What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-08 compared with 2021-08-13 · 340 added, 278 removed, 547 unchanged (53% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

8 unchanged sentences

Accounts payable

Current portion of long-term debt

Accrued expenses

1 unchanged sentence

Total current liabilities

Lease liability - noncurrent portion

Long-term debt

Lease liability - non-current portion

Total liabilities

4 unchanged sentences

216,145,804 and 214,591,906 shares issued and outstanding at

June 30, 2021 and December 31, 2020, respectively

September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands, except share and per share data)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Collaboration revenue

Operating expenses:

3 unchanged sentences

Loss from operations

Other income (expense):

Interest income (expense), net

Other income (expense), net

Basic and diluted net loss per share

Weighted average common shares outstanding used to compute basic and diluted net loss per share

Weighted average common shares outstanding, basic and diluted

The accompanying notes are an integral part of the unaudited interim financial statements.

1 unchanged sentence

STATEMENTS OF CHANGES IN STOCKHOLDERS’

For the Six Months Ended June 30, 2021 and 2020

(in thousands, except share and per share data)

For the Three Months Ended June 30, 2021

For the Three and Nine Months Ended September 30, 2021 and 2020

(in thousands)

For the Three Months Ended September 30, 2021

Stockholders’

Balance at March 31, 2021

Balance at June 30, 2021

Stock-based compensation

Exercise of employee stock options

Restricted stock awards

Cancelled restricted common stock

Balance at June 30, 2021

The accompanying notes are an integral part of the unaudited interim financial statements.

For the Six Months Ended June 30, 2021

Issuance of warrants

Balance at September 30, 2021

For the Nine Months Ended September 30, 2021

Stockholders’

4 unchanged sentences

Cancelled restricted common stock

Balance at June 30, 2021

Issuance of warrants

Balance at September 30, 2021

The accompanying notes are an integral part of the unaudited interim financial statements.

2 unchanged sentences

EQUITY (continued)

For the Six Months Ended June 30, 2021 and 2020

(in thousands, except share and per share data)

For the Three Months Ended June 30, 2020

For the Three and Nine Months Ended September 30, 2021 and 2020

(in thousands)

For the Three Months Ended September 30, 2020

Stockholders’

Balance at March 31, 2020

Balance at June 30, 2020

Stock-based compensation

Exercise of employee stock options

Balance at June 30, 2020

The accompanying notes are an integral part of the unaudited interim financial statements.

For the Six Months Ended June 30, 2020

Balance at September 30, 2020

For the Nine Months Ended September 30, 2020

Stockholders’

3 unchanged sentences

Issuance of restricted common stock

Cancelled restricted common stock

Issuance of common stock in connection with a public offering, net of commissions and expense of $ 5.9 million

Issuance of common stock in connection with an at the market offering, net of commissions of $ 0.4 million

Balance at June 30, 2020

Balance at September 30, 2020

The accompanying notes are an integral part of the unaudited interim financial statements.

2 unchanged sentences

(in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of financing costs

Stock-based compensation

12 unchanged sentences

Cash flows from financing activities:

Proceeds from long-term debt borrowing

Debt issuance costs

Proceeds from exercise of stock options

2 unchanged sentences

Net cash provided by financing activities

Net increase in cash and cash equivalents, and restricted cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

1 unchanged sentence

Supplementary disclosure of cash flow information:

Accounts included in accrued expenses and accounts payable related

Cash paid for interest

Amounts included in accrued expenses and accounts payable related

to property and equipment

Issuance costs in accounts payable and accrued expenses

Supplementary disclosure of noncash investing and financing activities

Warrants issued in a term loan

The accompanying notes are an integral part of the unaudited interim financial statements.

4 unchanged sentences

is a biopharmaceutical company seeking to develop, acquire, and commercialize, on its own or with partners, a diverse portfolio of immuno-oncology therapies.

The Company is a clinical stage biopharmaceutical company focused on discovering, developing and commercializing next generation immuno-oncology platforms that leverage cell therapies to treat patients with cancers.

The Company is developing technologies that utilize the immune system by employing innovative cell engineering to deliver safe and effective cell therapies for the treatment of multiple cancer types.

Specifically, the Company is focused on developing T-cell receptor, or TCR, T cell therapies to target neoantigens in solid tumors, or TCR-T.

A part of the Company's platform is referred to as “

Sleeping Beauty ”

and is based on the non-viral genetic engineering of immune cells using a transposon/transposase system that is intended to stably engineer T cells outside of the body for subsequent infusion.

The Company’s operations to date have consisted primarily of conducting research and development and raising capital to fund those efforts.

1 unchanged sentence

The Company will continue to seek a partner for this program and have also begun exploring potential synergies between this technology and our cell therapy programs.

Costs incurred during the three and six months ended June 30, 2021 under the program wind down have been immaterial.

The Company’s fiscal year ends on December 31.

Costs incurred during the three and nine months ended September 30, 2021 under the program wind-down have not been material.

The Company has operated at a loss since its inception in 2003 and has no recurring revenues from operations. The Company anticipates that losses will continue for the foreseeable future.

As of June 30, 2021, the Company had approximately $ 76.7  million of cash and cash equivalents.

The Company’s accumulated deficit at June 30, 2021 was approximately $ 808.3  million. Given its current development plans, the Company anticipates cash resources at June 30, 2021, plus the $ 25.0 million gross debt proceeds raised in August 2021, will be sufficient to fund operations into the fourth quarter of 2022. The Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given.

As of September 30, 2021, the Company had approximately $ 91.7  million of cash and cash equivalents.

The Company’s accumulated deficit at September 30, 2021 was approximately $ 831.1  million. Given its current development plans and cash management efforts, the Company anticipates cash resources will be sufficient to fund operations into the second quarter of 2023. The Company’s ability to continue operations after its current cash resources are exhaust ed depends on its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given.

Cash requirements may vary materially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments.

If adequate additional funds are not available when required, or if the Company is unsuccessful in entering into partnership agreements for further development of its product candidates, management may need to curtail its development efforts and planned operations to conserve cash.

The Company’s amended and restated certificate of incorporation authorizes it to issue 3 50,000,000 shares of common stock .

As of July 31, 2021, there were 215,559,148 shares of common stock outstanding and an additional 34,088,731 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants.

The Company’s amende d and restated certificate of incorporation authorizes it to issue 350,000,000 shares of common stock .

As of October 29, 2021, there were 216,145,826 shares of common stock outstanding and an additional 33,778,465 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants.

Basis of Presentation

1 unchanged sentence

Certain information and note disclosures required by generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations.

It is management’s opinion that the accompanying unaudited interim financial statements reflect all adjustments (which are normal and recurring) that are necessary for a fair statement of the results for the interim periods.

The unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 1, 2021, or the Annual Report.

The year-end balance sheet data was derived from the audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States.

The results disclosed in the statements of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year 2021.

The results disclosed in the statements of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year 2021.

Use of Estimates

10 unchanged sentences

The Company continues to evaluate the impact of the COVID-19 global pandemic on patients, healthcare providers and its employees, as well as its operations and the operations of its business partners and healthcare communities.

In response to the COVID-19 pandemic, the Company has implemented policies at its locations to mitigate the risk of exposure to COVID-19 by its personnel, including restrictions on the number of staff in any given research and development laboratory and a work-from-home policy for non-laboratory functions, along with encouraging voluntary vaccination and voluntary sharing of vaccination data.

The extent to which the COVID-19 pandemic impacts the Company’s business, clinical development and regulatory efforts and the value of its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements, and the effectiveness of actions taken globally to contain and treat the disease.

In response to the COVID-19 pandemic, the Company has implemented policies at its locations to mitigate the risk of exposure to COVID-19 by its personnel.

The extent to which the COVID-19 pandemic impacts the Company’s business, clinical development and regulatory efforts and the value of its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements, the result of vaccination efforts and the effectiveness of any other actions taken globally to contain and treat the disease.

The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the COVID-19 pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date on which these financial statements were issued.

Except as disclosed below, the Company did not have any material subsequent events that impacted its financial statements or disclosures.

On August 6, 2021, the Company entered into a credit and security agreement with a lender (the “Term Loan Agreement”).

August 2021 Term Loan

On August 6, 2021, the Company entered into a Loan and Security Agreement with Silicon Valley Bank and affiliates of Silicon Valley Bank (collectively, “SVB”) (the “Term Loan Agreement”).

The Term Loan Agreement provides for an initial term loan of $ 25.0 million funded at the closing, with an additional tranche of $ 25.0 million available if certain funding and clinical milestones are met by August 31, 2022.

Interest on the term loan is payable monthly in arrears at an annual interest rate of the greater of 7.75 % or the prime rate plus a margin of 4.5 %.

The term loan amortization date is April 1, 2022 ;

provided, however, if the Company raises $ 50 M in funding on or prior to March 31, 2022, the term loan first payment date shall automatically be extended to September 1, 2022.

Further, if the Company raised $50M on or prior to March 31, 2022 and an additional $50M on or prior to August 31, 2022, the term loan amortization shall automatically be extended to September 1, 2023 .

The term loan maturity date is March 1, 2023 ;

provided, however, if Company achieves the funding milestones, the term loan maturity date shall automatically be extended to August 1, 2025 .

There is a final payment due of 5.75 %.

The Company granted a warrant at the closing to purchase 432,843 shares at $ 2.22 per share.

The Company will grant a similar warrant if it draws the second $ 25.0 million tranche.

Please refer to Note 4, Debt , for further discussion of the Company's Term Loan Agreement with SVB.

February 2020 Public Offering

On February 5, 2020, the Company entered into an underwriting agreement with Jefferies, as representative of the several underwriters named therein, relating to the issuance and sale of 27,826,086 shares of its common stock.

On February 5, 2020, the Company entered into an underwriting agreement with Jefferies LLC, or Jeffries, as representative of the several underwriters named therein, relating to the issuance and sale of 27,826,086 shares of its common stock.

The price to the public in the offering was $ 3.25 per share, and the underwriters agreed to purchase the shares from the Company pursuant to the underwriting agreement at a purchase price of $ 3.055 per share.

5 unchanged sentences

The net proceeds were approximately $ 3.9 million after deducting underwriting discounts and offering expenses paid by the Company.

