Alaunos Therapeutics, Inc. 10-Q

Item 1. Financial Statements ZIOPHARM Oncology, Inc. BALANCE SHEETS (unaudited) (in thousands, except share and per share data) September 30, 2021 December 31, 2020 ASSETS Current assets: Cash and cash equivalents $ 91,725 $ 115,069 Receivables 1,510 4,665 Prepaid expenses and other current assets 3,319 10,855 Total current assets 96,554 130,589 Property and equipment, net 11,662 10,231 Right of use asset 5,179 4,650 Deposits 365 130 Other non-current assets 2 745 Total assets $ 113,762 $ 146,345 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,463 $ 960 Current portion of long-term debt 12,037 — Accrued expenses 13,963 16,589 Lease liability - current portion 710 819 Total current liabilities 28,173 18,368 Long-term debt 12,174 — Lease liability - non-current portion 4,708 3,995 Total liabilities 45,055 22,363 Commitments and contingencies (Note 8 ) Stockholders’ equity: Common stock, $ 0.001 par value; 350,000,000 shares authorized; 216,145,804 and 214,591,906 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 216 215 Additional paid-in capital 899,549 887,868 Accumulated deficit ( 831,058 ) ( 764,101 ) Total stockholders’ equity 68,707 123,982 Total liabilities and stockholders’ equity $ 113,762 $ 146,345 The accompanying notes are an integral part of the unaudited interim financial statements. 6 ZIOPHARM Oncology, Inc. STATEMENTS OF OPERATIONS (unaudited) (in thousands, except share and per share data) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Collaboration revenue $ 398 $ — $ 398 $ — Operating expenses: Research and development 14,521 13,968 41,427 38,725 General and administrative 8,173 6,353 25,469 18,862 Total operating expenses 22,694 20,321 66,896 57,587 Loss from operations ( 22,296 ) ( 20,321 ) ( 66,498 ) ( 57,587 ) Other income (expense): Interest income (expense), net ( 444 ) 7 ( 444 ) 412 Other income (expense), net 7 ( 1 ) ( 15 ) ( 29 ) Other income (expense), net ( 437 ) 6 ( 459 ) 383 Net loss $ ( 22,733 ) $ ( 20,315 ) $ ( 66,957 ) $ ( 57,204 ) Basic and diluted net loss per share $ ( 0.11 ) $ ( 0.10 ) $ ( 0.31 ) $ ( 0.27 ) Weighted average common shares outstanding, basic and diluted 214,542,465 212,837,367 214,310,349 208,497,410 The accompanying notes are an integral part of the unaudited interim financial statements. 7 ZIOPHARM Oncology, Inc. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited) (in thousands) For the Three Months Ended September 30, 2021 Common Stock Additional Paid In Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at June 30, 2021 215,559,148 $ 216 $ 896,390 $ ( 808,325 ) $ 88,281 Stock-based compensation - - 2,371 - 2,371 Restricted stock awards 875,000 - - - - Cancelled restricted common stock ( 288,344 ) - - - - Issuance of warrants - - 788 - 788 Net loss - - - ( 22,733 ) ( 22,733 ) Balance at September 30, 2021 216,145,804 $ 216 $ 899,549 $ ( 831,058 ) $ 68,707 For the Nine Months Ended September 30, 2021 Common Stock Additional Paid In Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2020 214,591,906 $ 215 $ 887,868 $ ( 764,101 ) $ 123,982 Stock-based compensation - - 9,857 - 9,857 Exercise of employee stock options 363,109 - 1,037 - 1,037 Restricted stock awards 1,601,224 1 ( 1 ) - - Cancelled restricted common stock ( 410,435 ) - - - - Issuance of warrants - - 788 - 788 Net loss - - - ( 66,957 ) ( 66,957 ) Balance at September 30, 2021 216,145,804 $ 216 $ 899,549 $ ( 831,058 ) $ 68,707 The accompanying notes are an integral part of the unaudited interim financial statements. 8 ZIOPHARM Oncology, Inc. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (continued) For the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited) (in thousands) For the Three Months Ended September 30, 2020 Common Stock Additional Paid In Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at June 30, 2020 214,150,940 $ 214 $ 884,214 $ ( 721,014 ) $ 163,414 Stock-based compensation - - 1,792 - 1,792 Exercise of employee stock options 14,750 - 27 - 27 Net loss - - - ( 20,315 ) ( 20,315 ) Balance at September 30, 2020 214,165,690 $ 214 $ 886,033 $ ( 741,329 ) $ 144,918 For the Nine Months Ended September 30, 2020 Common Stock Additional Paid In Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2019 181,803,320 $ 182 $ 778,953 $ ( 684,125 ) $ 95,010 Stock-based compensation - - 5,393 - 5,393 Exercise of employee stock options 22,916 - 43 - 43 Issuance of restricted common stock 555,900 1 ( 1 ) - - Cancelled restricted common stock ( 141,230 ) - - - - Issuance of common stock in connection with a public offering, net of commissions and expense of $ 5.9 million 29,110,111 29 88,632 - 88,661 Issuance of common stock in connection with an at the market offering, net of commissions of $ 0.4 million 2,814,673 2 13,013 - 13,015 Net loss ( 57,204 ) ( 57,204 ) Balance at September 30, 2020 214,165,690 $ 214 $ 886,033 $ ( 741,329 ) $ 144,918 The accompanying notes are an integral part of the unaudited interim financial statements. 9 ZIOPHARM Oncology, Inc. STATEMENTS OF CASH FLOWS (unaudited) (in thousands) For the Nine Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss $ ( 66,957 ) $ ( 57,204 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 1,892 708 Amortization of financing costs 148 - Stock-based compensation 9,857 5,393 (Increase) decrease in: Receivables 3,155 ( 2,098 ) Prepaid expenses and other current assets 7,646 8,249 Right of use asset ( 529 ) ( 98 ) Other noncurrent assets 508 ( 636 ) Increase (decrease) in: Accounts payable 503 1,713 Accrued expenses ( 3,169 ) 3,828 Lease liabilities 604 168 Net cash used in operating activities ( 46,342 ) ( 39,977 ) Cash flows from investing activities: Purchases of property and equipment ( 2,964 ) ( 6,012 ) Net cash used in investing activities ( 2,964 ) ( 6,012 ) Cash flows from financing activities: Proceeds from long-term debt borrowing 25,000 - Debt issuance costs ( 75 ) - Proceeds from exercise of stock options 1,037 43 Issuance of common stock in connection with a public offering, net - 88,661 Issuance of common stock in connection with at the market offerings, net - 13,015 Net cash provided by financing activities 25,962 101,719 Net increase (decrease) in cash and cash equivalents ( 23,344 ) 55,730 Cash and cash equivalents, beginning of period 115,069 79,741 Cash and cash equivalents, end of period $ 91,725 $ 135,471 Supplementary disclosure of cash flow information: Cash paid for interest $ 136 $ — Amounts included in accrued expenses and accounts payable related to property and equipment $ 348 $ 1,163 Issuance costs in accounts payable and accrued expenses $ 184 $ — Supplementary disclosure of noncash investing and financing activities Warrants issued in a term loan $ 788 $ — The accompanying notes are an integral part of the unaudited interim financial statements. 