized cost Gross unrealized gains Gross unrealized losses Credit Losses Fair value

US Government agency bonds $ 240,371 $ 187 $ ( 203 ) $ — $ 240,355

1 unchanged sentence

$ 436,859 $ 264 $ ( 327 ) $ — $ 436,796

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Short-term investments (Continued)

March 31, 2022

Amortized cost Gross unrealized gains Gross unrealized losses Fair value

Amortized cost Gross unrealized gains Gross unrealized losses Credit Losses Fair value

US Government agency bonds $ 26,827 $ — $ ( 139 ) $ — $ 26,688

4 unchanged sentences

Treasury bonds which have maturities between one and two years and an aggregate fair value of $ 15.1 million and $ 7.6 million, respectively.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Property, plant and equipment, net

20 unchanged sentences

Hercules Loan Agreement

On August 8, 2019, (the “Closing Date”) the Company and certain of its affiliates entered into a Loan and Security Agreement (as amended, the “Hercules Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”) pursuant to which Hercules agreed to make available to the Company a secured term loan facility in the amount of $ 30,000 (the “Term Loan Facility”), subject to certain terms and conditions.

The Company borrowed $ 10,000 under the Hercules Loan Agreement in one advance as a single tranche term Loan on the Closing Date upon which the Company paid a $ 225 facility charge and incurred $ 130 in additional closing and legal fees.

On June 1, 2020, the Company entered into the First Amendment to the Hercules Loan Agreement (the “Hercules First Amendment”), to, among other things, increase the aggregate principal amount of the secured term loan facility from $ 30,000 to $ 40,000 .

Pursuant to the Hercules First Amendment, subject to the achievement of certain milestones, the Company could have borrowed three tranches of up to $ 10,000 between October 1, 2020 and December 15, 2020, July 1, 2020 and June 30, 2021, and July 1, 2021 and December 15, 2021, respectively.

The Company incurred $ 100 in additional closing and legal fees in connection with Hercules First Amendment which were capitalized and will be amortized as part of the effective yield.

On December 15, 2020, the Company entered into a Payoff Letter with respect to the Hercules Loan Agreement, which resulted in a loss on extinguishment of debt of $ 913 including both cash and non-cash expense.

Pursuant to the Payoff Letter, the Company paid a total of $ 10,839 to Hercules, representing $ 10,000 in outstanding principal, $ 495 end of term charge, $ 300

On October 6, 2022, the Company entered into a Loan and Security Agreement (the “Loan Agreement”), with Hercules Capital, Inc., as administrative agent, collateral agent and as a lender (“Hercules”).

Pursuant to the Loan Agreement, the Company can borrow term loans in an aggregate maximum principal amount of up to $ 200.0 million under multiple tranches (the “Term Loan Facility”).

Under the Loan Agreement, the Company borrowed an initial amount of $ 30.0 million on the

REPLIMUNE GROUP, INC.

2 unchanged sentences

Long-term debt (Continued)

early termination fee due and $ 44 in accrued interest owed to Hercules under the Hercules Loan Agreement.

In connection with the execution of the Payoff Letter and the repayment of the Company’s outstanding obligations under the Hercules Loan Agreement, the Hercules Loan Agreement and the related loan documents were terminated.

The Term Loan Facility was secured by substantially all of the Company’s assets, but excluding its intellectual property, and subject to certain exceptions and exclusions.

All liens on the Company’s assets held by Hercules were released in connection with the execution of the Payoff Letter.

In connection with entering into the Hercules Loan Agreement the Company paid Hercules $ 355 and $ 100 of upfront fees, respectively.

Such upfront fees included closing costs and legal fees associated with entering into the respective agreements, and were recorded as a debt discount.

The Company recognized aggregate interest expense under the Hercules Loan Agreement of $ 818 during the year ended March 31, 2021, which included non-cash interest expense of $ 181 .

Non-cash interest expense included the amortization of the debt discount of $ 82 and the accretion of the final payment of $ 99 , respectively.

There were no principal payments due or paid under the Hercules Loan Agreement during the year ended March 31, 2022.

Closing Date, and at the Company's sole option, can draw down an additional $ 30.0 million on or prior to September 30, 2023, as well as additional term loan advances in an aggregate principal amount of up to $ 115.0 million during the term of the Term Loan Facility subject to achievement of specified performance milestones, and two additional term loan advances up to an aggregate principal amount of $ 25.0 million subject to certain terms and conditions, on or prior to the end of the interest-only period.

The Company intends to use the proceeds of the Term Loan Facility for working capital and general corporate purposes.

The Term Loan Facility will mature on October 1, 2027 (the “Maturity Date”).

The outstanding principal balance of the Term Loan Facility bears interest payable in cash at a floating rate per annum equal to the greater of (i) 7.25 % and (ii) the sum of the Prime Rate (which is capped at 7.25 %) and 1.75 %.

Accrued interest is payable monthly following the funding of each term loan advance.

In addition, the principal balance of the Term Loan Facility will bear “payment-in-kind” interest at the rate of 1.50 % (“PIK Interest”), which PIK Interest will be added to the outstanding principal balance of the Term Loan Facility on each interest payment date.

Borrowings under the Loan Agreement are repayable in monthly interest-only payments through September 2026.