At-the-Market Facility

In June 2019, the Company entered into an Open Market Sale Agreement, or sales agreement, with Jefferies LLC, as agent, or Jefferies, pursuant to which the Company may offer and sell, from time to time through Jefferies, shares of its common stock having an aggregate offering price of up to $100.0 million.

At-the-Market (ATM) Facility

In June 2019, the Company entered into an Open Market Sale Agreement, or Sales Agreement, with Jefferies, pursuant to which the Company may offer and sell, from time to time through Jefferies, shares of its common stock having an aggregate offering price of up to $ 100.0 million.

Shares will be sold pursuant to the Company’s effective registration statement on Form S-3ASR (File No.

333-232283), as previously filed with the SEC.

During the six months ended June 3, 2020, the Company sold an aggregate of 2,814,673 shares of its common stock at an average price of $ 4.77 per share under the ATM program.

The net proceeds from sales under the ATM program were approximately $ 13.0 million after deducting underwriting discounts.

During the six months ended June 30, 2021, there were no sales under the Company’s ATM program.

During the nine months ended September 30, 2020, the Company sold an aggregate of 2,814,673 shares of its common stock at an average price of $ 4.77 per share under the Sales Agreement.

The net proceeds from sales were approximately $ 13.0 million after deducting underwriting discounts.

During the nine months ended September 30, 2021, there were no sales under the Sales Agreement.

Summary of Significant Accounting Policies

5 unchanged sentences

ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective for public entities for fiscal years beginning after December 15, 2020, and for interim periods within those fiscal years.

The adoption did not have a material impact on the Company’s financial statements.

T he Company adopted this standard effective January 1, 2021, with no material impact upon adoption .

The carrying values of our debt obligation were as follows:

September 30,

Term Loan Agreement

Unamortized discount on Term Loan Agreement

current portion of long-term debt

Long-term debt

On August 6, 2021, the Company entered into a $ 50.0 million Term Loan Agreement with SVB, with an initial borrowing of $ 25.0 million ("Term A Tranche").

Loans under the Term Loan Agreement are secured by a first lien of substantially all the assets of the Company, other than the Company's intellectual property.

Proceeds from intellectual property are available as security for amounts borrowed.

The Term Loan Agreement requires the Company to meet certain funding and clinical milestones in order to either:

(i) extend the maturity date of the initial loan ("Equity Milestone") or (ii) to utilize the Term Loan Agreement's remaining $ 25.0 million available borrowing capacity (“Term B Tranche”).

Principal repayments for the Term A Tranche will start on April 1, 2022, with a maturity date of March 1, 2023;

however, if an Equity Milestone is achieved on or before March 31, 2022, principal repayments for the Term A Tranche will start on September 1, 2022, with a maturity date of August 1, 2025 .

Upon achievement of certain funding and clinical milestones associated with the Term B Tranche on or before August 31, 2022, the Company may borrow the remaining $ 25.0 million available under the Term Loan Agreement with principal repayments for the Term Loan Agreement starting on September 1, 2023 and a maturity date of August 1, 2025.

Outstanding loans bear interest, payable monthly, at the greater of (a) 7.75 % and (b) the current published U.S.

prime rate, plus a margin of 4.5 %.

As of September 30, 2021, interest on outstanding loans was 7.75 %.

In addition to the payment of the outstanding principal plus accrued interest due, the Company will also owe SVB 5.75 % of the original principal amounts borrowed as a final payment ("Final Payment").

The Final Payment will be accreted over the term of the loan using the effective interest method.

The Company may, at its option, make up to two prepayments, each prepayment consisting of no less than $ 5,000,000 of any outstanding borrowings under the Term Loan Agreement, plus accrued and unpaid interest, subject to a prepayment premium.

In addition to any outstanding principal plus accrued interest selected for prepayment, the Company would also prepay a pro-rata portion of the prepayment premium and the Final Payment associated with the principal amount being repaid.

The Company cannot re-borrow any amounts previously paid.

Should the Company fail to achieve the Equity Milestone on or before December 31, 2021, cash and cash equivalents equal to 50 % of the then outstanding principal plus associated Final Payment must be deposited into an account pledged to SVB as additional cash collateral.

The Term Loan Agreement restricts the Company, apart from conducting its operations in the normal course of business and certain other permitted exceptions, from entering into mergers or acquisitions, incurring additional indebtedness, paying dividends, delisting its stock from the Nasdaq stock exchange or disposing of assets or making changes to its business operations without the consent of SVB.

The Term Loan Agreement also contains standard conditions, as well as insolvency and delisting of the Company’s common stock from Nasdaq, as deemed events of default.

Should the debt become mandatorily repayable upon an event of default, a default interest rate of 3 % above otherwise applicable rates would be due on any balances outstanding.

In connection with the Term Loan Agreement, the Company also issued warrants to SVB providing for the purchase of a total of 432,844 shares of its common stock at an exercise price of $ 2.22 per share.

The warrants are exercisable in whole or in part any time prior to August 6, 2031, and were recorded at their relative fair value amount of $ 0.8 million in additional paid-in capital upon issuance (with an offsetting reduction to the carrying value of outstanding debt).

Should the Company achieve the Term B Milestone and borrow the remaining $ 25.0 million available under the Term Loan Agreement, an additional 432,842 warrants will be issued and recorded at that time to SVB with similar terms to the initial issuance described above.

The Term Loan Agreement issuance costs were approximately $ 1.0 million and primarily related to the warrants issued to SVB, which will be amortized into interest expense over the period to March 1, 2023 .

Interest expense, including the amortization of issuance costs, was $ 0.4 million for the third quarter of 2021.

The fair value of the Term Loan Agreement as of September 30, 2021 approximates its face value due to proximity to the transaction.

Fair Value Measurements

9 unchanged sentences

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities, measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 were as follows:

Assets and liabilities, measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 were as follows:

($ in thousands)

1 unchanged sentence

Balance as of

September 30,

Quoted Prices in

21 unchanged sentences

The Company’s potentially dilutive shares, which include outstanding common stock options, inducement stock options, unvested restricted stock and warrants, have not been included in the computation of diluted net loss per share for any of the periods presented as the result would be anti-dilutive.

Such potentially dilutive shares of common stock consisted of the following as of June 30, 2021 and 2020, respectively:

Such potentially dilutive shares of common stock consisted of the following as of September 30, 2021 and 2020, respectively:

September 30,

Stock options

3 unchanged sentences

Collaborations with Precigen/ PGEN

During the year ended December 31, 2018, the Company and PGEN Therapeutics, Inc.

or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation, entered into an Exclusive License Agreement (Note 7).

During the year ended December 31, 2018, the Company and PGEN Therapeutics, Inc., or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation, entered into an Exclusive License Agreement (Note 8).

Collaboration with PGEN and MD Anderson

On January 13, 2015, the Company, together with Precigen, entered into the MD Anderson License with MD Anderson (which Precigen subsequently assigned to PGEN).

On January 13, 2015, the Company, together with Precigen, entered into a License with the MD Anderson Cancer Center, or MD Anderson, (which Precigen subsequently assigned to PGEN).

Pursuant to the MD Anderson License, the Company, together with PGEN, hold an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson, including technologies relating to novel CAR T-cell therapies, non-viral gene transfer systems, genetic modification and/or propagation of immune cells and other cellular therapy approaches, Natural Killer, or NK Cells, and TCRs, arising from the laboratory of Laurence Cooper, M.D., Ph.D., who served as the Company’s Chief Executive Officer from May 2015 to February 2021 and was formerly a tenured professor of pediatrics at MD Anderson.

In partial consideration for entering into the MD Anderson License, the Company issued MD Anderson an aggregate of 11,722,163 shares of common stock for which the Company incurred a $ 67.3 million charge recorded in 2015.

During the six months ended June 30, 2021 and 2020, the Company did not make any payments to MD Anderson.

During the nine months ended September 30, 2021 and 2020, the Company did not make any payments to MD Anderson.

The total aggregate payments made in connection with this agreement have been $ 41.9  million since inception.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs is $ 1.8  million, which is included in prepaid expenses and other current assets.

The classification is based on management’s current estimate of plans to utilize the prepaid balance and is subject to revision on a quarterly basis.

At June 30, 2021 and December 31, 2020, the Company had accounts receivable due from MD Anderson of $ 7.6 million and $ 4.7 million, respectively.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs was zero at September 30, 2021 as the outstanding balance has been fully utilized.

At September 30, 2021 and December 31, 2020, the Company had accounts receivable due from MD Anderson of $ 1.1 million and $ 4.7 million, respectively.

Additionally, the Company recorded approximately $ 2.1 million and $ 1.4 million of accrued expenses due to MD Anderson for research and other activities at September 30, 2021 and December 31, 2020, respectively.

Collaboration with Vineti Inc.

On July 9, 2020, the Company entered into a master service agreement and statement of work with Vineti, Inc., or Vineti.

Pursuant to the agreements, Vineti is developing a software platform to coordinate and orchestrate the order, cell collection and manufacturing process for the Company’s TCR-T clinical programs.

Heidi Hagen, who became a director of the Company in June 2019 and the Interim Chief Executive Officer on February 25, 2021, is a co-founder and former officer, of Vineti.

During the three and six months ended June 30, 2021, the Company recorded expenses of approximately $ 0.1 million and $ 0.3 million for services performed by Vineti, respectively.

Pursuant to the agreements, Vineti is developing a software platform to coordinate and orchestrate the order, cell collection and manufacturing

process for the Company’s TCR-T clinical programs.

Heidi Hagen, who previously served as a member of our Board of Directors and served as Interim Chief Executive Officer of the Company from February 2021 through August 2021 , is a co-founder and former officer, of Vineti.

During the three and nine months ended September 30, 2021, the Company recorded expenses of approximately $ 0.1 million and $ 0.4 million for services performed by Vineti, respectively.

Joint Venture with TriArm Therapeutics/Eden Biocell

On December 18, 2018, the Company entered into a Framework Agreement with TriArm Therapeutics, Ltd., or TriArm, pursuant to which the parties agreed to launch Eden BioCell, Ltd., or Eden BioCell, to lead clinical development and commercialization of certain

Sleeping Beauty- generated CAR-T therapies as set forth in a separate license agreement.