10 ZIOPHARM Oncology, Inc. NOTES TO FINANCIAL STATEMENTS (unaudited) 1. Business Overview ZIOPHARM Oncology, Inc., which is referred to herein as “Ziopharm,” or the “Company,” 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. In May 2021, the Company announced that it will be winding down our existing Controlled IL-12 clinical program for the treatment of recurrent glioblastoma multiforme. 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 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 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 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 The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. 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 presentation of the financial position of the Company and its results of operations and cash flows for the periods presented. 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 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. 11 Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known. The Company’s most significant estimates and judgments used in the preparation of its financial statements are:  Clinical trial expenses and other research and development expenses;  Collaboration agreements;  Fair value measurements of stock-based compensation; and  Income taxes. Impact of COVID-19 Pandemic With the ongoing COVID-19 pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its business and operations. 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. 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. 2. Financings 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. 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 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. The offering was made pursuant to the Company’s effective registration statement on Form S-3ASR (File No. 333-232283) previously filed with the SEC, and a prospectus supplement thereunder. The underwriters purchased the 27,826,086 shares on February 5, 2020. The net proceeds from the offering were approximately $ 84.8 million after deducting underwriting discounts and offering expenses paid by the Company. On March 10, 2020, the underwriters exercised their option to purchase an additional 1,284,025 shares. The net proceeds were approximately $ 3.9 million after deducting underwriting discounts and offering expenses paid by the Company. 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. 12 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. 3. Summary of Significant Accounting Policies The Company’s significant accounting policies were identified in the Company’s Annual Report. There have been no material changes in those policies since the filing of its Annual Report except as noted below. New Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. T he Company adopted this standard effective January 1, 2021, with no material impact upon adoption . 4. Debt The carrying values of our debt obligation were as follows: September 30, 2021 Term Loan Agreement $ 25,078 Unamortized discount on Term Loan Agreement ( 867 ) Total debt 24,211 Less: current portion of long-term debt ( 12,037 ) Long-term debt $ 12,174 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. 13 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. 5. Fair Value Measurements The Company accounts for its financial assets and liabilities using fair value measurements. The authoritative accounting guidance defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:  Level 1 - Quoted prices in active markets for identical assets or liabilities.  Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.  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 September 30, 2021 and December 31, 2020 were as follows: ($ in thousands) Fair Value Measurements at Reporting Date Using Description Balance as of September 30, 2021 Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents $ 84,891 $ 84,891 $ — $ — 14 ($ in thousands) Fair Value Measurements at Reporting Date Using Description Balance as of December 31, 2020 Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents $ 75,990 $ 75,990 $ — $ — The cash equivalents represent deposits in short-term United States treasury money market mutual funds quoted in an active market and classified as a Level 1 asset. 6. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. 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 September 30, 2021 and 2020, respectively: September 30, 2021 2020 Stock options 11,072,894 6,572,191 Inducement stock options 97,500 863,333 Unvested restricted stock 1,510,655 1,289,389 Warrants 22,705,571 22,272,727 35,386,620 30,997,640 7. Related Party Transactions 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 8). Collaboration with PGEN and MD Anderson 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 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 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 15 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, 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. Eden BioCell is owned equally by the Company and TriArm and the parties share decision-making authority. TriArm has contributed $ 10.0 million to Eden BioCell. TriArm also manages all clinical development in the territory pursuant to a Master Services Agreement between TriArm and Eden BioCell. James Huang, who became a director of the Company in July 2020, Chairman of the Board of Directors in January 2021 and Executive Chairman in February 2021, was the founder and serves as managing partner of Panacea Venture, which is an investor in TriArm. Mr. Huang also serves as a member of Eden BioCell’s Board of Directors. 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. 