After the interest-only payment period, borrowings under the Loan Agreement are repayable in equal monthly payments of principal and accrued interest until October 2027.

At the Company's option, the Company may prepay all or a portion of the outstanding borrowings, subject to a prepayment fee of 3.0 % of the principal amount if prepayment occurs during the 12 months following the Closing Date, 2.0 % after 12 months following the Closing Date but prior to 36 months following the Closing Date, and 1.0 % thereafter.

The Loan Agreement contains customary facility fees, events of default and representations, warranties and affirmative and negative covenants, including a financial covenant requiring us to maintain certain levels of cash in accounts subject to a control agreement in favor of the Agent (the “Unrestricted Cash”) at all times commencing on January 1, 2024.

In addition, the Loan Agreement also contains a financial covenant that beginning on the later of (i) July 1, 2024 and (ii) the date on which the aggregate outstanding principal amount of the Term Loan Facility is equal to or greater than $ 100.0 million, the Company is required to satisfy one of the following requirements:

(1) achieve a minimum amount of trailing three-month net product revenue tested on a monthly basis, (2) maintain a market capitalization in excess of $ 1.2 billion and Unrestricted Cash in an amount no less than 50 % of the outstanding amount under the Term Loan Facility, or (3) maintain Unrestricted Cash in an amount no less than 85 % of the outstanding amount under the Term Loan Facility.

The Company paid a $ 0.5 million facility charge and incurred debt issuance costs of $ 1.5 million upon closing of the Loan Agreement.

The Loan Agreement also provides for a final payment, payable upon maturity or the repayment of the obligations in full or in part (on a pro rata basis), equal to 4.95 % of the aggregate principal amount of Term Loans advanced to the Borrower and repaid on such date, which is being accrued on the Company's consolidated balance sheet.

As of March 31, 2023, the amount accrued for the final payment is $ 0.2 million.

Unamortized debt issuance costs are recorded as a reduction of the carrying amount on the term loan and amortized as interest expense using the effective-interest method.

In addition, unamortized deferred financing costs of $ 0.2 million were recorded in other assets as of March 31, 2023 related to the Company's right to borrow additional amounts from Hercules in the future and amortized to interest expense over the relevant draw period on a straight-line basis.

Interest expense for the twelve months ended March 31, 2023 was $ 2.0 million.

The summary of obligations under the term loan as of March 31, 2023 consisted of the following (in thousands):

March 31, 2023

Principal loan balance $ 30,222

Facility charge and diligence fee ( 315 )

Unamortized issuance costs ( 1,410 )

Accumulated end of term fee 151

Long term debt, net $ 28,648

The annual principal payments due under the Loan Agreement as of March 31, 2023 were as follows:

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Long-term debt (Continued)

March 31, 2023

Thereafter 18,701

Total $ 32,139

The table of future payments of long-term debt excludes the end of term charge of $ 1.5 million, which is due upon the maturity of the loan.

Stockholders’ Equity

As of March 31, 2023 and 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 150,000,000 shares of common stock, par value $ 0.001 per share.

As of March 31, 2022 and 2021, the Company had reserved 16,605,804 and 14,572,115 shares of common stock for the exercise of outstanding stock options and the vesting of restricted share units, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s Employee Stock Purchase Plan (see Note 9) and the exercise of the outstanding warrants to purchase shares of common, respectively.

The Company had reserved for common stock for the exercise of outstanding stock options and the vesting of restricted share units, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s Employee Stock Purchase Plan (see Note 10) and the exercise of the outstanding warrants to purchase shares of common stock as follows:

March 31, 2023 March 31, 2022

Stock options, issued and outstanding 7,454,828 6,514,334

Restricted stock units 1,351,280 826,213

Stock options and restricted stock units, future issuance 2,209,597 1,933,300

Employee stock purchase plan, available for future grants 2,076,603 1,550,375

Pre-IPO warrants to purchase common stock 497,344 497,344

Pre-funded warrants 9,484,238 5,284,238

Total shares of common stock reserved for future issuance 23,073,890 16,605,804

Undesignated preferred stock

1 unchanged sentence

There were no undesignated preferred shares issued or outstanding as of March 31, 2023.

In August 2019, the Company entered into a Sales Agreement (as amended, the “Sales Agreement”) with SVB Leerink LLC (the “Agent”), pursuant to which the Company could sell, from time to time, at its option, up to an aggregate amount of $ 75,000 of shares of the Company’s common stock, $ 0.001 par value per share through the Agent, as the Company’s sales agent.

In June 2020, the 2019 Sales Agreement was amended to reduce the aggregate offering amount under the 2019 Sales Agreement from $ 75,000 of shares to $ 30,000 of shares.

On August 11, 2020, the 2019 Sales Agreement was terminated by the execution by the Company and the Agent of a new sales agreement, which was subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”).

Under the 2020 Sales Agreement the Company may sell, from time to time, at its option, up to an aggregate of $ 62,500 of shares of the Company’s common stock, $ 0.001 par value per share (the “Shares”), through the Agent, as the Company’s sales agent.

Any Shares to be offered and sold under the 2020 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”), as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended or in negotiated transactions, if authorized by the Company, and (ii) pursuant to, and only upon the effectiveness of, a registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on August 11, 2020 for an offering of up to $ 350,000 of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one or more public offerings.