Eden BioCell is a joint venture in the People’s Republic of China (including Macau and Hong Kong), Taiwan and Korea.

Eden BioCell is a joint venture in the People’s Republic of China (including Macau and Hong Kong), Taiwan and Korea, or collectively, Greater China.

The Company licensed to Eden BioCell the rights in Greater China for its third-generation Sleeping Beauty-generated CAR-T therapies targeting the CD19 antigen.

4 unchanged sentences

Huang also serves as a member of Eden BioCell’s Board of Directors.

For the six months ended June 30, 2021 and 2020, Eden Biocell incurred a net loss and the Company continues to have no commitment to fund its operations.

For the three and nine months ended September 30, 2021 and 2020, Eden Biocell incurred a net loss and the Company continues to have no commitment to fund its operations.

In September 2021, TriArm and Ziopharm mutually agreed to dissolve the joint venture.

Commitments and Contingencies

12 unchanged sentences

In consideration of the licenses and other rights granted by PGEN, the Company pays PGEN an annual license fee of $ 0.1 million.

The Company did no t have any annual license expenses for the three and six months ended June 30, 2021 and 2020.

The Company did no t have any annual license payments for the three and nine months ended September 30, 2021 and 2020.

The Company will also make milestone payments totaling up to an additional $ 52.5 million for each exclusively licensed program upon the initiation of later stage clinical trials and upon the approval of exclusively licensed products in various jurisdictions.

In addition, the Company will pay PGEN tiered royalties ranging from low-single digit to high-single digit on the net sales derived from the sales of any approved IL-12 Products and CAR Products.

In addition, the Company will pay PGEN tiered royalties ranging from low-single digits to high-single digits on the net sales derived

from the sales of any approved IL-12 Products and CAR Products.

The Company will also pay PGEN royalties ranging from low-single digit to mid-single digit on the net sales derived from the sales of any approved TCR Products, up to a maximum royalty amount of $ 100.0 million in the aggregate.

1 unchanged sentence

PGEN will pay the Company royalties ranging from low-single digits to mid-single digits on the net sales derived from the sale of PGEN’s CAR products, up to $ 50.0 million.

During the three months ended June 30, 2021 and June 30, 2020 there were no expenses for services performed by PGEN.

During the six months ended June 30, 2021 there were $ 0.1 million of expenses for services performed by PGEN and no expenses incurred

during the six months ended June 30, 2020.

As of June 30, 2021, the Company did not have any outstanding liabilities related to services performed by PGEN.

During the three and nine months ended September 30, 2021, there were zero and $ 0.1 million, respectively, of expenses for services performed by PGEN.

During the three and nine months ended September 30, 2020, there were no expenses for services performed by PGEN.

As of September 30, 2021, the Company did not have any outstanding liabilities related to services performed by PGEN.

As of December 31, 2020, the Company had $ 0.1 million in accrued expenses related to services for amounts due to PGEN.

4 unchanged sentences

Cooper was stepping down from his role as Chief Executive Officer and as a member of the Board of Directors, but will be remaining with the Company in a scientific advisory consulting role to support the Company's operations.

Under the of a Separation Agreement, in exchange for a release of claims and certain post-employment covenants and in lieu of any severance benefits under his employment agreement, Dr.

Cooper is entitled to receive continuing payments of his base salary and COBRA premiums for a period of 18 months, a cash payment $ 143,250 , representing a pro-rata target amount of his annual performance bonus for 2021, a fully-vested restricted stock award with a grant value of $ 917,000 , equivalent to the 2020 annual bonus Dr.

Cooper would have been entitled to had his employment not terminated, and certain limited reimbursements for legal fees and housing.

Cooper is not entitled to any equity acceleration in connection with his separation, however his equity awards are eligible to continue to vest pursuant to their terms based on his consulting services to the Company .Additionally, under Dr.

Cooper's consulting agreement, he may earn consulting fees in amounts of up to $ 0.6 million for the first year and $ 0.3 million for each of the following two years and is also eligible for reimbursement of reasonable out-of-pocket business expenses.

The term of the MD Anderson License expires on the later of (a) the expiration of all patents licensed thereunder, or (b) the twentieth anniversary of the date of the MD Anderson License;

1 unchanged sentence

After ten years from the date of the MD Anderson License and subject to a 90-day cure period, MD Anderson will have the right to convert the MD Anderson License into a non-exclusive license if Ziopharm and PGEN are not using commercially reasonable efforts to commercialize the licensed intellectual property on a case-by-case basis.

After five years from the date of the MD Anderson License and subject to a 180-day cure period, MD Anderson will had the right to terminate the MD Anderson License with respect to specific technology(ies) funded by the government or subject to a third-party contract if the Company and PGEN did not meet the diligence requirements in such funding agreement or contract, as applicable.

After five years from the date of the MD Anderson License and subject to a 180-day cure period, MD Anderson had the right to terminate the MD Anderson License with respect to specific technology(ies) funded by the government or subject to a third-party contract if the Company and PGEN did not meet the diligence requirements in such funding agreement or contract, as applicable.

MD Anderson may also terminate the agreement with written notice upon material breach by us and PGEN, if such breach has not been cured within 60 days of receiving such notice.

5 unchanged sentences

On October 22, 2019, the Company entered into an amendment to the Research and Development Agreement extending its term until December 31, 2026.

During the three and six months ended June 30, 2021 and 2020, the Company made no payments to MD Anderson.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs is $ 1.8 million, which is included in prepaid expenses and other current assets on the Company’s balance sheet at June 30, 2021.

There were also accounts receivable of $ 7.6 and $ 4.7 million due from MD Anderson at June 30, 2021 and December 31, 2020, respectively.

program, which uses non-viral gene transfer to stably express and clinically evaluate neoantigen-specific TCRs in T cells.

During the three and nine months ended September 30, 2021 and 2020, the Company made no payments to MD Anderson.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs was zero at September 30, 2021 as the outstanding balance has been fully utilized.

At September 30, 2021 and December 31, 2020, the Company had accounts receivable due from MD Anderson of $ 1.1 million and $ 4.7 million, respectively.

On October 22, 2019, the Company entered into the 2019 Research and Development Agreement, or the 2019 Agreement, with MD Anderson, pursuant to which the parties agreed to collaborate with respect to the Company’s Sleeping Beauty immunotherapy program, which uses non-viral gene transfer to stably express and clinically evaluate neoantigen-specific TCRs in T cells.

Under the 2019 Agreement, the parties will, among other things, collaborate on programs to expand the Company’s TCR library and conduct clinical trials.

7 unchanged sentences

The Company also agreed that it will sell the Company’s TCR products to MD Anderson at preferential prices and will sell its TCR products in Texas exclusively to MD Anderson for a limited period of time following the first commercial sale of the Company’s TCR products.

No costs have been incurred under this agreement as of June 30, 2021.

In connection with the execution of the 2019 Agreement, the Company issued MD Anderson a warrant to purchase 3,333,333 shares of common stock.

No costs have been incurred or paid under this agreement as of September 30, 2021.

In connection with the execution of the 2019 Agreement, the Company issued MD Anderson warrants to purchase 3,333,333 shares of common stock.

Refer to Note 11 –

9 unchanged sentences

The first minimum annual royalty payment is payable on the date that is eighteen months following the date of the Patent License .

This payment was expensed during the first quarter of 2021.

This payment of $ 0.1 million was expensed during the first quarter of 2021.

On September 28, 2020, the Company entered into a second amendment to the patent license agreement which expanded the TCR library to include additional TCRs.

1 unchanged sentence

On May 4, 2021, the Company entered into a fourth amendment to the patent license agreement which expanded the TCR library to include additional TCRs.

On August 13, 2021, the Company entered into a fifth amendment to the patent licensing agreement which expanded the TCR library to include an additional TCR.

The Company is also required to make performance-based payments upon successful completion of clinical and regulatory benchmarks relating to the licensed products.

The aggregate potential benchmark payments are $ 4.3 million, of which aggregate payments of $ 3.0 million are due only after marketing approval in the United States or in Europe, Japan, Australia, China or India.

The first benchmark payment of $0.1 million will be due upon the initiation of the Company’s first sponsored Phase 1 clinical trial of a licensed product or licensed process in the field of use licensed under the Patent License, which has not been met at June 30, 2021.

The first benchmark payment of $ 0.1 million will be due upon the initiation of the Company’s first sponsored Phase 1 clinical trial of

a licensed product or licensed process in the field of use licensed under the Patent License, which has not been met at September 30, 2021.

In addition, the Company is required to pay the NCI one-time benchmark payments following aggregate net sales of licensed products at certain net sales up to $ 1.0 billion.

8 unchanged sentences

(i) require the Company to sublicense the rights to the product candidates covered by the Patent License upon certain conditions, including if the Company is not reasonably satisfying required health and safety needs and (ii) terminate or modify the Patent License, including if the Company is not satisfying requirements for public use as specified by federal regulations.

During the three and six month periods ended June 30, 2021, the Company expensed $ 0.1 million and $ 0.3 million related to the patent services under this agreement.

The Company did not incur expenses related to patent services during the three and six month periods ended June 30, 2020.

Additionally, the Company recorded $ 0.3 million in accrued expenses as of June 30, 2021 related to patent services.

During the three and nine month periods ended September 30, 2021, the Company expensed $ 0.3 million and $ 0.5 million related to patent prosecution services under this agreement.

The Company did no t incur expenses related to patent services during the three and nine month periods ended September 30, 2020.

Additionally, the Company recorded $ 0.3 million in accrued expenses as of September 30, 2021 related to patent prosecution services.

Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute

4 unchanged sentences

In February 2019, the Company extended the CRADA with the NCI for two years, committing an additional $ 5.0 million to this program.

The Company recorded $ 1.3 million of expense for both six-month periods ended June 30, 2021 and 2020 and $0.6 million of expenses for both three-month periods ended June 30, 2021 and 2020 respectively.

The Company recorded $ 1.3 million of expense for both nine month periods ended September 30, 2021 and 2020, and for the three month period ended September 30, 2021 and 2020, the Company recorded expense of zero and $ 0.6 million, respectively.