8 . Commitments and Contingencies License Agreements Exclusive License Agreement with PGEN Therapeutics On October 5, 2018, the Company entered into an exclusive license agreement, or the License Agreement, with PGEN. As between the Company and PGEN, the terms of the License Agreement replace and supersede the terms of: (a) that certain Exclusive Channel Partner Agreement by and between the Company and Precigen, dated January 6, 2011, as amended by the First Amendment to Exclusive Channel Partner Agreement effective September 13, 2011, the Second Amendment to the Exclusive Channel Partner Agreement effective March 27, 2015, and the Third Amendment to Exclusive Channel Partner Agreement effective June 29, 2016, which was subsequently assigned by Precigen to PGEN; (b) certain rights and obligations pursuant to that certain License and Collaboration Agreement effective March 27, 2015 between Ziopharm, Precigen and ARES TRADING S.A., or Ares Trading, a subsidiary of Merck KGaA, or Merck, as assigned by Precigen to PGEN, or the Ares Trading Agreement; (c) that certain License Agreement between the Company, Precigen, and MD Anderson, with an effective date of January 13, 2015, or the MD Anderson License, which was subsequently assigned by Precigen and assumed by PGEN effective as of January 1, 2018; and (d) that certain Research and Development Agreement between the Company, Precigen and MD Anderson with an effective date of August 17, 2015, or the Research and Development Agreement, and any amendments or statements of work thereto. Pursuant to the terms of the License Agreement, PGEN has granted the Company exclusive, worldwide rights to research, develop and commercialize (i) products utilizing PGEN’s RheoSwitch ® gene switch, or RTS ® , for the treatment of cancer, referred to as IL-12 Products, (ii) CAR products directed to (A) CD19 for the treatment of cancer, referred to as CD19 Products, and (B) a second target for the treatment of cancer, subject to the rights of Ares Trading to pursue such target under the Ares Trading Agreement, and (iii) T-cell receptor, or TCR, products designed for neoantigens for the treatment of cancer. PGEN has also granted the Company an exclusive, worldwide, royalty-bearing, sub-licensable license for certain patents relating to the Sleeping Beauty technology to research, develop and commercialize TCR products for both neoantigens and shared antigens for the treatment of cancer, referred to as TCR Products. The Company is solely responsible for all aspects of the research, development and commercialization of the exclusively licensed products for the treatment of cancer. The Company is required to use commercially reasonable efforts to develop and commercialize IL-12 Products, CD19 Products and TCR Products. 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 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 digits to high-single digits on the net sales derived 16 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. The Company will also pay PGEN 20 % of any sublicensing income received by the Company relating to the licensed products. 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 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. License Agreement—The University of Texas MD Anderson Cancer Center On January 13, 2015, the Company, together with Precigen, entered into the MD Anderson License with MD Anderson (which Precigen subsequently assigned to PGEN). Pursuant to the MD Anderson License, the Company, together with Precigen, holds 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 was the Company’s Chief Executive Officer from May 2015 to February 2021 and was formerly a tenured professor of pediatrics at MD Anderson. On February 25, 2021, the Company announced that Dr. 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. 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; provided, however, that following the expiration of the term of the MD Anderson License, the Company, together with PGEN, shall have a fully-paid up, royalty free, perpetual, irrevocable and sublicensable license to use the licensed intellectual property thereunder. 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 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. In addition, the MD Anderson License will terminate upon the occurrence of certain insolvency events for both the Company and PGEN and may be terminated by the mutual written agreement of the Company, PGEN, and MD Anderson. On August 17, 2015, the Company, Precigen and MD Anderson entered into the Research and Development, or the 2015 Agreement, to formalize the scope and process for the transfer by MD Anderson, pursuant to the terms of the MD Anderson License, of certain existing research programs and related technology rights, as well as the terms and conditions for future collaborative research and development of new and ongoing research programs. Pursuant to the 2015 Agreement, the Company, Precigen and MD Anderson formed a joint steering committee to oversee and manage the new and ongoing research programs. Under the License Agreement with PGEN, the Company and PGEN agreed that PGEN would no longer participate on the joint steering committee after the date of the License Agreement. As provided under the MD Anderson License, the Company provided funding for research and development activities in support of the research programs under the Research and Development Agreement for a period of three years and in an amount of no less than $ 15.0 million and no greater than $ 20.0 million per year. 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 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. 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. 17 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. The Company will own all intellectual property developed under the 2019 Agreement and will retain all rights to intellectual property for oncology products manufactured using non-viral gene transfer technologies under the Agreement, including the Company’s Sleeping Beauty technology. The Company has granted MD Anderson an exclusive license for such intellectual property outside the field of oncology and to develop and commercialize autologous TCR products manufactured using viral gene transfer technologies, and a non-exclusive license for allogeneic TCR products manufactured using viral-based technologies. The Company has agreed, beginning on January 1, 2021, to reimburse MD Anderson up to a total of $ 20.0 million for development costs incurred starting after January 1, 2021 under the 2019 Agreement. In addition, the Company will pay MD Anderson royalties on net sales of its TCR products at rates in the low-single digits. The Company is required to make performance-based payments upon the successful completion of clinical and regulatory benchmarks relating to its TCR products. The aggregate potential benchmark payments are $ 36.5 million, of which only $ 3.0 million will be due prior to the first marketing approval of the Company’s TCR products. The royalty rates and benchmark payments owed to MD Anderson may be reduced upon the occurrence of certain events. 