Subject to the terms of the 2020 Sales Agreement, the Agent will use reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or

On August 11, 2020, the Company and SVB Leerink (the "Agent") entered into a sales agreement, which was subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”), pursuant to which the Company could sell, from time to time, at its option, up to an aggregate of $ 62.5 million of shares of the Company’s common stock, $ 0.001 par value per share (the “Shares”), through the Agent, as the Company’s sales agent.

During the twelve months ended March 31, 2023, the Company settled transactions that occurred pursuant to the 2020 Sales Agreement, whereby the Company issued and sold an aggregate of 1,686,438 shares of its common stock, resulting in gross proceeds of $ 32.0 million, before deducting fees of $ 1.0 million.

The Company did no t issue or sell any shares under the 2020 Sales Agreement during the year ended March 31, 2022.

REPLIMUNE GROUP, INC.

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Stockholders’ Equity (Continued)

conditions the Company may impose).

The Company cannot provide any assurances that it will issue any additional Shares pursuant to the 2020 Sales Agreement.

On June 23, 2022, the 2020 Sales Agreement was terminated by the execution by the Company and the Agent of a new sales agreement (the “2022 Sales Agreement”).

Under the 2022 Sales Agreement, the Company may sell, from time to time, at its option, up to an aggregate $ 100.0 million of shares of the Company's common stock, $ 0.001 par value per share (the "Shares"), through the Agent, as the Company's sales agent.

Any Shares to be offered and sold under the 2022 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”) as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if authorized by the Company, in negotiated transactions or block trades, and (ii) pursuant to a registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on June 23, 2022 for an offering of up to $ 400.0 million of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one or more public offerings.

Subject to the terms of the 2022 Sales Agreement, the Agent will use reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose).

The Company will pay the Agent a commission of up to 3.0 % of the gross proceeds from the sale of the Shares.

The Company has also agreed to provide the Agent with customary indemnification rights.

The Company did not issue or sell any shares under the 2020 Sales Agreement during the year ended March 31, 2022.

For additional information, see Note 17 to these consolidated financial statements.

During the twelve months ended March 31, 2023, pursuant to the 2022 Sales Agreement, the Company issued and sold an aggregate of 340,000 shares of its common stock, resulting in gross proceeds of $ 6.7 million, before deducting fees of $ 0.3 million.

The Company cannot provide any assurances that it will issue any additional Shares pursuant to the 2022 Sales Agreement.

Equity offerings

In November 2019, pursuant to an underwriting agreement (the “November 2019 Underwriting Agreement”) with J.P.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (the “November 2019 Underwriters”), the Company issued and sold to the November 2019 Underwriters (a) 4,516,561 shares of the Company’s common stock (the “November 2019 Shares”), inclusive of the November 2019 Underwriters partially exercised 30-day option and purchased an additional 838,530 shares of the Company’s common stock, and (b) pre-funded warrants to purchase 2,200,000 shares of the Company’s common stock (the “November 2019 Pre-Funded Warrants”).

The November 2019 shares were sold to the November 2019 Underwriters (the “November 2019 Offering”) at the public offering price of $ 13.61 per share and the pre-funded warrants were sold at a public offering price of $ 13.6099 per November 2019 Pre-Funded Warrant, which represented the per share public offering price for November 2019 Shares less a $ 0.0001 per share exercise price for each such November 2019 Pre-Funded Warrant.

The Company received aggregate net proceeds of approximately $ 85,598 in the November 2019 Offering, after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 5,814 .

Funds affiliated with Redmile Group, LLC purchased all of the November 2019 Pre-Funded Warrants.

The November 2019 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of November 2019 Pre-Funded Warrants may not exercise the November 2019 Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

In June 2020, pursuant to an underwriting agreement (the “June 2020 Underwriting Agreement”) with J.P.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (“the June 2020 Underwriters”), the Company sold to the June 2020 Underwriters (a) 3,478,261 shares of the Company’s common stock (the “June 2020 Shares”), inclusive of the underwrites 30-day option to purchase up to an additional 652,173 shares of the Company’s commons stock, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock (the “June 2020 Pre-Funded Warrants”).The June 2020 Shares of the Company’s common stock were sold to the June 2020 Underwriters at the public offering price of $ 23.00 per share and the June 2020 Pre-Funded Warrants were sold at a public offering price of $ 22.9999 per June 2020 Pre-Funded Warrant, which represented the per share public offering price for the June 2020 shares less a $ 0.0001 per share exercise price for each such June 2020 Pre-Funded Warrant.

The Company received aggregate net proceeds of approximately $ 107,782 after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 7,217 .

Funds affiliated with Redmile Group, LLC and funds affiliated with a second institutional investor purchased all of the June 2020 Pre-Funded Warrants.

The June 2020 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of June 2020 Pre-Funded Warrants may not exercise the June 2020 Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of June 2020 Pre-Funded Warrants may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

In October 2020, pursuant to an underwriting agreement with J.P.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein, the Company issued and sold to the underwriters (a) 5,625,000 shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional 937,500 shares of the Company’s common stock, and (b) pre-funded warrants to purchase 1,562,500 shares of the Company’s common stock (the “October 2020 Pre-Funded Warrants”).