Patent and Technology License Agreement—The University of Texas MD Anderson Cancer Center and the Texas A&M University System

4 unchanged sentences

Under the terms of the agreement, the Company may be required to make additional payments to the Licensors upon achievement of certain other milestones in varying amounts which, on a cumulative basis could total up to an additional $ 4.5 million.

In addition, the Licensors are entitled to receive single digit percentage royalty payments on sales from a licensed product and will also be entitled to receive a portion of any fees that the Company may receive from a possible sublicense under certain circumstances.

No amounts were accrued or paid during the three or six months ended June 30, 2021 and 2020.

During the three and nine months ended September 30, 2021 the Company accrued $ 80,000 of fees under the terms of the license agreement.

No amounts were accrued or paid during the three or nine months ended September 30, 2020.

Collaboration Agreement with Solasia Pharma K.K.

3 unchanged sentences

Solasia will be responsible for all costs related to the development, manufacturing and commercialization of darinaparsin.

The Company’s Licensors, as defined in the agreement, will receive a portion of all milestone and royalty payments made by Solasia to the Company in

accordance with the terms of the license agreement with the Licensors.

No amounts were received during the three or six months ended June 30, 2021 and 2020.

The Company’s Licensors, as defined in the agreement, will receive a portion of all milestone and royalty payments made by Solasia to the Company in accordance with the terms of the license agreement with the Licensors.

During the three and nine months ended September 30, 2021, the Company recorded $ 0.4 million of collaboration revenue under the collaboration agreement with Solasia in accordance with variable consideration guidance within ASC Topic 606, Revenue from Contracts with Customers .

No amounts were recorded or received during the three or nine months ended September 30, 2020.

Collaboration with KBI

5 unchanged sentences

In June 2012, the Company entered into a master lease for the Company’s corporate office headquarters in Boston, Massachusetts, which was originally set to expire in August 2016 , but renewed through August 31, 2021 .

As of June 30, 2021 and December 31, 2020, a total security deposit of $ 0.1 million is included in deposits on the Company’s balance sheet.

As of September 30, 2021 and December 31, 2020, a total security depos it of $ 0.1 millio n is included in deposits on the Company’s balance sheet.

On April 22, 2021, the Company extended its lease for a 9,800 square foot portion of its office space in Boston.

The renewal for its office space was originally set to expire on August 31, 2021 , but has now been extended through August 2026.

Under the terms of the renewal, the Company is required to make rental payments of approximately $ 26,000 per month.

On January 30, 2018, the Company entered into a lease agreement for office space in Houston, Texas, at MD Anderson.

Under the terms of the Houston lease agreement, the Company leased approximately 210 square feet and were required to make rental payments at an average monthly rate of approximately $ 1 thousand.

Under the terms of the Houston lease agreement, the Company leased approximately 210 square feet and were required to make rental payments at an average monthly rate of approximately $ 1,000 .

This lease was terminated effective March 31, 2020.

On January 30, 2018, the Company entered into a lease agreement, or the First Houston Lease, for office space in Houston, Texas at MD Anderson through April 2021.

On March 12, 2019, the Company entered into a lease agreement, or the Second Houston Lease, for additional office space in Houston through April 2021.

Under the terms of the First Houston Lease agreement, the Company leases approximately 1,038 square feet and is required to make rental payments at an average monthly rate of approximately $ 2 thousand through April 2021.

Under the terms of the Second Houston Lease, the Company leases from MD Anderson, approximately 8,443 square feet and is initially required to make rental payments of approximately $ 17 thousand per month through February 2027, subject to an annual base rent increase of approximately 3.0 % throughout the term.

On March 12, 2019, the Company entered into a lease agreement, or the First Houston Lease, for office and lab space in Houston, Texas at MD Anderson through April 2021.

Under the terms of the First Houston Lease agreement, the Company leased approximately 1,038 square feet and was required to make rental payments at an average monthly rate of approximately $ 2,000 through April 2021.

On October 15, 2019, the Company entered into a lease agreement, or the Second Houston Lease, for additional office space in Houston through February 2027.

Under the terms of the Second Houston Lease, the Company leases from MD Anderson, approximately 8,443 square feet and is initially required to make rental payments of approximately $ 17,000 per month through February 2027, subject to an annual base rent increase of approximately 3.0 % throughout the term.

Effective April 13, 2020, the Company leased an additional 5,584 square feet from MD Anderson.

The Company is initially required to make rental payments of approximately $ 12 thousand per month through February 2027, subject to an annual base rent increase of approximately 3.0 % throughout the term.

All future rent expense incurred in Houston, will be deducted from the Company’s prepayments to MD Anderson.

The Company is initially required to make rental payments of approximately $ 12,000 per month through February 2027, subject to an annual base rent increase of approximately 3.0 % throughout the term.

Effective December 15, 2020, the Company leased an additional 35,482 square feet from MD Anderson.

The Company is initially required to make rental payments of approximately $ 37 thousand per month through April 2028, subject to an annual base rent increase of approximately 3.0 % throughout the term beginning in April 2023.

Future rent expense incurred in Houston, will be deducted from the Company’s prepayments to MD Anderson.

On April 22, 2021, the Company extended its lease for a 9,800 square foot portion of its corporate office headquarters in Boston.

The renewal for its corporate office headquarters was originally set to expire on August 31, 2021, but has now been extended through August 2026.

Under the terms of the renewal, the Company is required to make rental payments of approximately $ 26 thousand per month.

The Company is initially required to make rental payments of approximately $ 37,000 per month through April 2028, subject to an annual base rent increase of approximately 3.0 % throughout the term beginning in April 2023.

The components of lease expense were as follows:

Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

(in thousands)

3 unchanged sentences

Weighted-average discount rate

Effective June 1, 2020, the Company entered into a noncancelable lease for a period of less than a year with monthly payments of approximately $ 10 thousand that is not subject to right of use asset recognition under ASC 842.

Effective September 1, 2020, the Company added additional space to the noncancelable lease for a period of less than a year with monthly payments now totaling

approximately $ 15 thousand.

Rent expense during the three and six months ended June 30, 2021 was $ 5 thousand.

As of June 30, 2021, this lease has been terminated and the Company has no further obligation.

As of June 30, 2021, the maturities of the Company’s operating lease liabilities for the years ended December 31, were as follows (in thousands):

2021 (excluding the six months ended June 30, 2021)

Effective June 1, 2020, the Company entered into a noncancelable lease for a period of less than a year with monthly payments of approximately $ 10,000 that is not subject to right of use asset recognition under ASC 842.

Effective September 1, 2020, the Company added additional space to the noncancelable lease for a period of less than a year with monthly payments now totaling approximately $ 15,000 .

Rent expense was zero and $ 5,000 during the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, this lease has been terminated and the Company has no further obligation.

As of September 30, 2021, the future minimum lease payments of the Company’s operating lease obligations for the years ended December 31, were as follows (in thousands):

2021 (excluding the nine months ended September 30, 2021)

Total lease payments

3 unchanged sentences

The Company recognized stock-based compensation expense on all employee and non-employee awards as follows:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(in thousands)

2 unchanged sentences

Stock-based compensation expense

The Company granted an aggregate of 41,500 and 4,395,438 stock options during the three and six months ended June 30, 2021 with a weighted-average grant date fair value of $ 2.27 and $ 2.44 per share, respectively.

The Company granted an aggregate of 153,000 and 1,049,000 stock options during the three and six months ended June 30, 2020 with a weighted-average grant date fair value of $ 1.99 and $ 2.55 per share, respectively.

The Company granted an aggregate of 2,755,000 and 7,150,438 stock options during the three and nine months ended September 30, 2021, with a weighted-average grant date fair value of $ 1.08 and $ 1.91 per share, respectively.

The Company granted an aggregate of 203,178 and 1,252,178 stock options during the three and nine months ended September 30, 2020, with a weighted-average grant date fair value of $ 1.96 and $ 2.45 per share, respectively.

On March 4, 2021, the Company extended the contractual life of 216,700 fully vested stock options held by a former director of the Company.

2 unchanged sentences

On May 17, 2021, the Company extended the contractual life of 347,267 vested stock options held by a former officer of the Company.

These extensions resulted in additional stock compensation expense of approximately $ 1.9 million and $ 2.0 million during the three and six months ended June 30, 2021, respectively.

For the three months ended June 30, 2021 and 2020, the fair value of stock options was estimated on the date of grant using a Black-Scholes option valuation model with the following assumptions:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

These extensions resulted in additional stock compensation expense of approximately $ 2.0 million during the nine months ended September 30, 2021.

For the three and nine months ended September 30, 2021 and 2020, the fair value of stock options was estimated on the date of grant using a Black-Scholes option valuation model with the following assumptions:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Risk-free interest rate

2 unchanged sentences

0.50 - 1.15 %

0.36 - 1.68 %

Expected life in years

3 unchanged sentences

72.53 - 74.80 %

71.11 - 74.18 %

Expected dividend yield

At June 30, 2021, there were 463,333 stock options that had been issued outside the 2012 Equity Incentive Plan, or the 2012 Plan and the 2020 Equity Incentive Plan, or the 2020 Plan.

At September 30, 2021, there were 97,500 stock options that had been issued outside the 2012 Equity Incentive Plan, or the 2012 Plan and the 2020 Equity Incentive Plan, or the 2020 Plan.

These options are excluded from the schedule below.

Stock option activity under the Company’s stock option plans for the three months ended June 30, 2021 is as follows:

Stock option activity under the Company’s stock option plans for the nine months ended September 30, 2021 is as follows:

(in thousands, except share and per share data)

1 unchanged sentence

Outstanding, December 31, 2020

Outstanding, June 30, 2021

Options exercisable, June 30, 2021

Outstanding, September 30, 2021

Options exercisable, September 30, 2021

Options exercisable, December 31, 2020

Options available for future grant

At June 30, 2021, total unrecognized compensation costs related to unvested stock options outstanding amounted to $ 11.3 million.

At September 30, 2021, total unrecognized compensation costs related to unvested stock options outstanding amounted to $ 8.0 million.

The cost is expected to be recognized over a weighted-average period of 2.03 years.

A summary of the status of unvested restricted stock for the three months ended June 30, 2021 is as follows:

A summary of the status of unvested restricted stock for the nine months ended September 30, 2021 is as follows:

Number of Shares

2 unchanged sentences

Unvested, December 31, 2020

Unvested, June 30, 2021

At June 30, 2021, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $ 2.2 million.