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 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 – Warrants for further details. License Agreement with the National Cancer Institute On May 28, 2019, the Company entered into a patent license agreement, or the Patent License, with the National Cancer Institute, or the NCI. Pursuant to the Patent License, the Company holds an exclusive, worldwide license to certain intellectual property to develop and commercialize patient-derived (autologous), peripheral blood T-cell therapy products engineered by transposon-mediated gene transfer to express TCRs reactive to mutated KRAS, TP53 and EGFR. In addition, pursuant to the Patent License, the Company holds an exclusive, worldwide license to certain intellectual property for manufacturing technologies to develop and commercialize autologous, peripheral blood T-cell therapy products engineered by non-viral gene transfer to express TCRs, as well as a non-exclusive, worldwide license to certain additional manufacturing technologies. Pursuant to the terms of the Patent License, the Company is required to pay the NCI a cash payment in the aggregate amount of $ 1.5 million, payable in $ 0.5 million installments within sixty days, six-months, and the twelve-month anniversary of the effective date of the agreement of the Patent License. The $ 1.5 million was paid as of December 31, 2020. On January 8, 2020, the Company entered into an amendment to the Patent License which expanded the TCR library to include additional TCRs reactive to mutated KRAS and TP53. The terms of the Patent License also require the Company 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 the Company equals $ 1.5 million. The first minimum annual royalty payment is payable on the date that is eighteen months following the date of the Patent License . 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. On April 16, 2021, the Company entered into a third amendment to the patent license agreement which modified the terms governing termination, modification and surrender of rights under the license. 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 18 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. The aggregate potential amount of these benchmark payments is $ 12.0 million. The Company must also pay the NCI royalties on net sales of products covered by the Patent License at rates in the low to mid-single digits depending upon the technology included in a licensed product. To the extent the Company enters into a sublicensing agreement relating to a licensed product, the Company is required to pay the NCI a percentage of all consideration received from a sublicensee, which percentage will decrease based on the stage of development of the licensed product at the time of the sublicense. The Patent License will expire upon expiration of the last patent contained in the licensed patent rights, unless terminated earlier. The NCI may terminate or modify the Patent License in the event of a material breach, including if the Company does not meet certain milestones by certain dates, or upon certain insolvency events that remain uncured following the date that is 90 days following written notice of such breach or insolvency event . The Company may terminate the Patent License, or any portion thereof, in the Company’s sole discretion at any time upon 60 days’ written notice to the NCI. In addition, the NCI has the right to: (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 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 On January 10, 2017, the Company announced the signing of a CRADA, with the NCI for the development of adoptive cell transfer, or ACT, based immunotherapies genetically modified using the Sleeping Beauty transposon/transposase system to express TCRs for the treatment of solid tumors. The principal goal of the CRADA is to develop and evaluate ACT for patients with advanced cancers using autologous peripheral blood lymphocytes, or PBL, genetically modified using the non-viral Sleeping Beauty system to express TCRs that recognize neoantigens expressed within a patient’s cancer. Research conducted under the CRADA will be at the direction of Steven A. Rosenberg, M.D., Ph.D., Chief of the Surgery Branch at the NCI, in collaboration with the Company. 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 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 On August 24, 2004, the Company entered into a patent and technology license agreement with MD Anderson and the Texas A&M University System, which the Company refers to, collectively, as the Licensors. Under this agreement, the Company was granted an exclusive, worldwide license to rights (including rights to U.S. and foreign patent and patent applications and related improvements and know-how) for the manufacture and commercialization of two classes of organic arsenicals (water- and lipid-based) for human and animal use. The class of water-based organic arsenicals includes darinaparsin. 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 possi ble sublicense under certain circumstances. 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. On March 7, 2011, the Company entered into a License and Collaboration Agreement with Solasia Pharma K.K., or Solasia, which was amended on July 31, 2014 to include an exclusive worldwide license. Pursuant to the License and Collaboration Agreement, the Company granted Solasia an exclusive license to develop and commercialize darinaparsin in both intravenous and oral forms and related organic arsenic molecules, in all indications for human use. 19 As consideration for the license, the Company is eligible to receive from Solasia development- and sales-based milestones, a royalty on net sales of darinaparsin, once commercialized, and a percentage of any sublicense revenues generated by Solasia. 