The shares of the Company’s common stock were sold to the underwriters at the public offering price of $ 40.00 per share and the pre-funded warrants were sold at a public offering price of $ 39.9999 per October 2020 Pre-Funded Warrant, which represented the per share public offering price for the Company’s common stock less a $ 0.0001 per share exercise price for each such pre-funded warrant.

The Company received aggregate net proceeds of

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Stockholders’ Equity(Continued)

approximately $ 269,975 after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 17,525 .

Funds affiliated with Redmile Group, LLC and funds affiliated with a second institutional investor purchased all of the October 2020 Pre-Funded Warrants.

The October 2020 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of October 2020 Pre-Funded Warrants may not exercise the October 2020 Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of October 2020 Pre-Funded Warrants may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

Other than as set forth in Note 9 and Note 10 to these consolidated financial statements, the 5,284,238 Pre-Funded Warrants are not included in the number of issued and outstanding shares of the Company’s common stock set forth herein.

As of March 31, 2022, none of the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, or the October 2020 Pre-Funded Warrants had been exercised.

In November 2019, the Company completed a public offering of (a) 4,516,561 shares of the Company’s common stock at a public offering price of $ 13.61 per share, inclusive of the underwriters partially exercised 30-day option to purchase an additional 838,530 shares of the Company’s common stock, and (b) pre-funded warrants to purchase 2,200,000 shares of the Company’s common stock at a public offering price of $ 13.6099 per warrant.

The Company received aggregate net proceeds of approximately $ 85.6 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 5.8 million.

In June 2020, the Company completed a public offering of (a) 3,478,261 shares of the Company’s common stock, inclusive of the June 2020 Underwriters fully exercised 30-day option to purchase 652,173 shares of the Company's common stock at a public offering price of $ 23.00 per share, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock at a public offering price of $ 22.9999 per warrant.

The Company received aggregate net proceeds of approximately $ 107.8 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 7.2 million.

In October 2020, the Company completed a public offering of (a) 5,625,000 shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional 937,500 shares of the Company’s common stock, at a public offering price of $ 40.00 per share and (b) pre-funded warrants to purchase 1,562,500 shares of the Company’s common stock at a public offering price of $ 39.9999 per warrant.

The Company received aggregate net proceeds of approximately $ 270.0 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 17.5 million.

In December 2022, the Company completed a public offering of (a) 6,810,658 shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional 1,436,172 shares of the Company’s common stock, at a public offering price of $ 23.50 per share and (b) pre-funded warrants to purchase 4,200,000 shares of the Company’s common stock at a public offering price of $ 23.4999 per warrant.

The Company received aggregate net proceeds of approximately $ 242.6 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 16.1 million.

Pre-funded Warrants

The pre-funded warrants described above are exercisable at any time after the date of issuance.

Unless otherwise modified by a holder of a pre-funded warrant, no holder may exercise a pre-funded warrant if such holder, together with its affiliates,

would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

The 9,484,238 shares of the Company's common stock underlying the above described pre-funded warrants, are not included in the number of issued and outstanding shares of the Company’s common stock outstanding as reported on the consolidated balance sheet, though they are included in the Company's annual pool increase calculation as well as the weighted average outstanding common stock in the calculation of basic and diluted net loss per share, as noted below in Note 11.

As of March 31, 2023, no pre-funded warrants had been exercised.

In April 2023, a holder of the Company's pre-funded warrants exercised 1,016,528 of its pre-funded warrants and the Company issued 1,016,528 shares of common stock.

Stock-based compensation

17 unchanged sentences

Subsequent to the Reorganization, no additional grants have been or will be made under the 2015 Plan and any outstanding awards under the 2015 Plan have continued, and will continue with their original terms.

The Company concluded that the cancellation of the 2015 Plan and issuance of replacement awards under the 2017 Plan

The Company concluded that the cancellation of the 2015 Plan and issuance of replacement awards under the 2017 Plan was a modification with no change in the material rights and preferences and therefore no recorded change in the fair value of each respective award.

REPLIMUNE GROUP, INC.

2 unchanged sentences

Stock-based compensation (Continued)

was a modification with no change in the material rights and preferences and therefore no recorded change in the fair value of each respective award.

The Company’s 2017 Plan provides for the Company to grant incentive stock options or non-statutory stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.

9 unchanged sentences

If any options or stock appreciation rights, including outstanding options and stock appreciation rights granted under the 2017 Plan (up to 2,520,247 shares), terminate, expire, or are canceled, forfeited, exchanged, or surrendered without having been exercised, or if any stock awards, stock units or other stock-based awards, including outstanding awards granted under the 2017 Plan, are forfeited, terminated, or otherwise not paid in full in shares of common stock, the shares of the Company’s common stock subject to such grants will be available for purposes of our 2018 Plan.

The number of shares reserved for issuance under the 2018 Plan will increase automatically on the first day of each April equal to 4.0 % of the total number of shares of Company stock outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the number of shares issuable upon exercise of the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, and the October 2020 Pre-Funded Warrants, or such lesser amount as determined by the Board.

The number of shares reserved for issuance under the 2018 Plan will increase automatically on the first day of each April equal to 4.0 % of the total number of shares of Company stock outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the 9,484,238 shares issuable upon exercise of those pre-funded warrants described in Note 9 to these consolidated financial statements, or such lesser amount as determined by the Board.