Unvested, September 30, 2021

At September 30, 2021, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $ 2.4 million.

The cost is expected to be recognized over a weighted-average period of 2.19 years.

2 unchanged sentences

Our ability to utilize the total shares authorized under the 2020 Plan will be limited by the total number of shares authorized in our certificate of incorporation.

As a result, as of June 30, 2021, there are 1,427,152 shares available to grant from the 2020 Plan.

No additional awards can be granted from the 2012 Plan or the Company’s 2003 Stock Option Plan.

As a result, as of September 30, 2021, there are 2,224,159 shares available to grant from the 2020 Plan.

Additionally, 2,625,000 stock options with an exercise price of $ 1.64 were granted on August 30, 2021 to the Company's Chief Executive Officer, as part of his compensation package.

These options are subject to a vesting schedule.

No ne of these options have vested and do not currently impact the shares available to grant from the 2020 Plan.

No additional awards can be granted from the 2012 Plan or the Company's 2003 Stock Option Plan.

In connection with the Company’s November 2018 private placement which provided net proceeds of approximately $ 47.1 million, the Company issued warrants to purchase an aggregate of 18,939,394 shares of common stock, or the 2018 warrants, which became exercisable six months after the closing of the private placement.

10 unchanged sentences

The Company issued participating investors new warrants to purchase up to 17,803,031 additional shares of common stock, or the 2019 warrants, as an inducement for the warrant holders to exercise their 2018 warrants.

The 2019 warrants will expire on the fifth

anniversary of the initial exercise date and have an exercise price of $ 7.00 .

The 2019 warrants will expire on the fifth anniversary of the initial exercise date and have an exercise price of $ 7.00 .

The 2019 warrants were valued using a Black-Scholes valuation model and resulted in a $ 60.8 million non-cash charge to the Company’s statement of operations in 2019.

6 unchanged sentences

The Company will recognize expense on the warrant in the same manner as if the Company paid cash for services to be rendered.

The Company has not recognized any expense related to the warrant as of June 30, 2021, as no work towards any of the specified clinical milestones has begun.

The Company has not recognized any expense related to the warrant as of September 30, 2021, as no work towards any of the specified clinical milestones has begun.

On August 6, 2021, the Company entered into a Loan and Security Agreement with Silicon Valley Bank and affiliates, collectively, SVB.

Refer to Note 4 - Debt .

In connection with the Loan and Security Agreement, the Company issued SVB warrants to purchase 432,844 shares of common stock with an exercise price of $ 2.22 per share.

The warrants have a ten year life and are fully vested upon issuance.

The fair value of the warrants was estim ated at $ 0.8 million using a Black-Scholes model with the following assumptions:

expected volatility of 79 %, risk free interest rate of 1.31 %, expected life of ten year s and no dividends.

Restructuring

On September 27, 2021, in order to lower its existing cost structure in connection with the realignment of its business strategy, the Company announced a strategic reduction in force and notified approximately 60 full-time employees of its intention to terminate their services on or, in most cases, before November 30, 2021.

Certain of the notified employees had employment agreements that provided for enhanced severance benefits.

The severance benefits, apart from certain continuing company-paid health care benefits for up to twelve months, will be paid during the fourth quarter of 2021.

T he Company expensed the following costs associated with these future termination benefit payments resulting from the strategic reduction in force:

September 30,

Research and Development

General and Administrative

Total Severance Expense

Amounts remaining to be expensed after September 30, 2021, for a limited number of employees continuing to render service through November 30, 2021, are di minimis.

At September 30, 2021, the accrued liability balance associated with the strategic reduction in force announced in the third quarter of 2021 is $ 3.5 million and is expected to be paid in the fourth quarter of 2021.

Joint Venture

7 unchanged sentences

Eden BioCell will be responsible for certain milestone and royalty payments related to the Company’s license agreements with MD Anderson and PGEN (see Note 8).

TriArm entered into a master services agreement with Eden BioCell and contributed $ 10.0 million of cash on the closing date.

TriArm entered into a master services agreement with Eden BioCell and contributed

$ 10.0 million of cash on the closing date.

TriArm and the Company each received a 50 % equity interest in the joint venture in exchange for their contributions to Eden BioCell.

4 unchanged sentences

Due to the de minimis fair value of the intellectual property contributed, the Company did not record a gain or loss on this transaction and recognized no value for its equity-method investment.

In March 2021 and as announced by the Company in April 2021, Eden BioCell, the Company’s Joint Venture in Taiwan with Tri-Arm Therapeutics, began treating patients in a clinical trial with the Company’s investigational CD19 RPM CAR-T cell therapy, under the IND cleared by the Taiwan FDA in December.

In March 2021 and as announced by the Company in April 2021, Eden BioCell, the Company’s Joint Venture in Taiwan with TriArm Therapeutics, began treating patients in a clinical trial with the Company’s investigational CD19 RPM CAR-T cell therapy, under the IND cleared by the Taiwan FDA in December.

Two patients have now been treated in this trial.

2 unchanged sentences

Patients were infused two days after gene transfer, thus shortening the turnaround time and demonstrating an advantage over viral methods.

Based on laboratory data from the first two patients generated between March and May 2021, the Tri-Arm/Eden team concluded, in concert with the investigator and the team at Ziopharm, that further process development work is required.

This additional work will optimize and refine the manufacturing process in order to more consistently manufacture product in the desired clinical dose range seeking to be studied.

The Tri-Arm/Eden team, per the terms of the JV agreement, will undertake the necessary process development work before infusing additional patients.

This will take an unspecified amount of time.

Additionally, the ongoing COVID outbreak in Taiwan presents additional uncertainty to the timeline, as the operational activities in the manufacturing suite are currently slowed due to employee restrictions related to the pandemic.

These restrictions are impacting clinical trials broadly in Taiwan.

For the three and six months ended June 30, 2021 and 2020, Eden BioCell incurred a net loss and the Company continues to have no commitment to fund its operations.

Based on laboratory data from the first two patients generated between March and May 2021, the TriArm/Eden team concluded, in concert with the investigator and the team at Ziopharm, that further process development work is required.

In September 2021, TriArm and Ziopharm mutually agreed to dissolve the joint venture.

For the three and nine months ended September 30, 2021 and 2020, Eden BioCell incurred a net loss.

The Company continues to have no commitment to fund its operations.

Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date on which these financial statements were issued.

The Company did not have any material subsequent events that impacted its financial statements or disclosures.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16 unchanged sentences

We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

We are a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing next generation immuno-oncology platforms that leverage cell- and gene-based therapies to treat patients with cancer.

We are developing platform technologies that utilize the immune system by employing innovative cell engineering and novel, controlled gene expression technologies designed to deliver safe and effective cell and gene therapies for the treatment of multiple cancer types.

Our major platform and priority is referred to as Sleeping Beauty and is based on the non-viral genetic engineering of immune cells using a transposon/transposase system that is intended to stably engineer T cells outside of the body for subsequent infusion.

Our second platform is referred to as Controlled IL-12 and is designed to stimulate expression of interleukin 12, or IL-12, a master regulator of the immune system, in a controlled manner to focus the patient’s immune system to more effectively attack cancer cells.

Using our Sleeping Beauty platform, we are developing T cell receptor, or TCR, T cell therapies to target neoantigens in solid tumors using two approaches, which we refer to as our “Library TCR-T Approach”

and our “Personalized TCR-T Approach.”

The Library TCR-T Approach uses TCRs identified from third parties that have been prepared before the patient-recipient has been identified (i.e., as off-the-shelf inventory plasmids).

We then genetically modify the recipient’s own T cells to redirect specificity to public, or shared, neoantigens.

The Personalized TCR-T Approach uses recipient-derived (autologous) TCRs to genetically modify the recipient’s own T cells to redirect specificity to the recipient’s private neoantigens.

We are a clinical stage biopharmaceutical company focused on discovering, developing and commercializing next generation immuno-oncology platforms that leverage cell therapies to treat patients with cancers.

We are developing technologies that utilize the immune system by employing innovative cell engineering to deliver safe and effective cell therapies for the treatment of multiple cancer types.

Specifically, we are focused on developing T-cell receptor, or TCR, T cell therapies to target neoantigens in solid tumors, or TCR-T.

A part of our platform is referred to as “

Sleeping Beauty ”

and is based on the non-viral genetic engineering of immune cells using a transposon/transposase system that is intended to stably engineer T cells outside of the body for subsequent infusion.

We have identified specific hotspot mutations and have correspondingly prepared TCRs which, when engineered to the T cells of the patient, will redirect these T cells to target these shared neoantigen hotspots in solid tumors.

These distinct TCRs, which we refer to as our “Library TCR-T Approach”, have been prepared before the patient-recipient has been identified.

We then screen potential patients for the hotspot mutations for which we have corresponding TCRs, and when we find a match, we will genetically modify the recipient’s own T cells to redirect specificity to shared neoantigens.

In our company-sponsored Phase 1 clinical trial, we will evaluate TCRs from our library for the investigational treatment of lung, cholangiocarcinoma, pancreatic, colorectal and gynecological cancers.

Initially, six curated TCRs reactive to mutated KRAS and TP53 will be included in the clinical trial;

however, we expect to expand the number of TCRs to be evaluated in this clinical trial.

This clinical trial is being conducted in collaboration with The University of Texas MD Anderson Cancer Center, or MD Anderson, which will be the first site for the clinical trial.

Under our Cooperative Research and Development Agreement, the National Cancer Institute, or NCI, is conducting a Phase 2 Personalized TCR-T clinical trial to evaluate autologous peripheral blood lymphocytes genetically modified with the Sleeping Beauty system to express private neoantigen-specific TCRs.

Initially, six curated TCRs reactive to mutated KRAS and TP53 were included in the clinical trial.

The clinical trial design, however, allows for and we expect to expand the number of TCRs to be evaluated in this trial.

This clinical trial is being conducted in collaboration with The University of Texas MD Anderson Cancer Center, or MD Anderson, which will serve as the first site for the clinical trial.

Other clinical trial sites may be added at a later time.