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. 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 On July 9, 2020, the Company entered into a master service agreement and statement of work with KBI Biopharma, a contract manufacturing organization serving the biotechnology industry, including cell therapy. Pursuant to the agreements, KBI will provide cGMP cell therapy manufacturing and testing for the Company’s library TCR-T cell clinical program. Collaboration with Aldevron On March 3, 2019, the Company entered into a master services agreement with Aldevron, a plasmid DNA manufacturer. On June 25, 2020, Aldevron announced an agreement for Aldevron to produce DNA plasmids under their neoGMP® service to be utilized in the manufacture of the Company’s TCR-T cell therapies for treatment of solid tumors. 9. Leases 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 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 $ 1,000 . This lease was terminated effective March 31, 2020. 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 $ 12,000 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 $ 37,000 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 September 30, For the Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Operating lease cost $ 352 $ 267 $ 1,113 $ 768 Total lease cost $ 352 $ 267 $ 1,113 $ 768 Weighted-average remaining lease term (years) 5.71 4.99 5.71 4.99 Weighted-average discount rate 8.00 % 8.00 % 8.00 % 8.00 % 20 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) $ 273 2022 1,102 2023 1,132 2024 1,166 2025 1,201 Thereafter 1,873 Total lease payments 6,747 Less: Imputed interest and adjustments ( 1,329 ) Present value of lease payments $ 5,418 10. Stock-Based Compensation The Company recognized stock-based compensation expense on all employee and non-employee awards as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Research and development 535 522 2,115 1,587 General and administrative 1,836 1,270 7,742 3,806 Stock-based compensation expense $ 2,371 $ 1,792 $ 9,857 $ 5,393 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. On April 5, 2021, the Company extended the contractual life of 751,371 stock options and accelerated the vesting of 226,889 shares of restricted stock held by a former officer of the Company. On April 29, 2021, the Company extended the contractual life of 10,417 vested and 167,023 unvested stock options and accelerated the vesting of 4,137 shares of restricted stock held by a former director. 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 $ 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, 2021 2020 2021 2020 Risk-free interest rate 0.89 - 0.96 % 0.36 - 0.39 % 0.50 - 1.15 % 0.36 - 1.68 % Expected life in years 6.00 - 6.25 5.75 - 6.25 5.50 - 6.25 5.75 - 6.25 Expected volatility 72.53 - 72.84 % 73.59 - 74.18 % 72.53 - 74.80 % 71.11 - 74.18 % Expected dividend yield — % — % — % — % 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. 21 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) Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Term (Years) Aggregate Intrinsic Value Outstanding, December 31, 2020 6,840,719 $ 3.81 Granted 7,150,438 2.97 Exercised ( 363,109 ) 2.86 Cancelled ( 2,555,154 ) 3.54 Outstanding, September 30, 2021 11,072,894 $ 3.36 8.32 $ 473 Options exercisable, September 30, 2021 5,743,820 $ 4.08 7.24 $ — Options exercisable, December 31, 2020 3,596,315 $ 4.17 6.90 $ 598 Options available for future grant 2,224,159 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 nine months ended September 30, 2021 is as follows: Number of Shares Weighted-Average Grant Date Fair Value Unvested, December 31, 2020 786,280 $ 3.08 Granted 1,601,224 2.60 Vested ( 466,436 ) 3.68 Cancelled ( 410,413 ) 3.46 Unvested, September 30, 2021 1,510,655 $ 2.28 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. At the Company’s annual meeting held on June 29, 2020, the shareholders approved the 2020 Equity Incentive Plan, or the 2020 Plan, which is a successor to and continuation of the 2012 Plan. The 2020 Plan had 21 million shares authorized, plus the shares remaining for issuance under the 2012 Plan. 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 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. 11. Warrants 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. The warrants have an exercise price of $ 3.01 per share and have a five-year term. The relative fair value of the warrants was estimated at $ 18.4 million using a Black-Scholes model with the following assumptions: expected volatility of 71 %, risk free interest rate of 2.99 %, expected life of five years and no dividends. The Company assessed whether the warrants require accounting as derivatives. The Company determined that the warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’ equity in accordance with Financial Accounting Standards Board, or (FASB) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging . As such, the Company has concluded the warrants meet the scope exception for determining whether the instruments require accounting as derivatives and should be classified in stockholders’ equity. On July 26, 2019 and September 12, 2019, the Company entered into agreements with existing investors for the exercise of previously issued warrants to purchase common stock in the private placement. Pursuant to the terms of the agreements, investors exercised their 2018 warrants for an aggregate of 17,803,031 shares of common stock, at an exercise price of $ 3.01 per share. Proceeds from the warrant exercise, after deducting placement agent fees and other related expenses of $ 1.1 million were approximately $ 52.5 million. 22 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 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. On October 22, 2019, the Company entered into the 2019 Agreement with MD Anderson. Refer to Note 8 – Commitments and Contingencies for further details. 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. The warrant has an initial exercise price of $ 0.001 per share and grant date fair value of $ 14.5 million. The warrant expires on December 31, 2026 and vests upon the occurrence of certain clinical milestones. 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 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. 12 . 