On April 1, 2022, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,104,915 shares pursuant to the terms of the 2018 Plan and based on total number of shares of Company stock outstanding on March 31, 2022.

10 unchanged sentences

Employee Stock Purchase Plan

On July 9, 2018, the Company’s board of directors adopted and the Company’s stockholders approved the Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

The total shares of common stock initially reserved for issuance under the ESPP is limited to 348,612 shares.

In addition, as of the first trading day of each fiscal year during the term of the ESPP (excluding any extensions), an additional

REPLIMUNE GROUP, INC.

2 unchanged sentences

Stock-based compensation (Continued)

The total shares of common stock initially reserved for issuance under the ESPP is limited to 348,612 shares.

In addition, as of the first trading day of each fiscal year during the term of the ESPP (excluding any extensions), an additional number of shares of the Company’s common stock equal to 1 % of the total number of shares outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the number of shares issuable upon exercise of the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, and the October 2020 Pre-Funded Warrants, or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s board of directors) will be added to the number of shares authorized under the ESPP.

number of shares of the Company’s common stock equal to 1 % of the total number of shares outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the 9,484,238 shares issuable upon exercise of those pre-funded warrants described in Note 9 to these consolidated financial statements, or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s board of directors) will be added to the number of shares authorized under the ESPP.

In accordance with the terms of the ESPP, on April 1, 2022 and 2021, the number of shares reserved for issuance under the ESPP automatically increased by 526,228 and 518,507 shares, respectively, for a total of 2,076,603 shares reserved for the ESPP.

7 unchanged sentences

The inducement grant is included in the stock option and RSU award tables below.

In December 2022, the Company granted an equity award to a newly hired executive as a material inducement to enter into employment with the Company.

The grant constitutes an "employment inducement grant" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and was issued outside of the 2018 Plan and each of the other stock incentive plans described above.

The inducement grant included a nonqualified stock option to purchase up to 82,500 shares of the Company's common stock, as well as a restricted stock unit grant representing 55,000 shares of the Company's common stock.

These stock option and restricted stock unit inducement grants have terms and conditions consistent with those set forth under the 2018 Plan and vest under the same respective vesting schedules as stock option and restricted stock unit awards granted under the 2018 Plan.

The inducement grant is included in the stock option and RSU award tables below.

Stock option valuation

25 unchanged sentences

Options exercisable as of March 31, 2023 4,725,073 $ 14.43 5.93 $ 28,570

Options exercisable as of March 31, 2022 3,645,749 $ 10.85 6.31 $ 24,875

Options vested and expected to vest as of March 31, 2023 7,454,828 $ 17.24 6.88 $ 31,244

As of March 31, 2023, there was $ 34.8 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.4 years.

20 unchanged sentences

Net loss per share (Continued)

The November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants and October 2020 Pre-Funded Warrants are included as outstanding common stock in the calculation of basic and diluted net loss per share.

The 9,484,238 shares of the Company's common stock issuable upon exercise of Pre-Funded Warrants described in Note 9 to these consolidated financial statements are included as outstanding common stock in the calculation of basic and diluted net loss per share.

The Company’s potentially dilutive securities, which include stock options and warrants to purchase common stock have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

20 unchanged sentences

The Company and Regeneron are each independently developing compounds for the treatment of certain tumor types.

Pursuant to the agreement, the Company and Regeneron will undertake one or more clinical trials using a combination of the compounds being developed by each entity.

Under the agreement, each study will be conducted under terms set out in a separately agreed upon study plan that will identify the name of the sponsor and which party will manage the particular clinical trial, and include the protocol, the budget and a schedule of clinical obligations.

In June 2018, under the terms of the agreement between the Company and Regeneron, the parties agreed to the first study plan.

The Company and Regeneron have agreed to the protocol, budget, sample testing and clinical obligations schedule under the study plan.

Development and supply costs associated with the study plan will be split equally between the Company and Regeneron.

Pursuant to the terms of the agreement, each party granted the other party a non-exclusive license under its respective intellectual property and agreed to contribute the necessary resources needed to fulfill its respective obligations, in each case,

Pursuant to the agreement the Company agreed to undertake one or more clinical trials with Regeneron for the administration of our product candidates in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron, across multiple solid tumor types.

The first of which, agreed in June 2018, is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

Each clinical trial will be conducted pursuant to an agreed study plan which, among other things, will identify the name of the sponsor and which party will manage the particular study, and include the protocol, the budget and a schedule of clinical obligations.

The first study plan related to the Phase 2 clinical trial in CSCC has been agreed.

REPLIMUNE GROUP, INC.

2 unchanged sentences

Significant agreements (Continued)

under the terms of the agreed-upon or to-be agreed upon study plans.

Development costs of a particular clinical trial will be split equally between the Company and Regeneron in accordance with the agreed upon study plan.

Development costs of a particular clinical trial will be split equally.

The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature.

The agreement also contains certain time-based covenants that restrict us from entering into a third-party arrangement with respect to the use of our product candidates in combination with an anti-PD-1 therapy and that restrict Regeneron from entering into a third-party arrangement with respect to the use of cemiplimab in combination with an HSV-1 virus, in each case, for the treatment of a tumor type that is the subject of a clinical trial to which the covenants apply.

Unless otherwise mutually agreed in a future study plan, these covenants are only applicable to our ongoing Phase 2 clinical trial in CSCC.