Food and Drug Administration, or the FDA, has cleared the investigational new drug, or IND, application we have submitted for this clinical trial.

Enrollment in this clinical trial has not yet begun.

We anticipate treating the first patient under this trial during the first half of 2022.

Under our Cooperative Research and Development Agreement, the NCI, is conducting a Phase 2 Personalized TCR-T clinical trial to evaluate autologous peripheral blood lymphocytes genetically modified with the Sleeping Beauty system to express autologous neoantigen-specific TCRs.

The trial is designed to enroll patients with a broad range of solid tumors.

Food and Drug Administration, or the FDA, has cleared the investigational new drug, or IND, application submitted by the NCI for this clinical trial.

However, enrollment in this clinical trial has been temporarily suspended due to issues internal to the NCI and unrelated to our technology.

The progress and timeline for this trial, including the timeline for dosing patients, are under the control of the NCI.

We are developing chimeric antigen receptor, or CAR, T cell, or CAR+ T, therapies targeting CD19 on malignant B cells using our Sleeping Beauty platform.

We are advancing our rapid personalized manufacture, or RPM, technology in Greater China with Eden BioCell, Ltd., or Eden BioCell, our joint venture with TriArm Therapeutics, Ltd.

RPM enables small numbers of T cells to be infused as soon as the day after gene transfer which is made possible by the genetic modification of resting T cells to express CAR and membrane bound IL-15, or mbIL15.

Eden BioCell is conducting a Phase 1 clinical trial in Taiwan to evaluate the safety and efficacy of Sleeping Beauty-generated CD19-specific RPM CAR+ T therapies using patient-derived (autologous) T cells in order to treat patients with relapsed or refractory CD19 + leukemias and lymphomas.

Our Controlled IL-12 platform is based on an engineered replication-incompetent adenovirus, referred to as Ad-RTS-hIL-12, plus veledimex as a gene delivery system to conditionally produce IL-12, a potent, naturally occurring anti-cancer protein, to treat patients with solid tumors.

Our Controlled IL-12 platform allows us to deliver IL-12 in a tunable dose as the cytokine is under transcriptional control of the RheoSwitch Therapeutic System ® (RTS ® ).

However, enrollment in this clinical trial has been suspended due to issues internal to the NCI and unrelated to our technology.

The progress and timeline for recommencement of this trial, including the timeline for dosing patients, are under the control of the NCI.

We have not generated significant revenue and have incurred significant net losses in each year since our inception.

For the six months ended June 30, 2021, we had a net loss of $44.2 million, and, as of June 30, 2021, we have incurred approximately $808.3 million of accumulated deficit since our inception in 2003.

For the nine months ended September 30, 2021, we had a net loss of $67.0 million, and, as of September 30, 2021, we have incurred approximately $831.1 million of accumulated deficit since our inception in 2003.

We expect to continue to incur significant operating expenditures and net losses.

10 unchanged sentences

Recent Developments

On September 27, 2021, we announced a restructuring enabling us to advance our TCR program.

As a result of the restructuring, approximately 60 positions were eliminated, where the anticipated cost savings associated with the restructuring extend our cash runway.

Given our current development plans and cash management efforts, we anticipate cash resources will be sufficient to fund operations into the second quarter of 2023.

The ongoing COVID-19 global pandemic has presented a significant health and economic challenge around the world and is affecting our employees, partners and business operations.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted.

We have implemented work-from-home policies for non-laboratory functions in response to the COVID-19 pandemic.

The effects of our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

Supply chain disruptions caused by the pandemic may negatively impact productivity, disrupt our business and delay our clinical programs and timelines.

The severity of negative impacts will depend, in part, on the length and magnitude of the disruptions.

These and perhaps more severe disruptions in our operations could negatively impact our business, operating results and financial condition.

We continue to work with our partners to mitigate the impact the COVID-19 pandemic is having on our business.

2 unchanged sentences

The screening study is now open and we are actively identifying patients who may be eligible for our sponsored clinical treatment trial.

We anticipate dosing of the first patient in the clinical treatment study in the second half of 2021.

The clinical treatment trial will be opened for enrollment once clinical manufacturing readiness has been established. 

During 2020, we successfully transferred the manufacturing process to KBI, a contract manufacturing organization with cGMP cell therapy manufacturing facilities in The Woodlands, TX.

 TCR-T batch data generated at both KBI and Ziopharm’s own laboratory were the basis of the CMC portion of the IND filing.

KBI is working to complete the process qualification and aseptic process validation to facilitate clinical manufacturing. 

In addition, Ziopharm has been working to build and open its own cGMP clinical production unit (CPU). 

Commissioning of the CPU, as well as aseptic process validation, were completed in the last quarter.

The company is

completing process qualification which will support the opening of the facility in the fourth quarter of 2021 to manufacture TCR-T cells for the clinical trial.

We continue to qualify TCRs in its library and will amend the IND at the appropriate time to include these additional TCRs.

We expect that the additional TCRs will expand the potential utility and applicable patient population for the Library and may include additional KRAS and / or TP53 mutations or other genetic hotspots associated with solid tumors such as EGFR.

The Company plans on providing a comprehensive update on the Library later this year, including plans to expand the number of TCRs in the Library.

During the second quarter of 2021, we presented a poster at the annual American Association of Cancer Research (AACR) meeting, entitled “Hotspot mutations in KRAS and TP53 targeted by TCR-T cells genetically modified with the Sleeping Beauty transposon/transposase system”.

The poster highlighted preclinical work regarding our TCR-T program and demonstrated that multiple TCRs with unique specificities targeting recurrent p53 and KRAS substitutions in frequent HLA haplotypes could be stably expressed using Sleeping Beauty transposition to re-direct peripheral blood T-cells towards tumor cells.

In March 2021 and as announced by in April 2021, Eden BioCell, our Joint Venture in Taiwan with Tri-Arm Therapeutics, began treating patients in a clinical trial with our investigational CD19 RPM CAR-T cell therapy, under the IND cleared by the Taiwan FDA in December.

Two patients have now been treated in this trial.

We anticipate dosing of the first patient in the clinical treatment study in the first half of 2022.

The clinical treatment study will be opened for enrollment once clinical manufacturing readiness has been established. We have built and will be opening our own cGMP clinical production unit ("CPU"). 

Commissioning of the facility, as well as aseptic process validation, were completed in the second quarter of 2021.

In October we completed engineering and process qualification runs in the CPU.

We are committed to having our internal manufacturing capabilities operational to support the first patient dosing in the first half of 2022.

During 2020, we successfully transferred the manufacturing process to KBI, a contract manufacturing organization with cGMP cell therapy manufacturing facilities in The Woodlands, Texas.

The TCR-T batch data generated at both KBI and Ziopharm’s laboratory were the basis of the CMC portion of the IND filing.

KBI must complete the process qualification and aseptic process validation to facilitate clinical manufacturing at their site. 

We have built and will be opening our own cGMP clinical production unit ("CPU"). 

Commissioning of the facility, as well as aseptic process validation, were completed in the second quarter of 2021.

In October we completed engineering and process qualification runs in the CPU.

We are committed to having our internal manufacturing capabilities operational to support the first patient dosing in the first half of 2022.

We continue to qualify TCRs in our library and will amend the IND at the appropriate time to include these additional TCRs.

We expect that the additional TCRs will expand the potential utility and applicable patient population for the library and may include additional KRAS and TP53 mutations or other genetic hotspots associated with solid tumors (EGFR).

During the second quarter of 2021, we presented a poster at the annual American Association of Cancer Research (AACR) meeting.

The poster highlighted preclinical work regarding our TCR-T program and demonstrated that multiple TCRs with unique specificities targeting recurrent TP53 and KRAS substitutions in frequent HLA haplotypes could be stably expressed using Sleeping Beauty transposition to re-direct peripheral blood T-cells towards tumor cells.

In March 2021 and as announced in April 2021, Eden BioCell, our Joint Venture in Taiwan with TriArm Therapeutics, began treating patients in a clinical trial with our investigational CD19 RPM CAR-T cell therapy, under the IND cleared by the Taiwan FDA in December.

Two patients were treated in this trial.

The lead investigator at National Taiwan University in Taipei, has reported no serious adverse safety events in either of these patients.

1 unchanged sentence

Patients were infused two days after gene transfer, thus shortening the turnaround time and demonstrating an advantage over viral methods.

This additional work will optimize and refine the manufacturing process in order to more consistently manufacture product in the desired clinical dose range seeking to be studied.

The Tri-Arm/Eden team, per the terms of the JV agreement, will undertake the necessary process development work before infusing additional patients.

This will take an unspecified amount of time.

These restrictions are impacting clinical trials broadly in Taiwan.

The structure of the Joint Venture, which is 100% financially supported via investment from Tri-Arm, is beneficial, because it allows us to continue to focus all efforts and capital on the TCR program, which is the focus of our strategy and represents much larger potential commercial opportunity.

Our resources continue to be prioritized on our TCR program. 

As previously described, the TCR and CAR-T processes are distinctly different and have followed very different process development pathways.

While both involve Sleeping Beauty gene transfer, the constructs, and manufacturing processes are very distinct.

Additionally, the TCR-T clinical program is investigating treatment of a range of solid tumors whereas the CAR-T program has been focused on hematological malignancies.

MD Anderson has closed the CD19 RPM CAR-T Allogeneic Phase I clinical trial and withdrew the IND as of June 2021.

In September 2021, TriArm and Ziopharm mutually agreed to dissolve the Eden Biocell Joint Venture.

We will continue seeking a partner for this program.

The decision to dissolve the Eden Biocell Joint Venture further allows us to prioritize our efforts and capital on the TCR-T program, which is the focus of our strategy and represents a much larger potential commercial opportunity.

MD Anderson has closed the CD19 RPM CAR-T Allogeneic Phase 1 clinical trial and withdrew the IND as of June 2021.

We are winding down our existing Controlled IL-12 clinical program for the treatment of recurrent glioblastoma multiforme.

These trials examine the effect of Controlled IL-12 as a monotherapy and in combination with blockade of the immune checkpoint protein PD-1.

We will continue seeking a partner for this program and have also begun exploring potential synergies between this technology and our cell therapy programs.