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, 2021 Research and Development $ 2,248 General and Administrative 1,289 Total Severance Expense $ 3,537 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. 13. Joint Venture On December 18, 2018, the Company entered into a Framework Agreement with TriArm pursuant to which the parties agreed to launch Eden BioCell, to lead clinical development and commercialization of certain Sleeping Beauty- generated CAR-T therapies as set forth in a separate license agreement (see Note 7). On January 3, 2019, Eden BioCell was incorporated in Hong Kong as a private company. Eden BioCell, the Company and TriArm entered into a Share Subscription Agreement on January 23, 2019, where the Company and TriArm agreed to contribute certain intellectual property, services and cash (only with respect to TriArm) to Eden BioCell to subscribe for a certain number of newly issued ordinary shares in the share capital of Eden BioCell. On the closing date, upon the issuance and subscription of the shares, in respect of the aforementioned consideration, 10,000,000 ordinary shares were issued to the Company and 10,000,000 ordinary shares were issued to TriArm. The closing of the transaction occurred on July 5, 2019. The Framework Agreement and Share Subscription Agreements were each respectively amended to be effective as of this date. Upon consummation of the joint venture, Eden BioCell and the Company also entered into a license agreement, pursuant to which the Company licensed the rights to Eden BioCell for third-generation Sleeping Beauty -generated CAR-T therapies targeting the CD19 antigen for the territory of China (including Macau and Hong Kong), Taiwan and Korea. 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 23 $ 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. As of July 5, 2019, as a result of the design and purpose of Eden BioCell, the Company determined that Eden BioCell was considered a variable interest entity, or VIE, and concluded that it is not the primary beneficiary of the VIE as it did not have the power to direct the activities of the VIE that most significantly impact its performance. Rather, the Company accounts for the equity interest in Eden BioCell under the equity method of accounting as it has the ability to exercise significant influence over the operations of Eden BioCell. The Company determined that Eden BioCell was not a customer and therefore, accounted for the transaction as the transfer of nonfinancial assets to be recognized at their fair value on the contribution date. The fair value of the intellectual property contributed to Eden BioCell had a de minimis value due to the early stage of the technology and the likelihood of clinical success. 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 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. The lead investigator at National Taiwan University in Taipei, has reported no serious adverse safety events in either of these patients. Laboratory results continue to support, as previously published, that non-viral Sleeping Beauty gene transfer is effective in genetically modifying autologous T-cells. 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 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. 14. 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. 24 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following information should be read in conjunction with our unaudited condensed financial statements and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or the SEC, on March 1, 2021, or the Annual Report. Except for the historical information contained herein, the matters discussed in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as “may,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. Our actual results and the timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, including those risks identified under Part II, Item 1A. Risk Factors. We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. 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. Overview 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 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. The U.S. 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. The U.S. 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 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. 25 We have not generated significant revenue and have incurred significant net losses in each year since our inception. 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. Further development of our product candidates will likely require substantial increases in our expenses as we:  continue to undertake clinical trials for product candidates;  seek regulatory approvals for product candidates;  work with regulatory authorities to identify and address program-related inquiries;  implement additional internal systems and infrastructure;  hire additional personnel; and  scale-up the formulation and manufacturing of our product candidates. We continue to seek additional financial resources to fund the further development of our product candidates. If we are unable to obtain sufficient additional capital, one or more of these programs could be delayed, and we may be unable to continue our operations at planned levels and be forced to reduce our operations. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. 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. 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. Clinical, Manufacturing, Scientific, and Regulatory Developments In February 2021, the FDA cleared our company-sponsored IND application for a Phase 1/2 clinical trial evaluating TCRs from our library for the investigational treatment of lung, cholangiocarcinoma, pancreatic, colorectal and gynecological cancers. 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 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. 26 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. Laboratory results continue to support, as previously published, that non-viral Sleeping Beauty gene transfer is effective in genetically modifying autologous T-cells. 