The agreement may be terminated by either party if (i) there is no active study plan for which a final study report has not been completed and the parties have not entered into a study plan for an additional clinical trial within a period of time after the delivery of the most recent final study report or (ii) in the event of a material breach.

The agreement with Regeneron is accounted for under ASC 808, Collaborative Arrangements (“ASC 808”), as both parties are active participants and each party pays its own compound costs and share equally in development costs.

The Company will account for costs incurred as part of the study, including costs to supply compounds for use in the study, as research and development expenses within the consolidated statement of operations.

The Company will recognize any amounts received from Regeneron in connection with this agreement as an offset to research and development expense within the consolidated statement of operations.

Under the terms of the agreement, on a quarterly basis the Company and Regeneron true-up costs of the study and make corresponding payments to the party that incurred the majority of the costs.

During the years ended March 31, 2022 and 2021, the Company did not make any payments under the terms of the agreement to Regeneron.

The Company accounts for costs incurred as part of the study, including costs to supply compounds for use in the study, as research and development expenses within the consolidated statement of operations.

The Company recognizes any amounts received from Regeneron in connection with this agreement as an offset to research and development expense within the consolidated statement of operations.

In July 2022, Regeneron informed the Company that the costs of the study have reached the initial budget for the initial study plan of June 2018 and that Regeneron's reimbursement of CERPASS study costs to the Company have completed in the period ending June 30, 2022 in relation to the initial study budget.

As a result of this notice from, and the ongoing communications with, Regeneron, we have not recorded any cost-sharing reimbursements from Regeneron in prepaid expenses and other current assets in the consolidated balance sheet or as an offset to research and development expense within the consolidated statement of operations since Regeneron informed us that Regeneron’s reimbursement of CERPASS study costs have completed.

The Company does not expect any further reimbursements from Regeneron related to the initial study plan of June 2018.

During the year ended March 31, 2023 and 2022, the Company recorded $ 1.1 million and $ 6.8 million, respectively as an offset to research and development expenses.

During the years ended March 31, 2023 and 2022, the Company did not make any payments to Regeneron under the terms of the agreement.

During the years ended March 31, 2023 and 2022, the Company received payments under the terms of the agreement from Regeneron of $ 3.1 million and $ 6.1 million, respectively.

As of March 31, 2022 and 2021, the Company recorded $ 2.0 million and $ 1.3 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

As of March 31, 2023 and 2022, the Company had a balance of $ 0.0 million and $ 2.0 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

Commitments and contingencies

5 unchanged sentences

As a result, all contract consideration is allocated to the single lease component.

In October 2021, the Company entered into an agreement to lease approximately 2,951 square feet of research and development, office and laboratory space in Abingdon, Oxfordshire, United Kingdom.

Pursuant to the lease agreement, the lease term commenced on November 1, 2021 with rental payments scheduled to commence on February 1, 2022.

In March 2023, the Company entered into an agreement to lease approximately 2,058 square feet of research and development, office and laboratory space in Abingdon, Oxfordshire, United Kingdom.

Pursuant to the lease agreement, the lease term commenced on March 31, 2023 with rental payments scheduled to commence on June 30, 2023.

The lease term is for five years with no option for renewal.

1 unchanged sentence

The Company recorded a right-of-use asset and a lease liability of approximately $ 0.3 million upon commencement of the lease and the lease is classified as an operating lease.

The Company’s leases have remaining lease terms of eight years to seventeen years .

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Commitments and contingencies (Continued)

The Company’s leases have remaining lease terms of seven years to sixteen years .

Some of our leases include one or more options to renew with renewal terms that can extend the lease for additional years, or options to terminate the leases, both at the Company’s discretion.

3 unchanged sentences

Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Commitments and contingencies (Continued)

The table below presents the lease-related costs which are included in the consolidated statements of operations for the years ended as of March 31, 2023 and 2022:

10 unchanged sentences

Selling, general and administrative 358 358

Other income (expense) 2,223 2,242

Other income 2,197 2,223

Operating Lease Costs

34 unchanged sentences

Right-to-use asset obtained in exchange for new operating lease liabilities

$ 363 $ 1,580

Right-to-use asset obtained in exchange for new financing lease liabilities

Weighted-average remaining lease term – operating leases 6.6 years 7.7 years

5 unchanged sentences

The Company has entered into an agreement with a contract manufacturing organization to provide clinical trial products.

As of March 31, 2022 and 2021, the Company had committed to minimum payments under these arrangements totaling $ 1,951 and $ 1,651 through March 31, 2022.

As of March 31, 2023 and 2022, the Company had committed to minimum payments under these arrangements totaling $ 1.0 million and $ 2.0 million through March 31, 2023.

Indemnification agreements

6 unchanged sentences

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

Benefit plans

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Benefit plans

The Company established a defined-contribution savings plan under Section 401(k) of the Code (the “401(k) Plan”).

3 unchanged sentences

We provide a pension contribution plan for our employees in the United Kingdom, pursuant to which we match our employees’ contributions each year in amounts up to 8 % of their annual base salary.

During the years ended March 31, 2022 and 2021, the Company recorded no income tax benefits for the net losses incurred due to the uncertainty of the realization of such losses.

The Company’s net loss before income taxes were generated in the United States and the United Kingdom.