Appointment of Personnel

In March 2021, Kevin Buchi notified the Board of his intention not to stand for re-election as a director when his term expires at our 2021 annual meeting of stockholders on May 19, 2021.

The size of the Board decreased from eight to seven directors effective as of the date of Mr.

Buchi’s resignation.

Financial Overview

Overview of Results of Operations

Three and Six Months Ended June 30, 2021 Compared to Three and Six Months Ended June 30, 2020

Three and Nine Months Ended September 30, 2021 Compared to Three and Nine Months Ended September 30, 2020

License Income.

License income during the three and nine months ended September 30, 2021 and 2020 were as follows:

Three months ended

September 30,

Nine months ended

September 30,

($ in thousands)

Collaboration revenue

Collaboration revenue during the three and nine months ended September 30, 2021 was $0.4 million compared to zero during the three and nine months ended September 30, 2020.

In the current year, we received $0.4 million under our Collaboration Agreement.

Research and development expenses.

Research and development expenses during the three and six months ended June 30, 2021 and 2020 were as follows:

Research and development expenses during the three and nine months ended September 30, 2021 and 2020 were as follows:

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

($ in thousands)

Research and development

Research and development expenses for the three months ended June 30, 2021 increased by $1.5 million when compared to the three months ended June 30, 2020.

The increase in research and development expenses for the three months ended June 30, 2021 is primarily due to a $3.0 million increase in headcount, stock compensation, and facilities costs related to the expansion of personnel focused on TCR efforts and commissioning of our cGMP CPU as well as an increase of $2.2 million of Cell Therapy program related costs.

The increase in employee and build-out costs was offset by a reduction of approximately $3.7 million in reduced third party costs as we wind down our Controlled IL-12 program.

Research and development expenses for the six months ended June 30, 2021 increased by $2.1 million when compared to the six months ended June 30, 2020.

The increase in research and development expenses for the six months ended June 30, 2021 is primarily due to a $6.4 million increase in headcount, stock compensation, and facilities costs related to the expansion of personnel focused on TCR efforts and commissioning of our cGMP CPU and an increase of $3.0 million related to Cell Therapy costs.

The $9.4 million dollar increase was offset by approximately $7.3 million of decreased Controlled IL-12 program costs.

Our research and development expense consists primarily of salaries and related expenses for personnel, costs of contract manufacturing services, costs of facilities and equipment, fees paid to professional service providers in conjunction with our clinical trials, fees paid to contract research organizations in conjunction with preclinical animal studies, costs of materials used in research and development, consulting, license and milestone payments and sponsored research fees paid to third parties.

Research and development expenses for the three months ended September 30, 2021 increased by $0.6 million when compared to the three months ended September 30, 2020 primarily due to a $2.2 million charge recognized during the third quarter related to our strategic restructuring event announced on September 27, 2021.

The increase was primarily offset by $1.6 million in reduced trial and consulting costs.

Research and development expenses for the nine months ended September 30, 2021 increased by $2.7 million when compared to the nine months ended September 30, 2020 primarily due to a $2.2 million charge recognized during the third quarter related to our strategic restructuring event announced on September 27, 2021, an increase of $4.8 million related to salary and employee related expenses and a $1.5 million increase in facilities and other related expenses.

The increase during the period was offset by reduced program related costs of $5.8 million in program and consulting costs in comparison to the nine months ended September 30, 2020.

Our research and development expense consists primarily of salaries and related expenses for personnel, costs of contract manufacturing services, costs of facilities and equipment, fees paid to professional service providers in conjunction with our clinical trials, fees paid to contract research organizations in conjunction with costs of materials used in research and development, consulting, license and milestone payments and sponsored research fees paid to third parties.

We have not accumulated and tracked our internal historical research and development costs or our personnel and personnel-related costs on a program-by-program basis.

2 unchanged sentences

We do track our accumulated costs by program for costs incurred by outside vendors conducting research for our named clinical candidates.

For the three months ended June 30, 2021, our clinical stage projects included a Phase 1/2 clinical trial evaluating TCRs from our library for the investigational treatment of long cholangiocarinoma, pancreatic, colorectal and gynecological cancers, a Phase 1 clinical trial with Ad-RTS-IL-12 plus veledimex in progressive glioblastoma;

For the three months ended September 30, 2021, our clinical stage projects included a Phase 1/2 clinical trial evaluating TCRs from our library for the investigational treatment of long cholangiocarinoma, pancreatic, colorectal and gynecological cancers, a Phase 1 clinical trial with Ad-RTS-IL-12 plus veledimex in progressive glioblastoma;

a Phase 1 clinical trial infusing our 2nd generation CD19-specific CAR + T cells in patients with advanced lymphoid malignancies;

1 unchanged sentence

and a Phase 2 clinical trial of Ad-RTS-hIL-12 with veledimex in combination with cemiplimab-rwlc in progressive glioblastoma.

The expenses incurred by us to third parties for our Phase 1/2 clinical trial evaluating TCRs from our library for the investigational treatment of long cholangiocarinoma, pancreatic, colorectal and gynecological cancers were $4.4 million for the three months ended June 30, 2021 and $7.0 million from the project’s inception in February 2021 through June 30, 2021.

The expense incurred by us to third parties for our Phase 2 clinical trial of Ad-RTS-hIL-12 with veledimex in combination with cemiplimab-rwlc in progressive glioblastoma were zero for the three months ended June 30, 2021 and $6.7 million from the projects inception in June 2019 through June 30, 2021.

The expenses incurred by us to third parties for our Phase 1/2 clinical trial of Ad-RTS-hIL-12 with veledimex for the treatment of pediatric brain tumors were $0.2 million for the three months ended June 30, 2021 and $2.7 million from the project’s inception in October 2017 through June 30, 2021.

The expenses incurred by us to third parties for our Phase 1 clinical trial with Ad-RTS-IL-12 plus veledimex in progressive glioblastoma were zero for the three months ended June 30, 2021 and $14.6 million from the project’s inception in September 2015 through June 30, 2021.

The expenses incurred by us to third parties for our Phase 1 clinical trial infusing our 2nd generation CD19-specific CAR + T cells in patients with advanced lymphoid malignancies were zero for the three and six months ended June 30, 2021 and $6.2 million from the project’s inception in December 2015 through June 30, 2021.

Costs incurred by outside vendors conducting research for our named clinical candidates during the three months ended September 30, 2021 and through inception is as follows:

Three Months Ended

Since Inception, Through

September 30, 2021

Direct external expenses by program:

Ad-RTS-hIL-12 with veledimex in combination with cemiplimab-rwlc

Ad-RTS-hIL-12 with veledimex for the treatment of pediatric brain tumors

Ad-RTS-IL-12 plus veledimex in progressive glioblastoma

CD19-specific CAR+ T cells in patients with advanced lymphoid malignancies

Our future research and development expenses in support of our current and future programs will be subject to numerous uncertainties in timing and cost to completion.

1 unchanged sentence

We may conduct multiple clinical trials for each product.

As we obtain results from trials, we may elect to discontinue or

delay clinical trials for certain products to focus our resources on more promising products or indications.

As we obtain results from trials, we may elect to discontinue or delay clinical trials for certain products to focus our resources on more promising products or indications.

Completion of clinical trials may take several years or more, and the length of time generally varies substantially according to the type, complexity, novelty and intended use of a product.

16 unchanged sentences

General and administrative expenses.

General and administrative expenses during the three and six months ended June 30, 2021 and 2020 were as follows:

General and administrative expenses during the three and nine months ended September 30, 2021 and 2020 were as follows:

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

($ in thousands)

General and administrative

General and administrative expenses for the three months ended June 30, 2021 increased by $2.5 million as compared to three months ended June 30, 2020.

The increase during the three months ended June 30, 2021 was primarily due to increases related to employee related expenses including noncash stock compensation expense pursuant to our separation agreement with our former Chief Executive Officer.

General and administrative expenses for the six months ended June 30, 2021 increased by $4.8 million as compared to six months ended June 30, 2020.

The increase during the six months ended June 30, 2021 was primarily due to an increase of $3.6 million related to employee related expenses, $0.9 million related employee-related separation expenses, and $0.2 million expenses incurred related to consulting service costs.

General and administrative expenses for the three months ended September 30, 2021 increased by $1.8 million as compared to three months ended September 30, 2020 primarily related to $1.3 million in employee related severance charges in association with our September 2021 strategic reduction in force recognized during the quarter and an increase of $0.8 million related to consulting service costs.

The increases were offset by a $0.3 million decrease in salary and employee related costs.

General and administrative expenses for the nine months ended September 30, 2021 increased by $6.6 million as compared to nine months ended September 30, 2020 primarily due to an increase of $1.3 million in employee related severance charges associated with our September 2021 strategic reduction in force, $4.2 million related to employee related expenses, and $1.1 million related to consulting service costs.

Other income (expense), net.

Other income, net for the three and six months ended June 30, 2021 and 2020 was as follows:

Other income, net for the three and nine months ended September 30, 2021 and 2020 was as follows:

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

($ in thousands)

Interest expense, net

Other expense, net

Other income (expense), net

Other income (expense) for the three and six months ended June 30, 2021 decreased as compared to the three and six months ended June 30, 2020 due to a decrease in our cash balance and a decline in interest rates due to market fluctuations.

Other expense, net for the three and nine months ended September 30, 2021 increased as compared to the three and nine months ended September 30, 2020 due to interest expense associated with our Term Loan with Silicon Valley Bank.

Liquidity and Capital Resources

3 unchanged sentences

To date, we have financed our operations primarily through public offerings of our common stock, private placements of our convertible equity securities, term debt and collaborations.

Through June 30, 2021, we have received an aggregate of $714.1 million from public offerings and through sales under our “at-the market”

offering program.

Through September 30, 2021, we have received an aggregate of $739.1 million from issuances of equity and with our term loan with Silicon Valley Bank.

On August 6, 2021, the Company entered into a Loan and Security Agreement with Silicon Valley Bank and affiliates of Silicon Valley Bank (collectively, “SVB”) (the “Term Loan Agreement”).

The Term Loan Agreement provides for an initial term loan of $25.0 million funded at the closing, with an additional tranche of $25.0 million available if certain funding and clinical milestones are met by August 31, 2022.