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 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 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. We will continue seeking a partner for this program and have also begun exploring potential synergies between this technology and our cell therapy programs. Financial Overview Overview of Results of Operations 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, 2021 2020 Change 2021 2020 Change ($ in thousands) Collaboration revenue $ 398 $ — $ 398 100 % $ 398 $ — $ 398 100 % 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 $0.4 million under our Collaboration Agreement. Research and development expenses. Research and development expenses during the three and nine months ended September 30, 2021 and 2020 were as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 Change 2021 2020 Change ($ in thousands) Research and development $ 14,521 $ 13,968 $ 553 4 % $ 41,427 $ 38,725 $ 2,702 7 % 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. 27 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. Our employee and infrastructure resources are allocated across several projects, and many of our costs are directed to broadly applicable research endeavors. As a result, we cannot state the costs incurred for each of our programs on a program-by-program basis related to personnel and personnel related costs. 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 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; a Phase 1/2 clinical trial of Ad-RTS-hIL-12 with veledimex for the treatment of pediatric brain tumors; and a Phase 2 clinical trial of Ad-RTS-hIL-12 with veledimex in combination with cemiplimab-rwlc in progressive glioblastoma. 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 (in mllions) September 30, 2021 September 30, 2021 Direct external expenses by program: TCR Library $ 4.7 $ 11.7 Ad-RTS-hIL-12 with veledimex in combination with cemiplimab-rwlc $ 1.1 $ 7.8 Ad-RTS-hIL-12 with veledimex for the treatment of pediatric brain tumors $ - $ 2.7 Ad-RTS-IL-12 plus veledimex in progressive glioblastoma $ 0.2 $ 14.8 CD19-specific CAR+ T cells in patients with advanced lymphoid malignancies $ - $ 6.2 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. We test potential products in numerous preclinical studies for safety, toxicology and efficacy. 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. 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. It is not unusual for preclinical and clinical development of each of these types of products to require the expenditure of substantial resources. We estimate that clinical trials of the type generally needed to secure new drug approval are typically completed over the following timelines: Clinical Phase Estimated Completion Period Phase 1 1 - 2 years Phase 2 2 - 3 years Phase 3 2 - 4 years The duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development, including, among others, the following:  The number of clinical sites included in the trials;  The length of time required to enroll suitable patents;  The number of patients that ultimately participate in the trials; 28  The length of time and cost to develop and optimize manufacturing processes;  The cost to manufacture the clinical products for patients;  The duration of patient follow-up to ensure the absence of long-term product-related adverse events; and  The efficacy and safety profile of the product. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our programs or when and to what extent we will receive cash inflows from the commercialization and sale of a product. Our inability to complete our programs in a timely manner or our failure to enter into appropriate collaborative agreements could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to reduce or eliminate our activities in one or more of our programs or seek additional, external sources of financing from time-to-time in order to continue with our product development strategy. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business. General and administrative expenses. General and administrative expenses 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, 2021 2020 Change 2021 2020 Change ($ in thousands) General and administrative $ 8,173 $ 6,353 $ 1,820 29 % $ 25,469 $ 18,862 $ 6,607 35 % 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 $1.1 million related to consulting service costs. Other income (expense), net. Other income, net for the three and nine months ended September 30, 2021 and 2020 was as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 Change 2021 2020 Change ($ in thousands) Interest expense, net $ (444 ) $ 7 $ (451 ) (6,443 )% $ (444 ) $ 412 $ (856 ) (208 )% Other expense, net 7 (1 ) 8 (800 )% (15 ) (29 ) 14 (48 )% Other income (expense), net $ (437 ) $ 6 $ (459 ) $ 383 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 Source of liquidity We have not generated any revenue from product sales. Since inception, we have incurred net losses and negative cash flows from our operations. 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 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. 29 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. Principal repayments will start on April 1, 2022, unless certain milestones are reached prior to that date. February 2020 Public Offering On February 5, 2020, we entered into an underwriting agreement with Jefferies LLC, or Jefferies, as representative of the several underwriters named therein, relating to the issuance and sale of 27,826,086 shares of our common stock. The price to the public in the offering was $3.25 per share, and the underwriters agreed to purchase the shares from us pursuant to the underwriting agreement at a purchase price of $3.055 per share. The offering was made pursuant to our effective registration statement on Form S-3ASR (File No. 333-232283) previously filed with the SEC, and a prospectus supplement thereunder. The net proceeds from the offering were approximately $84.8 million after deducting underwriting discounts and offering expenses paid by us. On March 10, 2020, the underwriters exercised their option to purchase an additional 1,284,025 shares. The net proceeds were approximately $3.9 million after deducting underwriting discounts and offering expenses paid by the us. At-the-Market Facility 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. 333-232283), as previously filed with the Securities and Exchange Commission. Subject to the terms of the sales agreement, we are able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. 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 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. 