Net loss before income taxes for the years ended March 31, 2022 and 2021 were as follows:

Loss before income taxes for the years ended March 31, 2023 and 2022 were as follows:

Year Ended March 31,

United States $ ( 18,367 ) $ ( 28,985 )

Foreign (United Kingdom) ( 89,051 ) ( 58,095 )

United Kingdom ( 155,629 ) ( 89,051 )

Total $ ( 173,996 ) $ ( 118,036 )

During the year ended March 31, 2023, the Company recorded an income tax provision of $ 0.3 million related to U.S.

current taxes primarily due to the transfer pricing arrangement between the U.S.

and the U.K., as well as unfavorable adjustments related to stock compensation, resulting in U.S.

taxable income reduced by certain prior year available net operating losses.

During the year ended March 31, 2022, the Company recorded no income tax benefit for the net operating losses incurred due to the uncertainty of the realization of such losses.

A reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate for the years ended March 31, 2022 and 2021 is as follows:

federal statutory income tax rate to the Company’s effective tax rate for the years ended March 31, 2023 and 2022 is as follows:

Year Ended March 31,

1 unchanged sentence

State taxes, net of federal benefit - 0.6 % - 0.3 %

Research and development credits 0.0 % - 0.8 %

Research and development expenses 1.0 % 1.9 %

Return to provision - 0.2 % 0.0 %

Research and development 1.0 % 1 %

Stock compensation - 0.1 % - 2.1 %

10 unchanged sentences

Deferred tax assets:

Federal net operating loss carryforwards $ 9,827 $ 7,083

Foreign net operating loss carryforwards 48,588 22,195

State net operating loss carryforwards 2,697 2,358

Net operating loss carryforwards $ 93,788 $ 61,112

Research & development credits — 1,000

2 unchanged sentences

Stock compensation 14,757 8,922

Accrued expense 1,452 739

Accrued expenses 2,906 1,452

Lease liability 7,964 7,309

Other 24 310.00

Total deferred tax assets 125,275 85,758

3 unchanged sentences

Right of use asset ( 11,386 ) ( 10,866 )

Other — ( 9 )

Total deferred tax liabilities ( 11,386 ) ( 10,866 )

Net deferred tax assets (liabilities) $ — $ —

As of March 31, 2022, the Company had federal and foreign net operating loss carryforwards of approximately $ 46,797 and $ 194,354 , respectively, which can be carried forward indefinitely.

As of March 31, 2022, the Company had state net operating loss carryforwards of $ 42,710 , which will begin to expire in 2039.

As of March 31, 2022, the Company had federal and state research and development carryforwards of approximately $ 709 and $ 367 , respectively, which will begin to expire in 2041 and 2036, respectively.

As of March 31, 2023, the Company had U.S.

federal operating loss carryforwards of approximately $ 39.7 million, which can be carried forward indefinitely subject to 80% limitation of taxable income when utilized.

As of March 31, 2023, the Company had U.S.

state operating loss carryforwards of $ 50.3 million, which will begin to expire in 2039.

As of March 31, 2023, the Company had U.K.

operating loss carryforwards of approximately $ 332.7 million, which can be carried forward indefinitely.

federal and state, as well as U.K., net operating loss carryforwards are based on tax returns filed and does not reflect uncertain tax positions in the U.S.

and offsetting positions in the U.K.

related to the transfer pricing arrangement.

Utilization of the U.S.

3 unchanged sentences

Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization.

Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Income taxes(Continued)

Changes in the valuation allowance for deferred tax assets during the years ended March 31, 2023 and 2022 related primarily to the increase in net operating loss carryforwards were as follows:

2 unchanged sentences

Increases recorded to income tax provision 41,063 36,679

(Decreases) increases recorded to income tax provision for equity $ ( 1,815 ) $ 76

Decreases recorded to equity ( 2,066 ) ( 1,815 )

Valuation allowance as of end of year $ 113,889 $ 74,892

As of March 31, 2022 and 2021, the Company had no t recorded any amounts for unrecognized tax benefits.

The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

As of March 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the Company’s consolidated statements of operations and comprehensive loss.

The Company files income tax returns in the United States, Massachusetts and the United Kingdom as prescribed by the tax laws of the jurisdictions in which it operates.

Changes in the Company's gross unrecognized tax benefits from uncertain tax positions consisted of the following:

REPLIMUNE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except share and per share amounts)

Income taxes(Continued)

Year Ended March 31,

Unrecognized tax benefits as of beginning of year $ — $ —

Increases for tax positions taken during prior years 8,757 —

Unrecognized tax benefits as of end of year $ 8,757 $ —

The Company's unrecognized tax benefits primarily relate to the Company's transfer pricing arrangements.

The Company's unrecognized tax benefits, if recognized, would not impact the effective tax rate and income tax provision due to the Company's valuation allowance.

As of March 31, 2023 and 2022, the Company had not accrued interest or penalties related to uncertain income tax positions.

The Company files income tax returns in the U.S., Massachusetts and the U.K.

In the normal course of business, the Company is subject to examination by U.S.

federal, state and foreign jurisdictions, where applicable.

There are currently no pending tax examinations.

The Company is open to future tax examination in the U.S.

under statute from 2019 to the present and in the United Kingdom from 2017 to the present.