Principal repayments will start on April 1, 2022, unless certain milestones are reached prior to that date.

February 2020 Public Offering

7 unchanged sentences

At-the-Market Facility

In June 2019, we entered into an Open Market Sale Agreement, or Sales Agreement, with Jefferies LLC, or Jefferies, as a sale agent pursuant to which we may offer and sell, from time to time through Jefferies, shares of our common stock having an aggregate offering value of up to $100.0 million.

In June 2019, we entered into an Open Market Sale Agreement, or Sales Agreement, with Jefferies as a sale agent pursuant to which we may offer and sell, from time to time through Jefferies, shares of our common stock having an aggregate offering value of up to $100.0 million.

Shares will be sold pursuant to our effective registration statement on Form S-3ASR (File No.

2 unchanged sentences

The compensation to Jefferies for sales of our common stock pursuant to the sales agreement will be an amount equal to 3% of the gross proceeds of any shares of common stock sold under the sales agreement.

During the six months ended June 30, 2020, we issued and sold an aggregate of 2,814,673 shares of its common stock.

During the nine months ended September 30, 2020, we issued and sold an aggregate of 2,814,673 shares of its common stock.

The offering was made pursuant to our effective registration statement on Form S-3ASR (File No.

1 unchanged sentence

The net proceeds from the offering were approximately $13.0 million after deducting underwriting discounts and offering expenses payable by us.

We did not sell any shares of its common stock under the at-the-market facility during the three months ended June 30, 2021.

On August 6, 2021, the Company entered into a credit and security agreement with a lender (the “Term Loan Agreement”).

The Term Loan Agreement provides for an initial term loan of $25.0 million funded at the closing, with an additional tranche of $25.0 million available if certain funding and clinical milestones are met by August 31, 2022.

Interest on the term loan is payable monthly in arrears at an annual interest rate of the greater of 7.75% or the prime rate plus a margin of 4.5%.

The term loan amortization date is April 1, 2022;

provided, however, if the Company raises $50M in funding on or prior to March 31, 2022, the term loan first payment date shall automatically be extended to September 1, 2022.

term loan maturity date is March 1, 2023;

provided, however, if Company achieves the funding milestones, the term loan maturity date shall automatically be extended to August 1, 2025.

There is a final payment due of 5.75%.

The Company granted a warrant at the closing to purchase 432,843 shares at $2.22 per share.

The Company will grant a similar warrant if it draws the second $25.0 million tranche.

We did not sell any shares of our common stock under the at-the-market facility during the three or nine months ended September 30, 2021.

Funding Requirements

Given our current development plans, we expect that our existing cash and cash equivalents, plus the $25.0 million gross debt proceeds raised in August 2021, will be sufficient to fund our current operations into the fourth quarter of 2022.

Given our current development plans and cash management efforts, we anticipate cash resources will be sufficient to fund operations into the second quarter of 2023.

We currently do not have any committed sources of additional capital at this time.

10 unchanged sentences

If we exhaust our capital reserves more quickly than anticipated, regardless of the reason, and we are unable to obtain additional financing on terms acceptable to us or at all, we will be unable to proceed with development of some or all of our product candidates on expected timelines and will be forced to prioritize among them.

The following table summarizes our net decrease in cash, cash equivalents, and restricted cash for the three months ended June 30, 2021 and 2020:

Six months ended

The following table summarizes our net decrease in cash, cash equivalents, and restricted cash for the nine months ended September 30, 2021 and 2020:

Nine months ended

September 30,

($ in thousands)

3 unchanged sentences

Financing activities

Net increase in cash, cash equivalents, and restricted cash

Net increase (decrease) in cash and cash equivalents

Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.

Operating cash flow is derived by adjusting our net loss for:

Operating activities is derived by adjusting our net loss for:

Non-cash operating items such as depreciation and stock-based compensation;

Changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations.

Net cash used in operating activities for the six months ended June 30, 2021 was $36.8 million, as compared to net cash used in operating activities of $23.9 million for the six months ended June 30, 2020.

The net cash used in operating activities for the six months ended June 30, 2021 was primarily due to our net loss of $44.2 million, the decrease in prepaid and other current assets of $5.8 million offset by an increase in receivables of $3.0 million related to the use of our funds at MD Anderson, the change in accrued expenses of $4.8 million, the change in non-cash stock-based compensation of $7.5 million, and increase in lease liabilities of $0.8 million.

Net cash used in investing activities was $2.6 million for the six months ended June 30, 2021 compared to $4.0 million for the six months ended June 30, 2020.

Net cash provided by financing activities the six months ended June 30, 2021 was $1.0 million related to proceeds from the exercise of stock options.

Net cash provided by financing activities the six months ended June 30, 2020 was $101.7 million, which included $88.7 million from the issuance of common stock in our public offering, net and $13.0 million from the issuance of common stock in our at the market offerings, net.

Net cash used in operating activities for the nine months ended September 30, 2021 was $46.3 million, as compared to net cash used in operating activities of $40.0 million for the nine months ended September 30, 2020.

The net cash used in operating activities for the nine months ended September 30, 2021 was primarily due to our net loss of $66.0 million, the decrease in prepaid and other current assets of $7.5 million, a decrease in receivables of $3.2 million related to the collection of our outstanding receivables and use of funds at MD Anderson, a change in accrued expenses of $3.2 million, non-cash stock-based compensation of $9.9 million, and an increase in lease liabilities of $0.6 million.

Net cash used in investing activities was $3.0 million for the nine months ended September 30, 2021 compared to $6.0 million for the nine months ended September 30, 2020.

The change of $3.1 million is a result of cash used to expand our internal cell therapy capabilities in our Houston, Texas facilities during the nine months ended September 30, 2020 in comparison to the nine months ended September 30, 2021.

Net cash provided by financing activities for the nine months ended September 30, 2021 was $26.0 million related to proceeds from our Term Loan with Silicon Valley bank and the exercise of stock options.

Net cash provided by financing activities for the nine months ended September 30, 2020 was $101.7 million, which included $88.7 million from the issuance of common stock in our public offering, net and $13.0 million from the issuance of common stock in our at the market offerings, net.

Operating capital and capital expenditure requirements

We anticipate that losses will continue for the foreseeable future.

At June 30, 2021, our accumulated deficit was approximately $808.3 million.

At September 30, 2021, our accumulated deficit was approximately $831.1 million.

Our actual cash requirements will depend on and could increase significantly as a result of a number of factors, including:

11 unchanged sentences

“Risk Factors.”

Our working capital as of June 30, 2021 was $75.8 million, consisting of $89.4 million in current assets and $13.6 million in current liabilities.

Our working capital as of September 30, 2021 was $68.5 million, consisting of $96.6 million in current assets and $28.1 million in current liabilities.

Working capital as of December 31, 2020 was $112.2 million, consisting of $130.6 million in current assets and $18.4 million in current liabilities.

In May 2021, as a result of our review of our research and development portfolio, we announced the realigning of resources behind our Sleeping Beauty program.

Resources currently deployed towards our Controlled IL-12 clinical program are currently being reduced, and we anticipate the realignment of resources will reduce cash expenditures on the Controlled IL-12 program.

The Company announced that it will be winding down our existing Controlled IL-12 clinical program, and we anticipate the realignment of resources will reduce cash expenditures on the Controlled IL-12 program.

On September 27, 2021, in order to lower our existing cost structure, we also announced a strategic reduction in force and notified approximately 60 full-time employees of our intention to terminate their employment services.

Contractual Obligations

The following table summarizes our outstanding obligations as of June 30, 2021 and the effect those obligations are expected to have on our liquidity and cash flows in future periods:

The following table summarizes our outstanding obligations as of September 30, 2021 and the effect those obligations are expected to have on our liquidity and cash flows in future periods:

($ in thousands)

3 unchanged sentences

Royalty and license fees

Strategic advisory fees

Operating Leases

Our commitments for operating leases relate to the lease for our corporate headquarters in Boston, Massachusetts, and laboratory and office space in Houston, Texas.

On December 21, 2015 and April 15, 2016, we renewed the lease for our corporate headquarters in

Boston, MA through August 31, 2021.

On April 22, 2021, we extended our lease for a portion of office space currently held at our corporate office headquarters in Boston.

The renewal of the portion of our corporate office headquarters was originally set to expire on August 31, 2021, but has now been extended through August 31, 2026.

On December 21, 2015 and April 15, 2016, we renewed the lease for our office space in Boston, MA through August 31, 2021.

On April 22, 2021, we extended our lease for a portion of office space currently held at our office space in Boston.

The renewal of the portion of our office space was originally set to expire on August 31, 2021, but has now been extended through August 31, 2026.

On January 30, 2018, we entered into a lease agreement for office space in Houston, TX at MD Anderson through April 2021.

5 unchanged sentences

On December 15, 2020, we entered into another lease for additional office and laboratory space in Houston through April 2028.

Royalty and License Fees

On January 10, 2017, we announced the signing of a Cooperative Research and Development Agreement, or CRADA with the NCI for the development of ACT-based immunotherapies genetically modified using the Sleeping Beauty transposon/transposase system for the treatment of solid tumors.

In February 2019, we extended the CRADA with the NCI until January 9, 2022.

On May 28, 2019, we entered into a patent license agreement, or the Patent License, with the NCI.

The terms of the Patent License require us to pay the NCI minimum annual royalties in the amount of $0.3 million, which amount will be reduced to $0.1 million once the aggregate minimum annual royalties paid by us equals $1.5 million.

As of September 30, 2021, we do not expect to incur any further fees associated with the CRADA.

On October 5, 2018, we entered into the License Agreement with PGEN Therapeutics, Inc.

1 unchanged sentence

Under the License Agreement, we are obligated to pay PGEN an annual licensing fee of $0.1 million expected to be paid through the term of the agreement.

On November 27, 2020, we entered into two agreements for strategic advisory services that require us to pay $1.5 million through the end of the service period, concluding in September 2021.

Off-balance Sheet Arrangements

5 unchanged sentences

and income taxes.

We reviewed our policies and determined that those policies remain our most critical accounting policies for the six months ended June 30, 2021.

We reviewed our policies and determined that those policies remain our most critical accounting policies for the nine months ended September 30, 2021.

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

What changed 10-Q

Item 1. Financial Statements