333-232283) previously filed with the SEC, and a prospectus supplement thereunder. 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 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 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. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate. Management does not know whether additional financing will be on terms favorable or acceptable to us when needed, if at all. In addition, we have issued or reserved for future issuance shares nearing the maximum number of shares of common stock authorized by our certificate of incorporation. If we are unable to increase the total number of authorized shares, we may be unable to effectively utilize our common stock to raise capital. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our products, management may need to curtail development efforts. The COVID-19 pandemic continues to rapidly evolve and has already resulted in a significant disruption of global financial markets. If the disruption persists and deepens, we could experience an inability to access additional capital when and if needed. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect our business prospects, or we may be unable to continue operations. In addition to these factors, our actual cash requirements may vary materially from our current expectations due to a number of other factors that may include, but are not limited to, changes in the focus and direction of our development programs, competitive and technical advances, costs associated with the development of our product candidates, our ability to secure partnering arrangements, and the costs of filing, prosecuting, defending and enforcing our intellectual property rights. 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. 30 Cash Flows 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, 2021 2020 Change ($ in thousands) Net cash provided by (used in): Operating activities $ (46,342 ) $ (39,977 ) $ (6,365 ) Investing activities (2,964 ) (6,012 ) 3,048 Financing activities 25,962 101,719 (75,757 ) Net increase (decrease) in cash and cash equivalents $ (23,344 ) $ 55,730 $ (79,074 ) Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. Operating activities is derived by adjusting our net loss for:  Non-cash operating items such as depreciation and stock-based compensation; and  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 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 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:  the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates;  changes in the focus, direction and pace of our development programs;  the effect of competitive and technical advances and market developments;  costs associated with the development of our product candidates;  our ability to establish and maintain partnering, collaborations or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement;  diversion of healthcare resources away from the conduct of clinical trials as a result of the ongoing COVID-19 pandemic, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; 31  the interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel, quarantines or social distancing protocols imposed or recommended by federal or state governments, employers and others in connection with the ongoing COVID-19 pandemic;  our need and ability to hire additional management and scientific and medical personnel;  the costs of acquiring, licensing or investing in businesses, product candidates and technologies;  costs of filing, prosecuting, defending and enforcing any patent claims and any other intellectual property rights, or other developments; and  other matters identified under Part II, Item 1A. “Risk Factors.” 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 $18.4 million in current liabilities. In May 2021, as a result of our review of our research and development portfolio, we announced the realigning of resources behind our Sleeping Beauty program. The Company announced that it will be winding down our existing Controlled IL-12 clinical program, and we anticipate the realignment of resources will reduce cash expenditures on the Controlled IL-12 program. On September 27, 2021, in order to lower our existing cost structure, we also announced a strategic reduction in force and notified approximately 60 full-time employees of our intention to terminate their employment services. Contractual Obligations The following table summarizes our outstanding obligations as of September 30, 2021 and the effect those obligations are expected to have on our liquidity and cash flows in future periods: ($ in thousands) Total Less than 1 year 2 -3 years 4 -5 years More than 5 years Operating leases $ 6,747 $ 1,097 $ 2,281 $ 2,391 $ 978 Royalty and license fees 3,277 350 700 450 1,777 Term loan 28,481 14,258 14,223 - - Total $ 38,505 $ 15,705 $ 17,204 $ 2,841 $ 2,755 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 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. On March 12, 2019, we entered into a lease agreement for additional office space in Houston through April 2021. On October 15, 2019, we entered into another lease agreement for additional office and lab space in Houston through February 2027. On April 13, 2020, we entered into another lease agreement for additional office and laboratory space in Houston through February 2027. On June 1, 2020, we entered into a short-term lease in Houston for office and laboratory space. On September 1, 2020, we entered an additional short-term lease in Houston for additional office and laboratory space. 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. 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. or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation. 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. 32 Off-balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. Critical Accounting Policies and Estimates In our Annual Report, our most critical accounting policies and estimates upon which our financial status depends were identified as those relating to clinical trial expenses; collaboration agreements; fair value measurements for stock-based compensation; and income taxes. We reviewed our policies and determined that those policies remain our most critical accounting policies for the nine months ended September 30, 2021.