Although, with respect to the U.S.

federal jurisdictions, carryforward attributes that were generated prior to 2019 may still be adjusted upon examination if they either have been or will be used in a future period.

As of March 31, 2022 and 2021, income taxes on undistributed earnings of the Company’s subsidiary have not been provided for as the Company planned to indefinitely reinvest these amounts, had the ability to do so, and the cumulative undistributed foreign earnings were in an overall deficit.

During the second quarter of 2021, the Finance Act 2021 (the Act) was enacted in the United Kingdom.

The Act increases the corporate income tax rate from 19% to 25% effective April 1, 2023 and enhances the first-year capital allowance on qualifying new plant and machinery assets effective April 1, 2021.

The effects on the Company’s existing deferred tax balances have been recorded and is offset by the valuation allowance maintained against the Company’s U.K.

net deferred tax assets.

federal and state as well as U.K.

jurisdictions, where applicable.

There are currently no pending income tax examinations.

The Company is open to future U.S.

federal income tax examination from 2020 to the present and in the U.K.

from 2022 to the present.

Although, carryforward attributes may still be adjusted upon examination if they either have been or will be used in a future period.

As of March 31, 2023 and 2022, income taxes on outside basis differences, primarily related to undistributed earnings, of the Company’s subsidiary have not been provided for as the Company intends to indefinitely reinvest its outside basis differences, and the undistributed earnings were in a cumulative and overall deficit.

Geographic information

6 unchanged sentences

$ 7,479 $ 7,933

16 Subsequent Events

Between April 1, 2022 and May 19, 2022, the Company settled transactions that occurred pursuant to the 2020 Sales Agreement, whereby the Company issued and sold an aggregate of 1,686,438 shares of its common stock between April 7, 2022 and April 19, 2022, resulting in gross proceeds of $ 32.0 million, before deducting fees of $ 1.0 million.

Exhibit index

14 unchanged sentences

8-K June 10, 2020 4.1

4.6 Form of Pre-Funded Warrant (2022)

8-K December 12, 2022 4.1

4.7 Form of Indenture to be entered into between the Registrant and a trustee acceptable to the Registrant.

7 unchanged sentences

Employees and forms of agreements thereunder.

10-K May 19, 2022 10.3

10.4† Employee Stock Purchase Plan.

18 unchanged sentences

10-K May 20, 2021 10.13

10.14†* Restricted Stock Unit Grant Agreement, effective as of May 3, 2021, by and between Sushil Patel and the Registrant.

10-K May 20, 2021 10.14

Exhibit Number Exhibit Description Incorporated by Reference

Form Date Number

10.14†* Restricted Stock Unit Grant Agreement, effective as of May 3, 2021, by and between Sushil Patel and the Registrant.

10-K May 20, 2021 10.14

10.15† Separation Agreement and Release, dated as of December 23, 2019, by and between Howard Kaufman and Replimune, Inc.

31 unchanged sentences

Separation Agreement and Release, dated as of August 25, 2021, by and between Andrea Pirzkall and Replimune, Inc., as amended.

10-K May 19, 2022 10.27

10.28 Loan and Security Agreement by and among Replimune Group, Inc., Replimune, Inc., Replimune Limited and Hercules Capital, Inc., dated October 6, 2022.

10-Q November 3, 2022 10.1

10.29† Employment Agreement, dated as of December 1, 2022, by and between Konstantinos Xynos and Replimune, Inc.

10-Q February 9, 2023 10.2

10.30† Amendment to Amended and Restated Employment Agreement, dated as of December 30, 2022, by and between Sushil Patel and Replimune, Inc.

10-Q February 9, 2023 10.3

10.31† Employment Agreement, dated as of December 30, 2022, by and between Christopher Sarchi and Replimune, Inc.

10-Q February 9, 2023 10.4

Exhibit Number Exhibit Description Incorporated by Reference

Form Date Number

Stock Option Grant Agreement, effective as of December 30, 2022, by and between Christopher Sarchi and the Registrant.

Restricted Stock Unit Grant Agreement, effective as of December 30, 2022, by and between Christopher Sarchi and the Registrant.

10.34* Lease Agreement, dated as of March 23 , 2023 , by and among Replimune Limited, MEPC Milton Park No.

1 Limited, and MEPC Milton Park No.

21.1* Subsidiaries of the Registrant.

3 unchanged sentences

32.1** Certification of the Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

Exhibit Number Exhibit Description Incorporated by Reference

Form Date Number

32.2** Certification of the Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

20 unchanged sentences

/s/ PHILIP ASTLEY-SPARKE Chief Executive Officer and Director

(Principal Executive Officer) May 19, 2022

(Principal Executive Officer and Principal Financial Officer) May 18, 2023

Philip Astley-Sparke

/s/ JEAN FRANCHI Chief Financial Officer and Treasurer,

(Principal Financial and Accounting Officer) May 19, 2022

/s/ JEAN FRANCHI Chief Financial Officer May 18, 2023

/s/ ANDREW SCHWENDENMAN Chief Accounting Officer,

(Principal Accounting Officer) May 18, 2023

Andrew Schwendenman

/s/ ROBERT COFFIN

8 unchanged sentences

/s/ PAOLO PUCCI Director May 18, 2023

/s/ JASON RHODES Director May 19, 2022

/s/ JOSEPH SLATTERY Director May 18, 2023

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures