1 unchanged sentence
Evaluation of Disclosure Controls and Procedures.
−Removed: Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of December 31, 2021.
+Added: Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer and our principal accounting officer, we have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of December 31, 2022.
Based on that evaluation, our principal executive officer and principal financial officer has concluded that as of December 31, 2022, our disclosure controls and procedures were effective as described below under “
Management’s Report on Internal Control over Financial Reporting .”
−Removed: Remediation of Material Weakness
−Removed: In connection with the review of our financial statements as of and for the quarter ended June 30, 2021, we identified a material weakness in our internal control over financial reporting.
−Removed: A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
−Removed: Our identified material weakness existing in our financial reporting process relates to the lack of sufficient accounting resources to execute certain controls related to the reconciliation and review of accounts in a timely manner.
−Removed: Following the identification of the material weakness in our internal controls over financial reporting as of June 30, 2021, we prepared a remediation action plan and implemented that plan to improve the controls related to the reconciliation and review of accounts in a timely manner.
−Removed: We enhanced and revised the design of related existing internal controls, implemented incremental controls over our financial statement close process and hired new accounting staff.
−Removed: During the fourth quarter of 2021, we successfully completed the testing necessary to conclude that the material weakness has been remediated.
−Removed: The material weakness had no impact on any amounts reported in the financial statement for the fiscal year ended December 31, 2021 or for any previous period.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
−Removed: Internal control over financial reporting is defined in Rules 13(a)-15(f) and 15(d)-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer, principal financial officer, and principal accounting officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
+Added: Internal control over financial reporting is defined in Rules 13(a)-15(f) and 15(d)-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and our principal accounting officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
1 unchanged sentence
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
−Removed: Under the supervision and with the participation of management, including our principal executive officer, principal financial officer, and principal accounting officer, we assessed our internal control over financial reporting as of December 31, 2021, based on criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: Under the supervision and with the participation of management, including our principal executive officer and principal financial officer and our principal accounting officer, we assessed our internal control over financial reporting as of December 31, 2022, based on criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our management’s assessment of the effectiveness of our internal control over financial reporting included testing and evaluating the design and operating effectiveness of our internal controls.
1 unchanged sentence
Inherent Limitations on Internal Controls
−Removed: Our management, including our principal executive officer, principal financial officer, and principal accounting officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud.
+Added: Our management, including our principal executive officer and principal financial officer, and our principal accounting officer, do not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
−Removed: These inherent limitations include the realities that judgements in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.
+Added: These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by individual acts of some persons, by collusion of two or more people, or by management override of the control.
−Removed: The design of any system of controls also is
−Removed: based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
+Added: The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
2 unchanged sentences
Changes in Internal Controls over Financial Reporting
−Removed: Other than the changes described above, there were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) of the Exchange Act) that occurred during the fiscal year ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) of the Exchange Act) that occurred during the fiscal year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Other Information
−Removed: Departure of Directors or Certain Officers;
−Removed: Election of Directors;
−Removed: Appointment of Certain Officers;
−Removed: Compensatory Arrangements of Certain Officers.
−Removed: On March 28, 2022, Dr.
−Removed: Baffa notified us of his decision to resign from his position as our Chief Medical Officer, effective March 31, 2022, in order to pursue other opportunities.
−Removed: In connection with Dr.
−Removed: Baffa’s resignation, we entered into a letter agreement, or the Baffa Separation Agreement, to govern the terms of his separation.
−Removed: Under the Baffa Separation Agreement, subject to its due execution, in exchange for a release of claims and certain post-employment covenants, Dr.
−Removed: Baffa is entitled to receive a $155,000 lump sum cash payment and we have waived our right to recover half of his $160,000 sign-on bonus which we would otherwise be entitled to since he is departing after the first anniversary but before the second anniversary of his employment start date.
−Removed: Regardless of whether or not Dr.
−Removed: Baffa executes the Baffa Separation Agreement, we will continue paying Dr.
−Removed: Baffa’s COBRA premiums for four months following the separation date.
−Removed: The Baffa Separation Agreement supersedes all prior agreements between the parties.
−Removed: In addition, the Baffa Separation Agreement includes confidentiality and intellectual property provisions which continue after Dr.
−Removed: Baffa’s departure.
−Removed: Baffa has seven business days following execution in which he may rescind his resignation and revoke the Baffa Separation Agreement.
−Removed: The Baffa Separation Agreement will become effective upon the expiration of the seven business day revocation period.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
−Removed: Current Directors, Director Nominees And Executive Officers
−Removed: Our Board of Directors
−Removed: Set forth below are the names and certain information about each of our directors as of March 15, 2022.
−Removed: The information presented includes each director’s age, principal occupation and business experience for the past five years and the names of other public companies of which he or she has served as a director during the past five years.
−Removed: In addition, the table contains information about the specific and particular experience, qualifications, attributes or skills of each current director and each nominee for director at the annual meeting that led the corporate governance and nominating committee to believe that such current director was appropriate for nomination at a previous annual meeting of stockholders and, in the case of each nominee for director at the annual meeting, that such nominee should serve on our board of directors following election at the annual meeting.
−Removed: Each of our directors serves for a one-year term until re-elected at our next annual meeting.
−Removed: Positions and Offices Held
−Removed: Christopher Bowden M.D.
−Removed: Chief Executive Officer and Director
−Removed: Executive Chair
−Removed: Christopher Bowden, M.D.
−Removed: Bowden, an oncology drug development executive with more than 20 years of leadership experience including the approval of several cancer medicines, has served as a member of our board of directors since October 2019.
−Removed: He was the Chief Medical Officer of Agios Pharmaceuticals from May 2014 to September 2021.
−Removed: Previously, Dr.
−Removed: Bowden was Vice President Product Development Oncology, at Genentech for eight years.
−Removed: From 2003 to 2006, he was the Executive Director for EMEA regions for Bristol-Myers Squibb.
−Removed: Bowden held positions of increasing responsibility in oncology clinical development, at Pharmacia Corporation and Janssen Pharmaceutical.
−Removed: Prior to industry, Dr.
−Removed: Bowden was on the oncology faculty at the University of Virginia Health Science Center.
−Removed: From September 2017 to October 2020, Dr.
−Removed: Bowden served as a member of the board of directors of miRagen Therapeutics, Inc., a publicly traded biopharmaceutical company discovering and developing proprietary RNA-targeted therapies with a specific focus on microRNAs.
−Removed: Bowden received his M.D.
−Removed: from Hahnemann University School of Medicine followed by internal medicine training at Roger Williams Medical Center and the Providence VA Medical Center, Rhode Island.
−Removed: He completed his medical oncology fellowship at the National Cancer Institute Medicine Branch.
−Removed: Bowden is board certified in internal medicine and medical oncology.
−Removed: Our board of directors believes that Dr.
−Removed: Bowden’s extensive background in drug development and leadership experience at several leading life science and pharmaceutical companies qualifies him to serve on the board of directors.
−Removed: Boyle, Sr., was appointed our Chief Executive Officer and a member of our board of directors in August 2021.
−Removed: Boyle has over 20 years of experience in leading businesses in competitive and transformative situations and has a strong track record of delivering shareholder value.
−Removed: He is also an accomplished capital markets professional with strong banking relationships cultivated by raising over $2.0 billion in equity and debt capital over his career.
−Removed: Prior to joining the Company, Mr.
−Removed: Boyle served in various roles at Kuur Therapeutics, Inc.
−Removed: (formerly known as Cell Medica Ltd.).
−Removed: Boyle first served as Kuur’s chief financial officer from February 2018 until January 2020.
−Removed: From January 2020 until May 2021, Mr.
−Removed: Boyle served as Kuur’s chief executive officer where he led the company through a successful transformation, culminating in a $185 million acquisition in May 2021 by Athenex, Inc.
−Removed: Following the acquisition, Athenex engaged Mr.
−Removed: Boyle as a consultant to assist in the integration of Kuur.
−Removed: Prior to joining Kuur, Mr.
−Removed: Boyle served as the chief financial officer of FloWorks International, LLC, Sigma3 Integrated Reservoir Solutions, Recover Care, and SPT Inc.
−Removed: Boyle graduated with a B.S.
−Removed: from Carnegie Mellon University and a J.D.
−Removed: from the University of Pennsylvania Carey Law School.
−Removed: Our board of directors believes that Mr.
−Removed: Boyle’s prior experience as a chief executive officer in the life sciences industry and significant fundraising experience qualifies him to serve on the board of directors.
−Removed: Huang has served as a member of our board of directors since July 2020, our Chair from January 2021 until February 2021, and our Executive Chair since February 2021.
−Removed: Huang joined Kleiner Perkins Caufield & Byers China, or KPCB China, as a managing partner in 2011 and focuses on the firm’s life sciences practice.
−Removed: Prior to joining KPCB China, Mr.
−Removed: Huang was a managing partner at Vivo Ventures, a venture capital firm specializing in life sciences investments.
−Removed: Before joining Vivo in 2007, Mr.
−Removed: Huang was president of Anesiva, a biopharmaceutical company focused on pain-management treatments.
−Removed: During his 20-year career in the pharmaceutical and biotech industry, he also held senior roles in business development, sales, marketing and R&D with Tularik Inc.
−Removed: (acquired by Amgen), GlaxoSmithKline LLC, Bristol-Myers Squibb and ALZA Corp.
−Removed: (acquired by Johnson & Johnson).
−Removed: Huang is also founding and managing partner of Panacea Venture, a global venture fund focusing on investments in innovative and transformative early and growth stage healthcare and life science companies.
−Removed: Huang is Chairman of the board at Kindstar Global (Beijing) Technology, Inc., Windtree Therapeutics, Inc., JHL Biotech, Inc., Tactiva Therapeutics, LLC, and Chime Biologics Limited and Director at CASI Pharmaceuticals Inc.
−Removed: and XW Laboratories Inc.
−Removed: Huang received an M.B.A.
−Removed: from the Stanford Graduate School of Business and a B.S.
−Removed: degree in chemical engineering from the University of California, Berkeley.
−Removed: Our board of directors believes that Mr.
−Removed: Huang’s extensive experience in life science investments and serving on the boards of directors of a number of life sciences and pharmaceutical companies qualifies him to serve on the board of directors.
−Removed: Postma has served as a member of our board of directors since February 2021.
−Removed: Postma has also served as the president of WaterMill Asset Management Corp.
−Removed: (“WaterMill”), a company which he founded in July 1999.
−Removed: WaterMill actively trades in municipal bonds and equities, using the funds of Mr.
−Removed: Postma has over 44 years of trading experience and received a B.A.
−Removed: in Business and Economics from Lafayette College.
−Removed: Our board of directors believes that Mr.
−Removed: Postma’s management and trading experience allows Mr.
−Removed: Postma to provide financial guidance to us and qualifies him to serve on the board of directors.
−Removed: Thistle has served as a member of our board of directors since November 2020.
−Removed: Thistle has served as Special Advisor to the Bill & Melinda Gates Medical Research Institute, a non-profit biotech organization, since October 2020, and was its Chief of Staff from January 2018 until October 2020.
−Removed: Prior to then, she held senior leadership positions at Dimension Therapeutics, Inc., a gene therapy company, including serving as its Chief Operating Officer from 2016 to 2017 and Chief Business Officer from 2015 to 2016.
−Removed: Prior to joining Dimension Therapeutics, Inc., she spent six years at Cubist Pharmaceuticals, Inc., a biopharmaceutical company, where she held various leadership positions, including serving as its Senior Vice President, Business Development from 2014 to 2015, Vice President, Business Development from 2012 to 2013 and Senior Director, Business Development from 2009 to 2012.
−Removed: Prior to then, she held various positions at ViaCell, Inc.
−Removed: and PerkinElmer Inc.
−Removed: Thistle serves as a member of the boards of directors of Homology Medicines, Inc.
−Removed: FIXX), Entrada Therapeutics, Inc.
−Removed: TRDA) and the board of directors of private companies, Enterome SA and Cocoon Biotech Inc.
−Removed: Thistle holds a B.S.
−Removed: in Accounting from the University of Massachusetts, Boston.
−Removed: Our board of directors believes that Ms.
−Removed: Thistle’s perspective, financial expertise, business development and leadership experience at several biopharmaceutical companies provides her with the qualifications and skills to serve on the board of directors.
−Removed: Vieser has served as a member of our board of directors since December 2020.
−Removed: Vieser currently manages Brushwood LLC, a private investment firm.
−Removed: From 2010-2017, he was a Managing Partner and co-principal of Castle Hill Asset Management LLC, a $2.7 billion asset manager and hedge fund focusing on high yield and distressed debt.
−Removed: Prior to founding Castle Hill, Mr.
−Removed: Vieser was responsible for Deutsche Bank’s High Yield Sales and Trading Group in London from 1998 to 2008.
−Removed: Vieser originally joined Bankers Trust in New York in 1994 and worked in the Investment Banking/Leveraged Finance division.
−Removed: Vieser graduated from the University of Michigan with a degree in Economics and from the Cox School of Business at Southern Methodist University with a Master’s in Business Administration.
−Removed: Our board of directors believes that Mr.
−Removed: Vieser’s financial expertise and investment experience allows Mr.
−Removed: Vieser to provide business to us and qualifies him to serve on the board of directors.
−Removed: Weis has served as a member of our board of directors since December 2020.
−Removed: Weis continues to serve as the principal of Weis Advisors, Inc., a company that provides consulting services to life science companies, since founding the company in April 2018.
−Removed: Prior to that, he served in a number of roles at DemeRx, Inc., a clinical stage pharmaceutical company developing non-addictive treatments for drug addiction, including serving as Chief Operating Officer and Chief Financial Officer from December 2011 to July 2017, and also as President from September 2014 to July 2017, and as a Consultant from July 2017 to April 2018.
−Removed: Earlier in his career, Mr.
−Removed: Weis served as the Chief Financial Officer of EnSA Holdings, LLC, a company that focuses on environmentally sustainable agriculture techniques and technologies for the production of rice, from August 2010 to November 2011.
−Removed: From 2006 to 2010, he served as the Vice President & Chief Financial Officer, Secretary and Treasurer of NovaVision, Inc., a therapeutic and diagnostic vision restoration company.
−Removed: Prior to that, he served as the Chief Financial Officer & Treasurer of GMP Companies, Inc., a company that develops and commercializes pharmaceutical, medical device and diagnostic technologies, from 2000 to 2005.
−Removed: Weis served as a Senior Manager at Ernst & Young, a multinational professional services company, from 1986 to 2000.
−Removed: Weis has co-authored a number of scientific papers and presentations and is an inventor on a number of patents and patent applications.
−Removed: Weis also serves on the board of directors of Jupiter NeuroSciences, Inc.
−Removed: Weis received a Bachelor of Business Administration in Accounting from the University of Georgia and is a Certified Public Accountant.
−Removed: Our board of directors believes that Mr.
−Removed: Weis’s management and industry experience, as well as his financial expertise, qualify him to serve on the board of directors.
−Removed: Agreement to Appoint a Director
−Removed: Vieser and Mr.
−Removed: Weis were all nominated for election as directors at our last annual meeting pursuant to a certain settlement agreement we entered into with WaterMill and Mr.
−Removed: See Item 13 “
−Removed: Certain Relationships and Related Transactions, and Director Independence—Certain Related-Party Transaction—WaterMill Settlement Agreement ”
−Removed: for more information.
−Removed: Our Executive Officers
−Removed: The following table sets forth certain information concerning our executive officers as of March 15, 2021.
−Removed: Chief Executive Officer and Director
−Removed: Vice President, Finance
−Removed: Raffaele Baffa, M.D., Ph.D.
−Removed: Chief Medical Officer
−Removed: Eleanor de Groot, Ph.D.
−Removed: Executive Vice President, Operations
−Removed: Melinda Lackey
−Removed: Senior Vice President, Legal
−Removed: Chief Executive Officer and Director
−Removed: Boyle’s biography is included above under the section titled “Our Board of Directors.”
−Removed: Vice President, Finance
−Removed: Michael Wong was appointed to be our Vice President, Finance in September 2021.
−Removed: Wong has more than 17 years of experience leading teams and has had numerous management roles on complex finance projects.
−Removed: Previously, from February 2019 to September 2021, Mr.
−Removed: Wong was Director, Technical Accounting at McDermott International, Ltd., where he also served as Interim Head, Audit Services.
−Removed: Prior to joining McDermott, Mr.
−Removed: Wong was an Audit Senior Manager at Ernst & Young LLP.
−Removed: Wong was most recently based in Houston, but also spent 14 years, from 2005 to 2019, with Ernst & Young in both the London, U.K.
−Removed: and Toronto, Canada offices.
−Removed: Wong is a licensed CPA in Texas and Canada and has a Bachelor of Commerce from Queen’s University, Canada.
−Removed: Raffaele Baffa, M.D., Ph.D.
−Removed: Chief Medical Officer
−Removed: Baffa has served as our Chief Medical Officer since November 2020.
−Removed: Prior to joining us, Dr.
−Removed: Baffa served as the chief medical officer of Medisix Therapeutics, an immune engineering company developing novel cellular therapies to address T cell malignancies, from March 2020 to November 2020.
−Removed: From September 2018 until March 2020, Dr.
−Removed: Baffa served as the chief medical officer of Servier Pharmaceuticals.
−Removed: Prior to that, Dr.
−Removed: Baffa was Vice President and Therapeutic Area Head of Oncology, Global Clinical Development for Shire from February 2018 to September 2018 before its acquisition by Servier.
−Removed: Baffa has also held industry leadership positions as Executive Director, Early Oncology Development and Clinical Research at Pfizer from May 2015 to February 2018 and at Sanofi, where he was Head of Translational Sciences –
−Removed: External Science & Innovation, Global Biotherapeutics from November 2013 to May 2015 and Senior Director –
−Removed: Translational and Experimental Medicine, Early Development, Oncology from November 2010 to October 2013.
−Removed: Baffa earned an M.D.
−Removed: from University of Padova, School of Medicine, and a Ph.D.
−Removed: from University of Parma, both in Italy.
−Removed: As an associate professor at the Kimmel Cancer Center, Thomas Jefferson University in Philadelphia, he also served as Director of Urology Research and as Co-Director of the Genito-Urinary Cancer Program.
−Removed: Baffa has authored more than 100 peer-reviewed articles, invited articles and book chapters.
−Removed: Eleanor de Groot, Ph.D.
−Removed: Executive Vice President, Operations
−Removed: de Groot has served as our Executive Vice President, Operations since September 2021.
−Removed: She previously served as our Executive Vice President, GM Cell Therapy beginning in January 2019 and oversaw our TCR-T cell therapy platform, including the collaboration with MD Anderson.
−Removed: She initially joined us in July 2015 as our Senior Vice President, Program Management and Business Development.
−Removed: Prior to joining us, Dr.
−Removed: de Groot was Vice President of Technical Operations and Project Planning and Management at Helsinn Therapeutics US, Inc.
−Removed: While at Helsinn and its predecessor companies, Sapphire Therapeutics and Rejuvenon Corporation, Dr.
−Removed: de Groot held multiple roles of increasing responsibility, leading technical operations, in particular chemistry, manufacturing, and controls development for its drug candidates from preclinical through Phase III, from April 2002 to July 2015.
−Removed: Prior to Helsinn, Dr.
−Removed: de Groot was a staff engineer at Guilford Pharmaceuticals (now Eisai) and a process engineer at Shell Chemical Company.
−Removed: She earned Ph.D.
−Removed: degrees in chemical engineering from Stanford University in 1995 and 1991, respectively, and a B.S.
−Removed: in chemical engineering from Massachusetts Institute of Technology in 1990.
−Removed: de Groot received an M.B.A.
−Removed: degree from Rice University in 2014.
−Removed: Melinda Lackey,
−Removed: Senior Vice President, Legal
−Removed: Lackey joined as our Senior Vice President, Legal in November 2021.
−Removed: She previously served as Counsel for Hogan Lovells from August 2021 until November 2021, where she supported life sciences companies at all stages with a focus on licensing and intellectual property.
−Removed: Lackey previously served as legal counsel Kuur Therapeutics, Inc.
−Removed: (and after its acquisition by Athenex, Inc., Athenex) from June 2018 until August 2021.
−Removed: Before industry, Ms.
−Removed: Lackey practiced law for 10 years focusing on intellectual property strategy and patent litigation from March 2008 until June 2018.
−Removed: Lackey has a J.D.
−Removed: from University of Houston Law Center (2007) and graduated from Texas Tech Health Sciences Center with an M.S.
−Removed: in medical microbiology and immunology (2003), focusing on molecular biology and immunology and a B.S.
−Removed: in Microbiology from Texas Tech University (1998).
−Removed: There are no family relationships among any of our directors, director nominees or executive officers.
−Removed: None of our executive officers is related by blood, marriage or adoption to any of our directors, director nominees or executive officers.
−Removed: Delinquent Section 16(A) Reports
−Removed: Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of beneficial ownership and reports of changes in beneficial ownership in our securities.
−Removed: Based solely on a review of such reports filed electronically with the SEC, we believe that during 2021, all Section 16(a) filings applicable to our directors, officers, and 10% stockholders were filed on a timely basis, except as described in this section.
−Removed: One Form 3 that was filed by Michael Wong in connection with his appointment as an officer of our Company was not filed on a timely basis.
−Removed: One Form 3 that was filed by Raffaele Baffa in connection with his appointment as an officer of our Company was not filed on a timely basis.
−Removed: Due to an administrative oversight, a Form 4 reporting grants of restricted stock and options to purchase our common stock awarded to Christopher Bowden, James Huang, Robert W.
−Removed: Postma, Mary Thistle, Jaime Vieser, Holger Weis and Kevin Buchi on March 4, 2021, were not filed until May 6, 2021.
−Removed: Code of Ethics and Business Conduct
−Removed: Our board of directors has adopted a Code of Ethics and Business Conduct which is applicable to all officers, directors and employees.
−Removed: The Code of Ethics and Business Conduct is intended to be designed to deter wrongdoing and promote honest and ethical behavior, full, fair, timely, accurate and understandable disclosure, compliance with applicable laws, rules and regulations, and prompt internal reporting of violations of this code.
−Removed: In addition to provisions that are applicable to officers, directors and employees generally, the Code of Ethics and Business Conduct contains provisions that are specifically applicable to our principal executive officer, principal financial officer and other senior financial officer(s).
−Removed: The Code of Ethics and Business Conduct is available on our website at www.alaunos.com and a copy may be obtained without charge upon written request to our legal department at our principal executive offices at 8030 El Rio Street, Houston, Texas 77054.
−Removed: Our website and its contents are not incorporated into this annual report.
−Removed: Audit Committee
−Removed: We have a separately designated standing audit committee.
−Removed: The current members of the committee are Mary Thistle, Jaime Vieser and Holger Weis.
−Removed: Each member of the audit committee is an “independent director,”
−Removed: as such term is defined in Nasdaq Rule 5605(a)(2) and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act.
−Removed: The board of directors has also determined that each of the audit committee members is able to read and understand fundamental financial statements and that at least one member of the audit committee has past employment experience in finance or accounting.
−Removed: The board of directors has determined that at least one member of the audit committee, Holger Weis, is an “audit committee financial expert,”
−Removed: as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Exchange Act.
+Added: The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Executive Compensation
−Removed: Executive Compensation Table
−Removed: Summary Compensation Table
−Removed: The following table sets forth information regarding compensation awarded to or earned by our named executive officers.
−Removed: Name of Principal Position
−Removed: Awards ($)(1)
−Removed: Awards ($)(1)
−Removed: Chief Executive Officer
−Removed: Heidi Hagen (4)
−Removed: Former Interim Chief Executive Officer
−Removed: Laurence James Neil Cooper (7)
−Removed: Former Chief Executive Officer
−Removed: Jill Buck (11)
−Removed: Former EVP, GM Gene Therapy
−Removed: Eleanor de Groot (15)
−Removed: EVP, Operations
−Removed: Raffaele Baffa
−Removed: Chief Medical Officer
−Removed: (1) These amounts have been calculated in accordance with ASC Topic 718.
−Removed: Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.
−Removed: For a discussion of the assumptions relating to our valuations of these restricted stock awards and stock options, please see Note 3 to the financial statements included in this Annual Report on Form 10-K.
−Removed: These amounts reflect our accounting expense for these restricted stock awards and stock options and do not correspond to the actual value that may be recognized by our named executive officer.
−Removed: Boyle joined as our Chief Executive Officer in August 2021.
−Removed: (3) Represents the dollar value of group term life insurance premiums we paid for the benefit of Mr.
−Removed: Boyle during 2021.
−Removed: We did not contribute to Mr.
−Removed: Boyle’s 401(k) plan account pursuant to our matching program in 2021.
−Removed: Hagen resigned as our interim Chief Executive Officer in August 2021.
−Removed: (5) $19,447 represents the amount we paid Ms.
−Removed: Hagen for her services as a member of our board of directors in 2021, and the remaining amount represents $287,500 in salary while serving as interim Chief Executive Officer.
−Removed: (6) Of such amount, (i) $448 represents the dollar value of group term life insurance premiums we paid for the benefit of Ms.
−Removed: Hagen during 2021 and (ii) $20,359 represents accrued vacation paid at departure.
−Removed: We did not contribute to Ms.
−Removed: Hagen’s 401(k) plan account pursuant to our matching program in 2021.
−Removed: Cooper resigned as our Chief Executive Officer, effective February 25, 2021 and left his position as a scientific advisor employee on April 9, 2021, at which time he became a consultant to us.
−Removed: (8) Of such amount, (i) $774 represents the dollar value of group term life insurance premiums we paid for the benefit of Dr.
−Removed: Cooper during 2021, (ii) $11,600 represents the amount we contributed to Dr.
−Removed: Cooper’s 401(k) plan account pursuant to our matching program, (iii) $44,625 represents accrued vacation paid at departure, (iv) $859,500 represents how much we paid Dr.
−Removed: Cooper in severance related to his resignation from his position as Chief Executive Officer and (v) $26,204 represents taxable perquisites for housing expenses, and (vi) $286,500 represents consulting fees paid to Dr.
−Removed: Cooper during 2021.
−Removed: (9) Represents a fully vested restricted stock award with a grant value of $917,000 awarded to Dr.
−Removed: Cooper in connection with his separation.
−Removed: See the section titled “
−Removed: Narrative to the Summary Compensation Table—
−Removed: Employment and Change in Control Agreements—
−Removed: Separation Agreement and Consulting Agreement with Laurence James Neil Cooper, M.D., Ph.D.”
−Removed: for additional information.
−Removed: (10) Of such amount, (i) $1,548 represents the dollar value of group term life insurance premiums we paid for the benefit of Dr.
−Removed: Cooper during 2020, (ii) $78,462 represents taxable perquisites, including $77,848 for housing expenses and $614 for commuting expenses and (iii) $11,200 represents the amount we contributed to Dr.
−Removed: Cooper’s 401(k) plan account pursuant to our matching program.
−Removed: Buck ceased being our Executive Vice President, GM Gene Therapy, effective September 15, 2021.
−Removed: Buck was paid $375,000 pursuant to her November 23, 2020 retention agreement under which she was paid the first two tranches which equaled 75% of her annual base compensation.
−Removed: (13) Of such amount, (i) $383 represents the dollar value of group term life insurance premiums we paid for the benefit of Ms.
−Removed: Buck during 2021, (ii) $11,600 represents the amount we contributed to Ms.
−Removed: Buck’s 401(k) plan account pursuant to our matching program, (iii) $26,891 represents accrued vacation paid at departure and (iv) $385,000 represents how much we paid Ms.
−Removed: Buck in severance related to her resignation from her position as Executive Vice President, GM Gene Therapy.
−Removed: (14) Of such amount, (i) $540 represents the dollar value of group term life insurance premiums we paid for the benefit of Ms.
−Removed: Buck during 2020, (ii) $11,400 represents the amount we contributed to Ms.
−Removed: Buck’s 401(k) plan account pursuant to our matching program, and (iii) $375 represents the amount paid for Ms.
−Removed: Buck’s consulting services.
−Removed: de Groot was promoted from Executive Vice President, GM Cell Therapy, to Executive Vice President, Operations, effective August 30, 2021.
−Removed: (16) Of such amount, Dr.
−Removed: de Groot was paid $375,000 pursuant to her November 23, 2020 retention agreement under which she was paid the first two tranches which equaled 75% of her annual base compensation.
−Removed: (17) Of such amount, (i) $828 represents the dollar value of group term life insurance premiums we paid for the benefit of Dr.
−Removed: de Groot during 2021 and (ii) $11,600 represents the amount we contributed to Dr.
−Removed: de Groot’s 401(k) plan account pursuant to our matching program.
−Removed: (18) Of such amount, (i) $828 represents the dollar value of group term life insurance premiums we paid for the benefit of Dr.
−Removed: de Groot during 2020 and (ii) $11,200 represents the amount we contributed to Dr.
−Removed: de Groot’s 401(k) plan account pursuant to our matching program.
−Removed: (19) Of such amount, Dr.
−Removed: Baffa was paid $175,000 pursuant to his November 23, 2020 retention agreement under which he was paid the first two tranches which equaled 75% of his annual base compensation.
−Removed: (20) Of such amount, (i) $2,376 represents the dollar value of group term life insurance premiums we paid for the benefit of Dr.
−Removed: Baffa during 2021 and (ii) $11,600 represents the amount we contributed to Dr.
−Removed: Baffa’s 401(k) plan account pursuant to our matching program.
−Removed: (21) Of such amount, (i) $297 represents the dollar value of group term life insurance premiums we paid for the benefit of Dr.
−Removed: Baffa during 2020 and (ii) $4,775 represents the amount we contributed to Dr.
−Removed: Baffa’s 401(k) plan account pursuant to our matching program.
−Removed: Narrative to Summary Compensation Table
−Removed: We use base salaries to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our named executive officers.
−Removed: Base salaries are reviewed annually, typically in connection with our annual performance review process, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience.
−Removed: Formal bonus plan goals were not set for 2021 because our CEO was not hired until August 2021.
−Removed: 2021 bonuses were paid out between 69% and 100% of target based on the Committee’s assessment of performance.
−Removed: Our employment arrangements with our named executive officers provide that the executive may be eligible to earn an annual performance bonus of up to a target percentage of the executive’s base salary, as described further below under the section titled “Employment and Change in Control Agreements.”
−Removed: Boyle was granted an option to purchase 2,625,000 shares of our common stock, which option has an exercise price of $1.64 per share, and 875,000 shares of restricted common stock in connection with his appointment as our Chief Executive Officer.
−Removed: The new hire award was intended as an inducement for Mr.
−Removed: Boyle to join the Company.
−Removed: Executive Retention
−Removed: In the fourth quarter of 2020, our board of directors, following the recommendation of the compensation committee, granted certain of our named executive officers, including Drs.
−Removed: Baffa and de Groot and Ms.
−Removed: Buck, each a cash retention award, a portion of which was contingent upon achievement of certain patient dosing milestones in our TCR-T program.
−Removed: de Groot and Ms.
−Removed: Buck were each provided an award for $500,000, with 40% of the award payable if such individual remains employed with us on April 1, 2021, 35% of the retention award payable if such individual remains employed with us on September 1, 2021, and 25% of the retention award payable if such individual remains employed with us on December 1, 2021.
−Removed: Baffa was provided an award for $250,000, with 40% of the award payable if Dr.
−Removed: Baffa remains employed with us on April 1, 2021, 30% of the award payable if Dr.
−Removed: Baffa remains employed with us on September 1, 2021, and 30% of the award payable if Dr.
−Removed: Baffa remains employed with us on December 1, 2021.
−Removed: The final payment of the awards for each of Drs.
−Removed: Baffa and de Groot was contingent upon achievement of certain patient dosing milestones in our TCR-T program which were not achieved and therefore not paid.
−Removed: de Groot and Ms.
−Removed: Buck each received an amount equal to $375,000 and Dr.
−Removed: Baffa received $175,000.
−Removed: Buck was not employed with us on December 1, 2021 and so was not paid the third tranche of the retention award program.
−Removed: Employment and Change in Control Agreements
−Removed: We have the following employment agreements in place with our named executive officers.
−Removed: Employment Agreement with Kevin S.
−Removed: Boyle has served as our Chief Executive Officer since August 2021 pursuant to an employment agreement entered into in August 2021.
−Removed: Boyle has an at-will employment relationship with us.
−Removed: Boyle’s annual base salary in 2021 was $600,000, pro-rated based on the number of days worked.
−Removed: Under his employment agreement, Mr.
−Removed: Boyle’s annual base salary is subject to review by the board of directors or the compensation committee at least annually.
−Removed: Annual Performance Bonus;
−Removed: Sign-on Bonus.
−Removed: Under his employment agreement, Mr.
−Removed: Boyle is eligible to receive an annual bonus based on his performance as determined by the board of directors or the compensation committee.
−Removed: The target amount of the annual performance bonus is 60% of his base salary, with the actual amount to be received determined by the board of directors or the compensation committee.
−Removed: Boyle also received a one-time sign-on bonus of $50,000, referred to as the Boyle Signing Bonus;
−Removed: provided that, in the event that his employment is terminated for cause or he resigns without good reason (as defined in the employment agreement) on or prior to August 30, 2022, Mr.
−Removed: Boyle shall be required to repay the Boyle Signing Bonus in full, subject to certain deductions and withholding obligations.
−Removed: Equity Incentive Grants.
−Removed: In connection with his appointment as our Chief Executive Officer and pursuant to his employment agreement, effective as of August 24, 2021, the board of directors granted to Mr.
−Removed: Boyle an option to purchase 2,625,000 shares of our common stock, which option has an exercise price of $1.64 per share and the Company issued Mr.
−Removed: Boyle 875,000 shares of restricted common stock.
−Removed: Boyle is also eligible to receive equity awards as determined by the board of directors in its sole discretion.
−Removed: Severance Provisions.
−Removed: If (i) we terminate Mr.
−Removed: Boyle for a reason other than death, disability or “Cause”
−Removed: (as that term is defined in his employment agreement), or (ii) Mr.
−Removed: Boyle resigns for “Good Reason”
−Removed: (as that term is defined in his employment agreement), Mr.
−Removed: Boyle will be entitled to receive a severance payment equal to the sum of (x) his then-current base salary and (y) the target amount of his annual performance bonus for the calendar year in which such termination occurs, which is hereinafter referred to as the Boyle Severance Payment Amount, payment of a one-time severance bonus in an amount equal to a pro-rata portion of the target amount of his annual performance bonus for the calendar year in which such termination occurs, plus payment of our portion of the contributions for medical and dental insurance coverage for twelve months, subject to Mr.
−Removed: Boyle’s execution and delivery of a general release in favor of the Company.
−Removed: Boyle will also receive accelerated vesting of his equity incentive awards through, with respect to time-based equity incentive awards, the next twelve-month period immediately following the effective date of his termination and, with respect to performance-based equity incentive awards, the next applicable performance period immediately following the effective date of his termination.
−Removed: The accelerated time-based equity awards will be deemed fully exercisable or non-forfeitable, as applicable, as of the later of the termination date or the effective date of the separation agreement.
−Removed: Any vested equity incentive awards held by Mr.
−Removed: Boyle shall remain exercisable until the earlier of (x) the date that is three years following the termination of his employment and (y) the expiration of the applicable term of the award.
−Removed: In the case of either (i) a termination by us for a reason other than death, disability or “Cause,”
−Removed: or (ii) a resignation for “Good Reason,”
−Removed: in each case that occurs within 90 days prior to and in connection with a “Change of Control”
−Removed: (as that term is defined in his employment agreement), or within 18 months after the occurrence of a “Change of Control,”
−Removed: Boyle will be entitled to receive a lump sum payment in an amount equal to the product of the Boyle Severance Payment Amount multiplied by two, payment of a one-time severance bonus in an amount equal to a pro-rata portion of the target amount of his annual performance bonus for the calendar year in which such termination occurs, payment of the Company’s portion of the contributions for health insurance coverage for eighteen months.
−Removed: In addition, all unvested time-based stock options and unvested awards of restricted stock held by Mr.
−Removed: Boyle will be accelerated and deemed to have vested as of the later of the termination date and the effective date of the separation.
−Removed: In addition, all performance-based equity awards will vest as if the applicable target performance goals were achieved as of the later of (x) the termination date and (y) the effective date of the separation.
−Removed: Additionally, all outstanding equity awards held by Mr.
−Removed: Boyle will remain exercisable until the earlier of (v) the date that is three years following the termination of employment and (w) the expiration of the applicable option term.
−Removed: Non-competition and Non-solicitation.
−Removed: Boyle has entered into an invention, non-disclosure and non-competition agreement, which provides that he will not compete with us or solicit our clients or customers for a year after the termination or cessation of his employment with us, and further provides that he will not solicit our employees for one year after the termination or cessation of his employment with us.
−Removed: Employment Agreement with Eleanor de Groot, Ph.D.
−Removed: de Groot has served as our Executive Vice President, Cell Therapy since January 1, 2019, and previously as our SVP, Program Management & Business Development from July 13, 2015 to December 31, 2018.
−Removed: In April 2019, we entered into an employment agreement with Dr.
−Removed: de Groot, which was amended in November 2020.
−Removed: de Groot has an at-will employment relationship with us.
−Removed: de Groot received a base salary of $385,000.
−Removed: Under her employment agreement, Dr.
−Removed: de Groot’s annual base salary is subject to review by the board of directors or the compensation committee at least annually.
−Removed: Annual Performance Bonus.
−Removed: Under her employment agreement, Dr.de Groot is eligible to receive an annual bonus based on her performance as determined by the board of directors or the compensation committee.
−Removed: The target amount of the annual performance bonus is 40% of her base salary, with the actual amount to be received determined by the board of directors or the compensation committee.
−Removed: Equity Incentive Grants.
−Removed: de Groot is eligible to receive equity awards as determined by the board of directors in its sole discretion from time to time.
−Removed: Severance Provisions.
−Removed: If (i) we terminate Dr.
−Removed: de Groot for a reason other than death, disability or “Cause”
−Removed: (as that term is defined in her employment agreement), or (ii) Dr.
−Removed: de Groot resigns for “Good Reason”
−Removed: (as that term is defined in her employment agreement), Dr.
−Removed: de Groot will be entitled to receive a severance payment equal to twelve months of her then-current base salary, plus payment of our portion of the contributions for medical and dental insurance coverage for twelve months, subject to Dr.
−Removed: de Groot’s execution and delivery of a general release in favor of the Company.
−Removed: In the case of either (i) a termination by us for a reason other than death, disability or “Cause,”
−Removed: or (ii) a resignation for “Good Reason,”
−Removed: in each case that occurs within 90 days prior to and in connection with a “Change in Control”
−Removed: (as that term is defined in her employment agreement), or within 18 months after the occurrence of a “Change in Control,”
−Removed: the, in addition to the foregoing severance provisions, all unvested stock options and unvested awards of restricted stock held by Dr.
−Removed: de Groot at the time that such termination
−Removed: occurs will be accelerated and deemed to have vested as of her employment termination date, and Dr.
−Removed: de Groot will be entitled to full target amount of her annual performance bonus for the calendar year in which such termination occurs.
−Removed: Non-competition and Non-solicitation.
−Removed: de Groot has entered into an invention, non-disclosure and non-competition agreement, which provides that she will not compete with us or solicit our clients or customers for a year after the termination or cessation of her employment with us, and further provides that she will not solicit our employees for one year after the termination or cessation of her employment with us .
−Removed: Employment Agreement with Raffaele Baffa, M.D., Ph.D.
−Removed: Baffa has served as our Chief Medical Officer since November of 2020 pursuant to an employment agreement Baffa entered into in September 2020, which we subsequently amended in November 2020.
−Removed: Baffa has an at-will employment relationship with us.
−Removed: Baffa’s annual base salary in 2021 was $465,000.
−Removed: Under his employment agreement, Dr.
−Removed: Baffa’s annual base salary is subject to review by the board of directors or the compensation committee at least annually.
−Removed: Annual Performance Bonus.
−Removed: Under his employment agreement, Dr.
−Removed: Baffa is eligible to receive an annual bonus based on his performance as determined by the board of directors or the compensation committee.
−Removed: The target amount of the annual performance bonus is 40% of his base salary, with the actual amount to be received determined by the board of directors or the compensation committee.
−Removed: Equity Incentive Grants.
−Removed: Baffa is also eligible to receive equity awards as determined by the board of directors in its sole discretion from time to time.
−Removed: Severance Provisions.
−Removed: If (i) we terminate Dr.
−Removed: Baffa for a reason other than death, disability or “Cause”
−Removed: (as that term is defined in his employment agreement), or (ii) Dr.
−Removed: Baffa resigns for “Good Reason”
−Removed: (as that term is defined in his employment agreement), Dr.
−Removed: Baffa will be entitled to receive a severance payment equal to twelve months of his then-current base salary, plus payment of our portion of the contributions for medical and dental insurance coverage for twelve months, subject to Dr.
−Removed: Baffa’s execution and delivery of a general release in favor of the Company.
−Removed: In the case of either (i) a termination by us for a reason other than death, disability or “Cause,”
−Removed: or (ii) a resignation for “Good Reason,”
−Removed: in each case that occurs within 90 days prior to and in connection with a “Change of Control”
−Removed: (as that term is defined in his employment agreement), or within 18 months after the occurrence of a “Change of Control,”
−Removed: then, in addition to the foregoing severance provisions, all unvested stock options and unvested awards of restricted stock held by Dr.
−Removed: Baffa at the time that such termination occurs will be accelerated and deemed to have vested as of his employment termination date, and Dr.
−Removed: Baffa will be entitled to full target amount of his annual performance bonus for the calendar year in which such termination occurs.
−Removed: Non-competition and Non-solicitation.
−Removed: Baffa has entered into an invention, non-disclosure, non-solicitation and non-competition agreement, which provides that he will not compete with us or solicit our clients or customers for a year after the termination or cessation of his employment with us, and further provides that he will not solicit our employees for one year after the termination or cessation of his employment with us.
−Removed: Employment Agreement with Laurence James Neil Cooper, M.D., Ph.D.
−Removed: Cooper served as our Chief Executive Officer from May 2015 until February 2021, at which point Dr.
−Removed: Cooper served as a scientific advisor employee of the Company.
−Removed: As a scientific advisor employee, Dr.
−Removed: Cooper continued receiving his base salary and remained eligible for our employee benefit programs pursuant to the terms of his employment agreement.
−Removed: On April 5, 2021, we entered into a separation agreement with Dr.
−Removed: Cooper, or the Cooper Separation Agreement, providing for his cessation of employment effective April 9, 2021 and a consulting agreement, or the Cooper Consulting Agreement, providing his continued consulting thereafter.
−Removed: For a description of the material terms of the Cooper Separation Agreement and the Cooper Consulting Agreement see below under “
−Removed: Consulting Agreement with Laurence James Neil Cooper, M.D., Ph.D.
−Removed: Below is a summary of the material terms of Dr.
−Removed: Cooper’s employment agreement in place during 2021 when he served as our Chief Executive Officer.
−Removed: Cooper received a base salary of $573,000.
−Removed: Under his employment agreement, his base salary was subject to review by the board of directors or the compensation committee at least annually.
−Removed: Annual Performance Bonus.
−Removed: Under his employment agreement, Dr.
−Removed: Cooper was eligible to receive an annual bonus based on his performance as determined by the board of directors or the compensation committee.
−Removed: The target amount of the annual performance bonus was 200% of his base salary, with the actual amount to be received determined by the board of directors or the compensation committee.
−Removed: Equity Incentive Grants.
−Removed: Cooper was eligible under his employment agreement to receive equity awards as determined by the board of directors in its discretion from time to time.
−Removed: Under certain circumstances, the vesting of Dr.
−Removed: Cooper’s equity awards could have been accelerated in the event of a change in control or if Dr.
−Removed: Cooper’s employment with us is terminated.
−Removed: Expense Reimbursement.
−Removed: Under his employment agreement, Dr.
−Removed: Cooper was eligible for reimbursement of normal, usual and necessary expenses incurred by him in furtherance of our business and affairs, including reasonable travel and entertainment expenses and the ordinary and necessary expenses incurred in connection with his commute.
−Removed: Non-competition and Non-solicitation.
−Removed: Cooper has entered into an invention, non-disclosure and non-competition agreement, which provides that he will not compete with us or solicit our clients or customers for a year after the termination or cessation of his employment with us, and further provides that he will not solicit our employees for one year after the termination or cessation of his employment with us.
−Removed: Separation Agreement and Consulting Agreement with Laurence James Neil Cooper, M.D., Ph.D.
−Removed: On April 5, 2021, we entered into the Cooper Separation Agreement, and the Cooper Consulting Agreement.
−Removed: Under the Cooper Separation Agreement, in exchange for a release of claims and certain post-employment covenants and in lieu of any severance benefits under his employment agreement, Dr.
−Removed: Cooper is entitled to receive continuing payments of his base salary and COBRA premiums for a period of 18 months, a cash payment of $143,250, representing a pro-rata target amount of his annual performance bonus for 2021, a fully-vested restricted stock award with a grant value of $917,000, which represented Dr.
−Removed: Cooper’s 2020 annual bonus, and certain limited reimbursements for legal fees and housing.
−Removed: Cooper is not entitled to any equity acceleration in connection with his separation, however his equity awards are eligible to continue to vest pursuant to their terms based on his consulting services to us.
−Removed: The board of directors determined these severance benefits were appropriate to provide Dr.
−Removed: Cooper, considering the severance benefits provided under the terms of his employment agreement and his contributions to our Company.
−Removed: The term of the Cooper Consulting Agreement commenced on Dr.
−Removed: Cooper’s employment separation and continues for up to three years, subject to earlier termination by either Dr.
−Removed: Cooper or the Company, provided that if Dr.
−Removed: Cooper terminates the agreement within the first year of the term, our sole remedy will be the right to cause Dr.
−Removed: Cooper to reimburse us certain of his cash severance described in the Separation Agreement.
−Removed: If we terminate the Cooper Consulting Agreement before the first anniversary of the effective date without cause (as defined in the Cooper Consulting Agreement) or Dr.
−Removed: Cooper terminates the agreement within the first year for good reason (as defined in the Cooper Consulting Agreement), the non-competition and non-solicitation provisions described above will be deemed waived by us.
−Removed: Unless the Cooper Consulting Agreement is terminated by us with cause or by Dr.
−Removed: Cooper before the first anniversary of the effective date and without good reason, all unvested restricted stock or options will immediately vest as of the effective date of the termination.
−Removed: Under the Cooper Consulting Agreement, Dr.
−Removed: Cooper may earn consulting fees in amounts of up to $573,000 for the first year and $300,000 for each of the following two years and is also eligible for reimbursement of reasonable out-of-pocket business expenses.
−Removed: In addition, the Cooper Consulting Agreement includes confidentiality and intellectual property provisions.
−Removed: Cooper received $286,500 in fees under the Cooper Consulting Agreement in 2021.
−Removed: Employment Agreement with Heidi Hagen
−Removed: On February 24, 2021, the board of directors appointed Heidi Hagen as our Interim Chief Executive Officer, effective February 25, 2021.
−Removed: Effective February 25, 2021, we entered into an employment agreement with Ms.
−Removed: Hagen, governing the terms of her employment as our Interim Chief Executive Officer.
−Removed: The majority of the equity value was provided as stock options to require an increase in the stock price and to allow the timeframe required for the long-term price improvement as a reflection of the long drug development cycle from discovery to commercial product.
−Removed: Hagen stepped down as Interim Chief Executive Officer on August 30, 2021 in connection with Mr.
−Removed: Boyle’s employment as our Chief Executive officer.
−Removed: Sign on Bonus.
−Removed: Hagen’s employment agreement provided for an annual base salary of $575,000, pro-rated for service, and a one-time sign-on bonus of $50,000.
−Removed: Performance Bonus.
−Removed: Hagen was entitled to receive certain performance bonuses if she remained employed as our Interim Chief Executive Officer after September 1, 2021, these were not paid as a result of the appointment of Mr.
−Removed: Boyle as our new Chief Executive Officer effective August 31, 2021.
−Removed: Hagen received a bonus in the amount of $150,000.
−Removed: Equity Incentive Grants.
−Removed: In connection with her appointment as our Interim Chief Executive Officer and pursuant to her employment agreement, on March 4, 2021, the board of directors granted Ms.
−Removed: Hagen 90,000 restricted shares of our common stock, which were scheduled to vest on the one-year anniversary of the date of grant, subject to Ms.
−Removed: Hagen’s continued employment with us through such vesting date.
−Removed: In addition, pursuant to her employment agreement, on March 4, 2021, the board of directors granted to Ms.
−Removed: Hagen an option to purchase 675,000 shares of our common stock, which option has an exercise price of $4.31 per share.
−Removed: The option was scheduled to vest in twelve equal monthly installments over the term of one year, subject to Ms.
−Removed: Hagen’s continued employment with us through each such vesting date.
−Removed: Hagen’s employment agreement provided that if Ms.
−Removed: Hagen’s employment terminates either because a replacement, full-time chief executive officer has been hired, or because we terminate her employment without “Cause”
−Removed: (as defined in her employment agreement), then upon termination of her employment, Ms.
−Removed: Hagen’s shares of restricted stock shall vest in full, and any unvested portion of Ms.
−Removed: Hagen’s option grant shall vest in full and become exercisable immediately.
−Removed: Hagen’s resignation as the Company’s Interim Chief Executive Officer on August 29, 2021, Ms.
−Removed: Hagen’s 90,000 restricted stock and option grant of 675,000 shares vested in full.
−Removed: Severance Provisions.
−Removed: Hagen’s employment agreement provided that if she was terminated by us for any reason other than death, disability or Cause, then we would be obligated to pay to Ms.
−Removed: Hagen her base salary through the date of termination, any accrued vacation, and any expense reimbursement amounts for expenses incurred through the date of termination.
−Removed: If, within 30 days after the effective date of termination, Ms.
−Removed: Hagen executes a written general release, she will also be entitled to receive continuing payments of her base salary for a period of four months.
−Removed: In addition, unless her employment is terminated for Cause, we may be required to pay 100% of applicable COBRA premiums for Ms.
−Removed: Hagen for up to 12 months.
−Removed: Employment Agreement with Jill Buck
−Removed: Buck most recently served as our Executive Vice President, GM Gene Therapy, joining Alaunos in September 2015, and being promoted to Executive Vice President, Strategy and Operations in early 2021.
−Removed: Buck left the Company on September 15, 2021.
−Removed: Buck entered into an employment agreement dated April 23, 2019, which we subsequently amended in November 2020, as Executive Vice President, GM Gene Therapy.
−Removed: Buck had an at-will employment relationship with us.
−Removed: Buck received a base salary of $385,000.
−Removed: Under her employment agreement, Ms.
−Removed: Buck’s annual base salary was subject to review by the board of directors or the compensation committee at least annually.
−Removed: Annual Performance Bonus.
−Removed: Under her employment agreement, Ms.
−Removed: Buck was eligible to receive an annual bonus based on her performance as determined by the board of directors or the compensation committee.
−Removed: The target amount of the annual performance bonus is 40% of her base salary, with the actual amount to be received determined by the board of directors or the compensation committee.
−Removed: Equity Incentive Grants.
−Removed: Buck was eligible to receive equity awards as determined by the board of directors in its sole discretion from time to time.
−Removed: Severance Provisions.
−Removed: Buck’s employment agreement provided that if (i) we terminated Ms.
−Removed: Buck for a reason other than death, disability or “Cause”
−Removed: (as that term is defined in her employment agreement), or (ii) Ms.
−Removed: Buck resigned for “Good Reason”
−Removed: (as that term is defined in her employment agreement), Ms.
−Removed: Buck was entitled to receive a severance payment equal to twelve months of her then-current base salary, plus payment of our portion of the contributions for medical and dental insurance coverage for twelve months, subject to Ms.
−Removed: Buck’s execution and delivery of a general release in favor of the Company.
−Removed: In the case of either (i) a termination by us for a reason other than death, disability or “Cause,”
−Removed: or (ii) a resignation for “Good Reason,”
−Removed: in each case that occurs within 90 days prior to and in connection with a “Change in Control”
−Removed: (as that term is defined in her employment agreement), or within 18 months after the occurrence of a “Change in Control,”
−Removed: all unvested stock options and unvested awards of restricted stock held by Ms.
−Removed: Buck at the time that such termination occurs would have been accelerated and deemed to have vested as of her employment termination date, and Ms.
−Removed: Buck would have been entitled to full target amount of her annual performance bonus for the calendar year in which such termination occurs.
−Removed: In connection with her departure, Ms.
−Removed: Buck received $385,000, pursuant to the terms of her separation agreement.
−Removed: Non-competition and Non-solicitation.
−Removed: Buck has entered into an invention, non-disclosure and non-competition agreement, which provided that she would not compete with us or solicit our clients or customers for a year after the termination or cessation of her employment with us, and further provides that she would not solicit our employees for one year after the termination or cessation of her employment with us .
−Removed: Health and Benefits
−Removed: All of our full-time employees and certain of our part-time employees are eligible to participate in our health and welfare benefit plans, including our medical, dental, life and long-term disability insurance plans.
−Removed: Our health and welfare benefit plans do not discriminate in scope, terms or operation in favor of our executive officers.
−Removed: Our employees, including our named executive officers, are eligible to participate in our 401(k) plan.
−Removed: Our 401(k) plan is intended to qualify as a tax qualified plan under Section 401 of the Internal Revenue Code of 1986, as amended (the “Code”).
−Removed: Our 401(k) plan provides that each participant may contribute a portion of his or her pretax compensation, up to a statutory limit, which for most employees was $19,500 in 2021, with an additional “catch up”
−Removed: contribution of up to $6,500 permitted for employees age 50 and older, to the 401(k) plan.
−Removed: Employee contributions are held and invested by the 401(k) plan’s trustee.
−Removed: In 2021, we matched employee contributions at a rate of 100% up to 4% of an employee’s base salary contributed to the plan.
−Removed: We believe that this benefit is consistent with the practices of our peer companies, and therefore helps us to recruit and retain key talent at a minimal cost to us.
−Removed: Outstanding Equity Awards at 2021 Fiscal Year-End
−Removed: The following table sets forth information regarding option awards and restricted stock awards held as of December 31, 2021 by our named executive officers.
−Removed: Option Awards
−Removed: Number of Securities
−Removed: Underlying Unexercised Options
−Removed: Exercise Price
−Removed: Shares or Units of Stock That Have Not Vested
−Removed: Exercisable (#)
−Removed: Unexercisable (#)
−Removed: Market Value ($)(2)
−Removed: Laurence James Neil Cooper
−Removed: Eleanor de Groot
−Removed: Raffaele Baffa
−Removed: (1) Each stock option was granted with an exercise price equal to the fair market value of our common stock on the grant date.
−Removed: (2) Market values are calculated based on the closing market price of our common stock as reported on the Nasdaq Global Select Market on December 31, 2021, which was $1.09 per share.
−Removed: (3) Vests with respect to 22,017 shares on March 31, 2022, June 30, 2022, and December 31, 2022, and with respect to 22,016 on September 30, 2022.
−Removed: (4) Vests with respect to 57,233 shares on December 31, 2022.
−Removed: (5) Options expired on February 2, 2022.
−Removed: (6) Vests with respect to 164,063 shares on February 28, 2022, August 30, 2022, February 28, 2023, August 30, 2023, February 28, 2024, August 30, 2024, February 28, 2025, and August 30, 2025 and with respect to 164,062 shares on May 30, 2022, November 30, 2022, May 30, 2023, November 30, 2023, May 30, 2024, November 30, 2024, and May 30, 2025.
−Removed: (7) Such shares are subject to transfer and forfeiture restrictions that lapse with respect to 218,750 shares on each of August 30, 2022, August 30, 2023, August 30, 2024, and August 30, 2025.
−Removed: (8) Vests with respect to 6,883 shares on each of March 31, 2022, June 30, 2022, and December 31, 2022 and with respect to 6,884 shares on September 30, 2022.
−Removed: (9) Vests with respect to 23,824 shares on each of March 31, 2022, June 30, 2022, September 30, 2022, March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024, and September 30, 2024 and with respect to 23,825 shares on December 31, 2022, December 31, 2023, and December 31, 2024.
−Removed: (10) Such shares are subject to transfer and forfeiture restrictions that lapse with respect to 17,900 shares on December 31, 2022.
−Removed: (11) Such shares are subject to transfer and forfeiture restrictions that lapse with respect to 12,706 shares on December 31, 2022, December 31, 2023 and December 31, 2024.
−Removed: (12) Vests with respect to 31,250 shares on February 16, 2022.
−Removed: The remaining unvested shares will be forfeited on March 31, 2022 and vested options will expire on June 30, 2022.
−Removed: (13) Such shares will be forfeited on March 31, 2022.
−Removed: (14) Such shares will be forfeited on March 31, 2022.
−Removed: Payments Upon Separation
−Removed: Severance and Change in Control Benefits
−Removed: We have agreements with each of our named executive officers providing them with severance benefits, including double trigger cash and equity severance for termination in connection with a change-in-control, as further described in “
−Removed: Employment and Change in Control Agreements ”
−Removed: The amounts and terms and conditions of these severance rights reflect the negotiations between each of our named executive officers and us at the time these documents were entered into, the benefits provided by our peer companies to similarly situated executives at the time they were negotiated, as well as our desire for internal pay equity among our executive officers.
−Removed: We believe that these
−Removed: existing arrangements are consistent with market practices and are critical to attracting and retaining high quality executives.
−Removed: We also believe the involuntary termination benefits allow our executives to focus on normal business operations rather than worrying about how business decisions that may be in our best interest will impact their own financial security.
−Removed: We do not provide golden parachute excise tax gross ups.
−Removed: Director Compensation Table
−Removed: The following table sets forth information regarding the compensation earned for service on our board of directors by our non-employee directors during the year ended December 31, 2021.
−Removed: We reimburse members of our board of directors for reasonable travel and out-of-pocket expenses incurred in connection with attending board of directors and committee meetings.
−Removed: Fees Earned or
−Removed: Paid in Cash ($)
−Removed: Option Awards (1) ($)
−Removed: Stock Awards (1) ($)
−Removed: Christopher Bowden
−Removed: Heidi Hagen (3)
−Removed: Kevin Buchi (4)
−Removed: (1) The amounts reported in the “Option Awards”
−Removed: and “Stock Awards”
−Removed: columns represent compensation expense recognized for financial statement purposes under ASC Topic 718.
−Removed: In the case of each of our directors, the option award and/or stock award was granted on March 4, 2021.
−Removed: For a discussion of the assumptions relating to our valuations of these stock options, please see Note 13 to the financial statements included in elsewhere in this Annual Report on Form 10-K.
−Removed: These costs reflect our accounting expense for these stock options and do not correspond to the actual value that may be recognized by the directors.
−Removed: Postma was appointed to the board of directors effective February 4, 2021.
−Removed: Hagen left the board of directors effective February 24, 2021, rejoined the board of directors effective August 30, 2021, and finally resigned from the board of directors effective November 2, 2021.
−Removed: Buchi resigned from the board of directors effective May 19, 2021.
−Removed: Non-Employee Director Compensation
−Removed: In 2021, each of our non-employee directors was compensated as described below:
−Removed: an annual cash retainer fee of $50,000 for service on the board of directors;
−Removed: additional annual cash retainer fees for board committee service as follows:
−Removed: Audit Committee
−Removed: Compensation Committee
−Removed: Corporate Governance and Nominating Committee
−Removed: The executive chair of our board of directors also receives further annualized cash compensation of $40,000.
−Removed: All cash retainers were paid on a quarterly basis in arrears to non-employee directors who continue to serve as members of the board of directors on the last business day of each calendar quarter.
−Removed: In 2021, the non-employee director equity compensation program was modified to provide an annual equity award for 75,000 options and 10,000 RSUs to be granted on the date of each of our annual shareholder meetings (our prior practice was to grant annual awards in December each year, with the last annual award under our historical director compensation program made in December 2019).
−Removed: The executive chair also receives an additional 75,000 annual options and an additional 10,000 annual RSUs to recognize his leadership and workload.
−Removed: The annual options vest in equal monthly installments over one year and the annual RSUs vest in full on the earlier of one-year from grant or the next annual shareholder meeting.
−Removed: The foregoing grants to non-employee directors joining our Board of Directors other than at an annual stockholder meeting will be prorated for the number of months remaining until our next annual stockholder meeting.
−Removed: In addition, in connection with a director’s initial election of the board of directors, he or she receives options to purchase 150,000 shares of our comment stock on the date of each new non-employee director’s appointment to our board of directors.
−Removed: The directors who received this award in 2021 included Ms.
−Removed: One-thirty-sixths of the shares underlying these awards will vest in equal monthly installments commencing, in the case of Ms.
−Removed: Thistle on December 15, 2021, in the case of Mr.
−Removed: Postma on March 4, 2021 and in the
−Removed: Vieser, on January 15, 2021.
−Removed: We also granted to all of our directors awards of options and restricted stock to reflect the stub period between January and May 2021, when the date of our annual meeting would become the new grant date of director awards.
−Removed: We agreed to provide directors an award equal to an annual grant of 75,000 options and 10,000 shares of restricted stock.
−Removed: These annual amounts were prorated to only cover the 5 months between January and May, and further pro-rated for those who spent less time on the board.
−Removed: In the case of Ms.
−Removed: Thistle, we provided her an award assuming six months of service, to recognize that she had not yet received any awards since her joining the board in November 2020.
−Removed: Each director was entitled elect to receive their equity grant in the form of restricted shares of our common stock, options to purchase shares of our common stock, or half restricted stock units and half options.
−Removed: As set forth in its written charter, the compensation committee annually reviews director compensation practices in consultation with our compensation consultant and recommends any changes for adoption by the full board of directors.
−Removed: As such, the director compensation described above is subject to change at the discretion of the board of directors.
+Added: The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
−Removed: Securities Authorized for Issuance under Equity Compensation Plans
−Removed: Our 2012 Equity Incentive Plan, or the 2012 Plan and our 2020 Equity Incentive Plan, or the 2020 Plan, are our only equity compensation plans approved by our stockholders.
−Removed: The following table sets forth certain information as of December 31, 2021 with respect to the 2012 Plan and 2020 Plan:
−Removed: Securities to
−Removed: be Issued Upon
−Removed: of Outstanding
−Removed: Exercise Price of
−Removed: Available for
−Removed: Future Issuance
−Removed: Plans (Excluding
−Removed: Plan Category
−Removed: Equity compensation plans approved by stockholders:
−Removed: 2012 Stock Option Plan
−Removed: 2020 Equity Incentive Plan
−Removed: Equity compensation plans not approved by stockholders:
−Removed: Inducement Awards
−Removed: Security Ownership of Certain Beneficial Owners and Management
−Removed: The following table sets forth certain information with respect to the beneficial ownership of common stock as of March 15 for:
−Removed: each person, or group of affiliated persons, who is known by us to be the beneficial owner of greater than five percent of our outstanding common stock;
−Removed: each of our directors and director nominees;
−Removed: each of our named executive officers named in the “Executive Compensation - Executive Compensation Table”
−Removed: section above;
−Removed: all of our directors and executive officers as a group.
−Removed: Beneficial ownership is determined in accordance with the rules of the SEC.
−Removed: These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities, or have the right to acquire such powers within 60 days.
−Removed: Common stock subject to options that are currently exercisable or exercisable within 60 days of March 15 are deemed to be outstanding and beneficially owned by the person holding the options.
−Removed: These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
−Removed: Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws.
−Removed: ownership calculations are based on 216,127,443 shares outstanding as of March 15, 2022.
−Removed: Except as otherwise noted below, the addresses for persons listed in the table is c/o Alaunos Therapeutics, Inc., 8030 El Rio Street, Houston, Texas 77054.
−Removed: Number of Shares Beneficially Owned
−Removed: Percentage of Common Stock Beneficially Owned (%)
−Removed: Name of Beneficial Owner
−Removed: 5% Stockholders:
−Removed: MSD Credit Opportunity Master Fund, L.P.
−Removed: The Vanguard Group (2)
−Removed: BlackRock, Inc.
−Removed: Discovery Capital Management (4)
−Removed: Level One Parties (5)
−Removed: State Street Corporation (6)
−Removed: Named Executive Officers and Directors:
−Removed: Heidi Hagen (8)
−Removed: Laurence James Neil Cooper (9)
−Removed: Eleanor de Groot (10)
−Removed: Raffaele Baffa (11)
−Removed: Jill Buck (12)
−Removed: Christopher Bowden (13)
−Removed: James Huang (14)
−Removed: Mary Thistle (16)
−Removed: Jaime Vieser (17)
−Removed: Holger Weis (18)
−Removed: All executive officers and directors as a group (12 persons)
−Removed: *Represents ownership of less than one percent.
−Removed: (1) Based in part on a Schedule 13G/A filed with the SEC on February 14, 2020 by MSD Partners, L.P., or MSD Partners.
−Removed: MSD Partners has shared voting power with respect to 15,151,516 shares of our common stock, and may be deemed to beneficially own 15,151,516 shares of our common stock.
−Removed: MSD Partners is the investment manager of, and may be deemed to beneficially own securities beneficially owned by, MSD Credit Opportunity Master Fund, L.P.
−Removed: MSD Partners (GP), LLC (“MSD GP”) is the general partner of, and may be deemed to beneficially own securities beneficially owned by, MSD Partners.
−Removed: Each of Glenn R.
−Removed: Fuhrman, John C.
−Removed: Phelan and Marc R.
−Removed: Lisker is a manager of, and may be deemed to beneficially own securities beneficially owned by, MSD GP.
−Removed: The 22,101,509 shares includes 6,949,993 out of the 7,575,758 shares of common stock issuable upon the full exercise of a warrant, which is the number of shares issuable upon exercise as limited by the Beneficial Ownership Limitation (as defined below) as of March 15, 2022.
−Removed: Such warrant is only exercisable to the extent that the holder thereof, together with its affiliates, would beneficially own no more than 9.99% of the outstanding shares of our common stock after giving effect to such exercise (the “Beneficial Ownership Limitation”).
−Removed: As a result of the Beneficial Ownership Limitation, the number of shares that may be issued to the holder upon exercise of the warrant may change depending upon changes in the outstanding shares of our common stock.
−Removed: Upon 61 days’
−Removed: prior notice to the Company, the holder may increase, decrease or terminate the Beneficial Ownership Limitation.
−Removed: The address of MSD Credit Opportunity Master Fund, L.P.
−Removed: is c/o Maples Corporate Services Limited, P.O.
−Removed: Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
−Removed: (2) Based solely on a Schedule 13G/A filed with the SEC on February 10, 2022 by The Vanguard Group, or Vanguard.
−Removed: Vanguard is the beneficial owner of 11,633,700 shares and has shared voting power with respect to 395,047 shares, sole dispositive power with respect to 11,076,829 shares and shared dispositive power with respect to 556,871 shares.
−Removed: Aggregate beneficial ownership reported by Vanguard includes beneficial ownership of its subsidiaries, Vanguard Asset Management, Limited, Vanguard Fiduciary Trust Company, Vanguard Global Advisors, LLC, Vanguard Group (Ireland) Limited, Vanguard Investments Australia Ltd, Vanguard Investments Canada Inc., Vanguard Investments Hong Kong Limited and Vanguard Investments UK, Limited.
−Removed: The address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
−Removed: (3) Based solely on a Schedule 13G/A filed with the SEC on February 3, 2022 by Blackrock, Inc., or BlackRock.
−Removed: BlackRock, as a parent holding company, is the beneficial owner of 16,764,972 shares and has sole voting power with respect to 16,427,610 shares and sole dispositive power with respect to 16,764,972 shares.
−Removed: Aggregate beneficial ownership reported by BlackRock is on a consolidated basis and includes beneficial ownership of its subsidiaries, BlackRock Life Limited, Aperio Group, LLC, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited,
−Removed: BlackRock Investment Management (Australia) Limited, BlackRock Fund Advisors and BlackRock Fund Managers Ltd.
−Removed: The address of BlackRock.
−Removed: is 55 East 52nd Street, New York, New York 10055.
−Removed: (4) Based solely on a Schedule 13G filed with the SEC on February 14, 2022 by Discovery Capital Management, LLC, or Discovery.
−Removed: Discovery is the beneficial owner of 13,346,493 shares and has shared voting power with respect to 13,346,493 shares and shared dispositive power with respect to 13,346,493 shares.
−Removed: Citrone, the control person of Discovery, may be deemed to exercise voting and/or dispositive power over the shares held for the account of Discovery.
−Removed: Aggregate beneficial ownership reported by Discovery includes beneficial ownership of Discovery Global Opportunity Master Fund, Ltd., a Cayman Islands limited company.
−Removed: The address of Discovery is 20 Marshall Street, Suite 310, South Norwalk, CT 06854.
−Removed: (5) Based solely on a Schedule 13G jointly filed with the SEC on February 11, 2022 by Robert D.
−Removed: Hardie, Mollie G.
−Removed: Hardie and Level One Partners, LLC (collectively, the “Level One Parties”).
−Removed: The Level One Parties beneficially own 24,178,873 shares.
−Removed: Hardie is the beneficial owner of 10,226,937, and has shared voting and dispositive power with respect to 7,406,823 shares, and sole dispositive and voting power with respect 2,860,114.
−Removed: Hardie is the beneficial owner of 7,675,213, and has shared voting and dispositive power with respect to 7,276,723 shares, and sole dispositive and voting power with respect 398,490.
−Removed: Level One Partners, LLC is the beneficial owner of 6,236,723 shares, and has shared voting and dispositive power with respect to all 6,236,723 shares.
−Removed: The address of the Level One Parties is 210 Ridge McIntire Road, Suite 350, Charlottesville, Virginia 22903.
−Removed: (6) Based solely on a Schedule 13G filed with the SEC on February 11, 2022 by State Street Corporation.
−Removed: State Street Corporation is the beneficial owner of 13,318,734 shares and has shared voting power with respect to 12,875,132 shares and shared dispositive power with respect to 13,318,734 shares.
−Removed: Aggregate beneficial ownership reported by State Street Corporation includes beneficial ownership of its subsidiaries, SSGA Funds Management, Inc., State Street Global Advisors Limited, State Street Global Advisors, Australia, Limited, State Street Global Advisors Europe Limited, and State Street Global Advisors Trust Company.
−Removed: The address of State Greet Corporation is State Street Financial Center, 1 Lincoln Street, Boston, MA 02111.
−Removed: (7) Consists of (i) 885,000 shares of common stock held by Mr.
−Removed: Boyle and (ii) 328,125 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (8) To the best of our knowledge, consists of (i) 145,889 shares of common stock held by Ms.
−Removed: (9) To the best of our knowledge, consists of (i) 2,067,017 shares of common stock held by Dr.
−Removed: Cooper and (ii) 685,321 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (10) Consists of (i) 237,106 shares of common stock held by Dr.
−Removed: de Groot and (ii) 453,742 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (11) Consists of (i) 280,645 shares of common stock held by Dr.
−Removed: Baffa and (ii) 156,250 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (12) To the best of our knowledge, consists of 127,214 shares of common stock held by Ms.
−Removed: (13) Consists of (i) 4,167 shares of common stock held by Mr.
−Removed: Bowden and (ii) 175,843 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (14) Consists of (i) 108,333 shares of common stock held by Mr.
−Removed: Huang and (ii) 62,500 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (15) Consists of (i) 1,201,870 shares of common stock held by Mr.
−Removed: Postma, (ii) 4,250,000 shares of common stock held by Water Mill Asset Management Corp., where Mr.
−Removed: Postma serves as the principal, (iii) 3,574 shares of common stock held by the IRA of Mr.
−Removed: Postma’s spouse, (iv) 946,970 shares of common stock issuable upon the exercise of warrants exercisable within 60 days of March 15, 2022 and (v) 81,250 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (16) Consists of (i) 5,000 shares of common stock held by Ms.
−Removed: Thistle and (ii) 108,333 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (17) Consists of (i) 705,321 shares of common stock held by Mr.
−Removed: Vieser, (ii) 325,000 shares of common stock held in Uniform Transfer to Minors Act accounts by Mr.
−Removed: Vieser’s children, and (iii) 97,916 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
−Removed: (18) Consists of (i) 120,167 shares of common stock held by Mr.
−Removed: Weis, (ii) 19,000 shares of common stock held by Mr.
−Removed: spouse, (iii) 2,440 shares of common stock held by Mr.
−Removed: children, and (iv) 97,916 shares of common stock issuable upon the exercise of options exercisable within 60 days of March 15, 2022.
+Added: The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Certain Relationships and Related Transactions, and Director Independence
−Removed: The following discussion relates to certain transactions that involve both the Company and one of our executive officers, directors, director nominees or five-percent stockholders, or any member of their immediate family, each of whom we refer to as a “related party.”
−Removed: For purposes of this discussion, a “related-party transaction”
−Removed: is a transaction, arrangement or relationship:
−Removed: in which we participate;
−Removed: that involves an amount in excess of $120,000;
−Removed: in which a related party has a direct or indirect material interest.
−Removed: Related-Person Transaction Policy
−Removed: We have a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions.
−Removed: For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person, directly or indirectly, are, were or will be participants in which the amount involved will or may reasonably be expected to exceed $120,000 in any calendar year.
−Removed: Transactions involving compensation for services provided to us as an employee or director are not covered by this policy.
−Removed: A related person is any person who is, or at any time since the beginning of the Company’s last fiscal year was, an executive officer, director, or nominee to become a director of the Company or a beneficial owner of more than 5% of any class of our voting securities, including any of such persons’
−Removed: immediate family members and any entity that such persons owned, controlled, held a control position in or held a 5% or greater beneficial ownership interest in.
−Removed: Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate, to another independent body of our board of directors, for review, consideration and approval or ratification.
−Removed: The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally.
−Removed: Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related person transactions and to effectuate the terms of the policy.
−Removed: In considering related person transactions, our audit committee, or other independent body of our board of directors, will take into account the relevant available facts and circumstances including, but not limited to:
−Removed: the risks, costs and benefits to us;
−Removed: the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;
−Removed: the availability of other sources for comparable services or products;
−Removed: and the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
−Removed: The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our board of directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our board of directors, determines in the good faith exercise of its discretion.
−Removed: Certain Related-Party Transactions
−Removed: Except as described below, there have been no transactions since January 1, 2021 in which we have been a participant in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of our common stock, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described elsewhere in this filing under the sections titled “—
−Removed: Executive Compensation ”
−Removed: and “—
−Removed: Director Compensation .”
−Removed: Collaboration with PGEN and MD Anderson
−Removed: On January 13, 2015, the Company, together with Precigen, entered into the MD Anderson License with MD Anderson (which Precigen subsequently assigned to PGEN).
−Removed: 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.
−Removed: 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.
−Removed: During the year ended December 31, 2021, the Company made payments of $0.1 million to MD Anderson compared to $0 during the year ended December 31, 2020.
−Removed: The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs for the year ended December 31, 2021 was $0 and for the year ended December 31, 2020 was $8.1 million, which is included in other current assets on the Company’s balance sheet.
−Removed: WaterMill Settlement Agreement
−Removed: On February 4, 2021, we entered into an agreement, or the Settlement Agreement, with WaterMill and Robert W.
−Removed: Postma (collectively, the “WaterMill Parties”).
−Removed: Pursuant to the Settlement Agreement, we increased the size of our board of directors from eight to nine directors and appointed Mr.
−Removed: Postma to fill the newly created directorship.
−Removed: The Settlement Agreement included certain customary standstill restrictions applicable from February 4, 2021 until the date that was the earlier of (i) January 1, 2022 and (ii) thirty (30) calendar days prior to the nomination deadline for our 2022 annual meeting of stockholders, or the Standstill Period.
−Removed: During the Standstill Period, the WaterMill Parties were, among other things, restricted from engaging in any solicitation of proxies or written consents with respect to the election or removal of directors or, with certain exceptions, any other matter or proposal, or acquiring voting stock that would result in the WaterMill Parties having beneficial ownership of more than 9.9% of our outstanding voting stock.
−Removed: Under the Settlement Agreement, we agreed that during the Standstill Period, we would nominate each of Mr.
−Removed: Postma, Jaime Vieser and Holger Weis for election at any stockholder meeting at which directors are to be elected and will recommend, support and solicit proxies for the election of each of Messrs.
−Removed: Postma, Vieser and Weis.
−Removed: The Settlement Agreement also provided that at any meeting of our stockholders held prior to the expiration of the Standstill Period, the WaterMill Parties would vote all of their shares of our securities in accordance with the recommendation of our board of directors, with respect to the election, removal and/or replacement of directors.
−Removed: The WaterMill Parties retained the right to vote in their sole discretion with respect to any other publicly announced proposal not made in breach of the Settlement Agreement.
−Removed: Further, pursuant to the Settlement Agreement, we agreed to reimburse the WaterMill Parties for up to $400,000 of their reasonable out-of-pocket fees and expenses out of a total of approximately $650,000 in fees and expenses actually incurred by the WaterMill Parties in connection with (i) the WaterMill Parties’
−Removed: solicitation of written consents from our stockholders to vote in favor of certain proposals, as set forth in the definitive consent statement filed by the WaterMill Parties on October 30, 2020, and (ii) the negotiation, execution and effectuation of the Settlement Agreement.
−Removed: As of February 19, 2021, we have fully reimbursed the WaterMill Parties an aggregate amount of $400,000.
−Removed: During the year ended December 31, 2021, we received $250,000 in insurance recoveries associated with legal expenses incurred on this matter.
−Removed: Joint Venture with TriArm Therapeutics Ltd.
−Removed: On December 18, 2018, we launched Eden BioCell, a joint venture with TriArm, to lead the commercialization of our Sleeping Beauty -generated CAR-T therapies in the People’s Republic of China (including Macau and Hong Kong), Taiwan and Korea.
−Removed: Under our agreements with TriArm, we licensed to Eden BioCell the rights in Greater China for its third-generation Sleeping Beauty -generated CAR-T therapies targeting the CD19 antigen.
−Removed: Eden BioCell is owned equally by us and TriArm and the parties share decision-making authority.
−Removed: TriArm agreed to contribute up to $10.0 million to Eden BioCell and has committed up to an additional $25.0 million to this joint venture.
−Removed: TriArm also manages all clinical development in the territory pursuant to a Master Services Agreement between TriArm and Eden BioCell.
−Removed: In March 2021 and as announced by the Company in April 2021, Eden BioCell 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.
−Removed: In September 2021, it was mutually agreed between the parties to dissolve the joint venture.
−Removed: The dissolution of the joint venture and the related entity is in progress.
−Removed: James Huang, who became a director of our Company in July 2020, and was appointed Chair of our board of directors in January 2021 and then Executive Chair of our board of directors in February 2021, was the founder and serves as managing partner of Panacea Venture, which is an investor in TriArm.
−Removed: Huang also serves as a member of Eden BioCell’s board of directors.
−Removed: Collaboration with Vineti Inc.
−Removed: On July 9, 2020, the Company entered into a master service agreement and statement of work with Vineti, Inc., or Vineti.
−Removed: Pursuant to the agreements, Vineti is developing a software platform to coordinate and orchestrate the order, cell collection and manufacturing process for the Company’s TCR-T clinical programs.
−Removed: Heidi Hagen, who became a director of the Company in June 2019 and resigned November 2, 2021 and served as the Company's Interim Chief Executive Officer on February 25, 2021 through her resignation on August 30, 2021, is a co-founder and former officer, of Vineti.
−Removed: The Company recorded expenses of approximately $0.4 million during the year ended December 31, 2021 and $29,000 during the year ended December 31, 2020, for services performed by Vineti.
−Removed: Indemnification Agreements
−Removed: We have entered into an indemnification agreement with each of our directors.
−Removed: These indemnification agreements and our charter and our bylaws indemnify each of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law.
−Removed: Independence of the Board of Directors
−Removed: Our board of directors has undertaken a review of the independence of our directors and considered whether any director has a relationship that, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a member of our board of directors.
−Removed: Based upon information requested from and provided by each director concerning such director’s background, employment and affiliations, including family relationships, the board of directors has determined that all of our directors, other than Mr.
−Removed: Boyle and Mr.
−Removed: Huang are “independent directors,”
−Removed: as such term is defined in Nasdaq Rule 5605(a)(2).
−Removed: In making these determinations,
−Removed: our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances that our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.
−Removed: Board Committees
−Removed: The board of directors has established three standing committees:
−Removed: an audit committee, a compensation committee and a corporate governance and nominating committee.
−Removed: Each committee operates under a charter that has been approved by the board of directors.
−Removed: Current copies of each committee’s charter are posted on the “Investors—Corporate Governance”
−Removed: section of our website, www.alaunos.com .
−Removed: Our website and its contents are not incorporated into this Annual Report on Form 10-K.
−Removed: The current members of the committees are as follows:
−Removed: Christopher Bowden, M.D.
−Removed: * Committee Chairperson
−Removed: Audit Committee
−Removed: The current members of the audit committee are Mr.
−Removed: Holger Weis, who serves as the committee’s Chair, Ms.
−Removed: Mary Thistle and Mr.
−Removed: Jaime Vieser.
−Removed: As set forth in the audit committee charter, the primary responsibility of the audit committee is to oversee our financial reporting processes and internal control system on behalf of the board of directors.
−Removed: In that regard, the audit committee is responsible for, among other things, the appointment, compensation, retention and oversight of the work performed by the independent registered public accounting firm employed by us.
−Removed: Each member of the audit committee is an “independent director,”
−Removed: as such term is defined in Nasdaq Rule 5605(a)(2) and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act.
−Removed: The board of directors has also determined that each of the audit committee members is able to read and understand fundamental financial statements and that at least one member of the audit committee has past employment experience in finance or accounting.
−Removed: The board of directors has determined that at least one member of the audit committee, Holger Weis, is an “audit committee financial expert,”
−Removed: as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Exchange Act.
−Removed: The audit committee held seven meetings during 2021.
−Removed: Compensation Committee
−Removed: The current members of the compensation committee are Ms.
−Removed: Thistle, who serves as the committee’s Chair, Dr.
−Removed: Christopher Bowden, Mr.
−Removed: Postma and Mr.
−Removed: As set forth in the compensation committee charter, the compensation committee reviews our compensation policies and practices and makes recommendations to the board of directors in connection with all compensation matters affecting our executive officers.
−Removed: Each member of the compensation committee is an “independent director,”
−Removed: as such term is defined in Nasdaq Rule 5605(a)(2) and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act.
−Removed: The compensation committee held ten meetings during 2021.
−Removed: Corporate Governance and Nominating Committee
−Removed: The current members of the corporate governance and nominating committee are Mr.
−Removed: Postma, who serves as the committee’s Chair, Dr.
−Removed: Christopher Bowden and Mr.
−Removed: Jaime Vieser.
−Removed: As set forth in the corporate governance and nominating committee charter, the primary responsibility of the corporate governance and nominating committee is to consider and make recommendations to the board of directors concerning the appropriate size, function and needs of the board of directors and its committees.
−Removed: In that regard, the corporate governance and nominating committee is, among other things, responsible for establishing criteria for membership on board of directors, recruiting and recommending candidates to fill newly created or vacant positions on the board of directors and reviewing any candidates recommended by stockholders.
−Removed: In addition, the corporate governance and nominating committee evaluates and assesses the performance of the board of directors as a whole and its committees.
−Removed: Each member of the corporate governance and nominating committee is an “independent director,”
−Removed: as such term is defined in Nasdaq Rule 5605(a)(2), and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act.
−Removed: The corporate governance and nominating committee held two meetings during 2021.
−Removed: Principal Accountant Fees and Services
+Added: The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Principal Accountant Fees and Services
−Removed: The following table presents the aggregate fees billed by RSM US LLP for the years ended December 31, 2021 and 2020.
−Removed: Audit Fees (1)
−Removed: Audit-Related Fees
−Removed: All Other Fees
−Removed: (1) Represents fees billed for professional services provided to us in connection with the annual audit of our financial statements, the review of our quarterly condensed financial statements, the audit of the effectiveness of our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (2020 only), as well as audit services that are normally provided by an independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years, such as statutory audits, and administrative fees and out-of-pocket costs.
−Removed: Other than as discussed above, we did not incur any fees of RSM US LLP for audit-related, tax or other services in 2021 or 2020.
−Removed: All fees described above were pre-approved by the audit committee.
−Removed: Pre-Approval Policy and Procedures
−Removed: The audit committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, RSM US LLP.
−Removed: The policy generally authorizes pre-approval by the audit committee of specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts.
−Removed: Pre-approval may also be given as part of the audit committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual, explicit, case-by-case basis before the independent registered public accounting firm is engaged to provide each service.
−Removed: The pre-approval of services may be delegated to one or more of the audit committee’s members, but the decision must be reported to the full audit committee at its next scheduled meeting.
+Added: The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Exhibits, Financial Statement Schedules
1 unchanged sentence
The Financial Statements required to be filed by Item 8 of this Annual Report, and filed in this Item 15, are as follows:
−Removed: Report of Independent Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm
Balance Sheets as of December 31, 2022 and 2021
Statements of Operations for the Years Ended December 31, 2022 and 2021
−Removed: Statements of Changes Stockholders’
+Added: Statements of Changes in Stockholders’
Equity for the Years Ended December 31, 2022 and 2021
8 unchanged sentences
000-32353, filed August 9, 2005).
−Removed: Amended and Restated Certificate of Incorporation, and all amendments thereto.
+Added: Amended and Restated Certificate of Incorporation, and all amendments thereto (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
Certificate of Merger dated September 13, 2005, relating to the merger of ZIO Acquisition Corp.
23 unchanged sentences
001-33038, filed March 2, 2020).
−Removed: Form of Warrant to Purchase Shares of Common Stock issued to SVB and certain of its Affiliates, dated December 28, 2021.
−Removed: Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.
+Added: Form of Warrant to Purchase Shares of Common Stock issued to SVB and certain of its Affiliates, dated December 28, 2021 (incorporated by reference to Exhibit 4.6 to the Registrant's Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
+Added: Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.7 to the Registrant's Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
ZIOPHARM Oncology, Inc.
20 unchanged sentences
001-33038, filed January 31, 2013).
−Removed: Employment Agreement by and between the Registrant and Laurence James Neil Cooper, M.D., Ph.D.
−Removed: dated as of May 5, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No.
−Removed: 001-33038, filed May 7, 2015).
−Removed: Separation Agreement, dated April 5, 2021, by and between the Registrant and Dr.
−Removed: Laurence Cooper (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No.
−Removed: 001-33038, filed April 9, 2021)
−Removed: Consulting Agreement, dated April 5, 2021, by and between the Registrant and Dr.
−Removed: Laurence Cooper (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No.
−Removed: 001-33038, filed April 9, 2021).
−Removed: Employment Agreement, dated February 25, 2021, by and between the Registrant and Heidi Hagen (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No.
−Removed: 001-33038, filed March 2, 2021).
Employment Agreement, dated August 24, 2021, by and between the Registrant and Kevin S.
1 unchanged sentence
001-33038, filed August 30, 2021).
−Removed: Employment Agreement, dated April 23, 2019, by and between the Registrant and Jill Buck.
−Removed: Amendment to Employment Agreement, dated November 23, 2020, by and between the Registrant and Jill Buck.
−Removed: Employment Agreement, dated April 23, 2019, by and between the Registrant and Eleanor de Groot.
−Removed: Amendment to Employment Agreement, dated November 23, 2020, by and between the Registrant and Eleanor de Groot.
−Removed: Employment Agreement, dated September 30, 2020, by and between the Registrant and Raffaele Baffa.
−Removed: Amendment to Employment Agreement, dated November 23, 2020, by and between the Registrant and Raffaele Baffa.
Form of Retention Bonus Agreement (incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K, SEC File No.
38 unchanged sentences
000-33038, filed November 5, 2020).
−Removed: Third Amendment to Patent License Agreement, dated as of April 16, 2021, by and between the Registrant and the National Cancer Institute.
−Removed: Fourth Amendment to Patent License Agreement, dated as of May 4, 2021, by and between the Registrant and the National Cancer Institute.
−Removed: Fifth Amendment to Patent License Agreement, dated as of August 13, 2021, by and between the Registrant and the National Cancer Institute.
+Added: Third Amendment to Patent License Agreement, dated as of April 16, 2021, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
+Added: Fourth Amendment to Patent License Agreement, dated as of May 4, 2021, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.39 to the Registrant’s Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
+Added: Fifth Amendment to Patent License Agreement, dated as of August 13, 2021, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
Cooperative Research and Development Agreement, dated January 9, 2017, by and among the Registrant, the National Cancer Institute, and Intrexon Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K SEC File No.
6 unchanged sentences
001-33038, filed September 26, 2019).
−Removed: Third Amendment to the Cooperative Research and Development Agreement, dated March 15, 2022, by and among the National Cancer Institute and the Registrant.
+Added: Third Amendment to the Cooperative Research and Development Agreement, dated March 15, 2022, by and among the National Cancer Institute and the Registrant (incorporated by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
+Added: Fourth Amendment to the Cooperative Research and Development Agreement, dated June 24, 2022, by and between the National Cancer Institute and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q, SEC File No.
+Added: 001-33038, filed August 15, 2022).
Lease Agreement, dated as of October 15, 2019, by and between the Registrant and The University of Texas System Board of Regents on behalf of The University of Texas M.D.
19 unchanged sentences
001-33038, filed November 8, 2021).
−Removed: First Amendment to the Loan and Security Agreement by and among the Registrant, the lenders party thereto and Silicon Valley Bank, as administrative agent and collateral agent, dated December 28, 2021.
−Removed: Separation Agreement, dated March 28, 2022, by and between the Registrant and Dr.
−Removed: Raffaele Baffa.
−Removed: Subsidiaries of the Registrant.
+Added: First Amendment to the Loan and Security Agreement by and among the Registrant, the lenders party thereto and Silicon Valley Bank, as administrative agent and collateral agent, dated December 28, 2021 (incorporated by reference to Exhibit 10.52 to the Registrant’s Annual Report on Form 10-K, SEC File No.
+Added: 001-33038, filed March 30, 2022).
+Added: Equity Distribution Agreement, dated August 12, 2022, by and between Piper Sandler & Co.
+Added: and the Registrant (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No.
+Added: 001-33038, filed August 15, 2022).
+Added: Underwriting Agreement, dated as of November 29, 2022, by and between Cantor Fitzgerald & Co.
+Added: and the Registrant (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K, SEC File No.
+Added: 001-33038, filed November 30, 2022).
Consent of Independent Registered Public Accounting Firm .
14 unchanged sentences
Confidential treatment has been granted by the Securities and Exchange Commission as to certain portions of this document.
−Removed: Portions of this document (indicated by “[***]”) have been omitted because they are not material and would likely cause competitive harm to Alaunos Therapeutics, Inc.
−Removed: if disclosed.
+Added: Portions of this document (indicated by “[***]”) have been omitted because such information is not material and is the type of information that the Registrant treats as private or confidential.
Form 10-K Summary
42 unchanged sentences
We have audited the accompanying balance sheets of Alaunos Therapeutics, Inc.
−Removed: and its subsidiaries (collectively, the Company) as of December 31, 2021 and 2020, the related statements of operations, stockholders’
−Removed: equity and cash flows for the years then ended, and the related notes to the financial statements (collectively, the financial statements).
+Added: and its subsidiaries (the Company) as of December 31, 2022 and 2021, the related statements of operations, stockholders' equity and cash flows for the years then ended, and the related notes to the financial statements (collectively, the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
+Added: The Company’s Ability to Continue as a Going Concern
+Added: The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
+Added: As discussed in Note 1 to the financial statements, the Company has incurred recurring operating losses since its inception and will be required to raise additional capital to fund operations.
+Added: This raises substantial doubt about the Company's ability to continue as a going concern.
+Added: Management's plans in regard to these matters also are described in Note 1.
+Added: The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
16 unchanged sentences
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Description of the Matter
−Removed: As discussed in Note 3 to the financial statements, the Company accrues costs for clinical trials and preclinical studies based upon estimates of costs incurred through the balance sheet date that have yet to be invoiced by the contract research organizations, clinical study sites, laboratories, consultants, or other vendors.
−Removed: This process involves reviewing open contracts and purchase orders, communicating with its personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated costs incurred for the services when the Company has not yet been invoiced or otherwise notified of the actual costs.
+Added: Accruals for Clinical Trials and Other Research and Development Expenses
+Added: As discussed in Note 3 to the financial statements, the Company accrues costs for clinical trials and other research and development expenses based on estimates of costs incurred through the balance sheet date that have not been invoiced by the clinical research organizations, clinical study sites, consultants, or other vendors.
+Added: This process involves reviewing open contracts and purchase orders, communicating with vendors and internal personnel to identify services that have been performed, and estimating the level of service performed and the associated costs incurred for the services when the Company has not yet been invoiced or otherwise notified of the actual costs.
The Company's accrual for clinical trial and preclinical study expenses totaled $2.4 million at December 31, 2022 as disclosed in Note 6.
−Removed: We identified the accruals for clinical trial and preclinical study expenses to be a critical audit matter because auditing the Company’s accruals for clinical trial and preclinical study expenses is complex due to the fact that information necessary to estimate the expense is accumulated from multiple sources.
−Removed: In addition, in certain circumstances, the determination of the nature and level of services that have been received during the reporting period requires judgment because the timing and pattern of vendor invoicing may not correspond to the level of services provided and there may be delays in invoicing from clinical study sites and other vendors.
+Added: We identified the accruals for clinical trials and other research and development expenses to be a critical audit matter because auditing the Company’s accruals is complex as the information necessary to make an estimate is accumulated from multiple sources and there may be delays in invoicing from clinical study sites and other vendors, or payments may depend on factors such as the completion of clinical trial milestones.
+Added: Additionally, in certain circumstances, it requires judgment, as the timing and pattern of vendor invoicing may not correspond to the level of services provided.
How We Addressed the Matter in our Audit
1 unchanged sentence
We tested the accuracy and completeness of the underlying data used in the estimates and evaluated the reasonableness of assumptions used by management.
−Removed: We inspected certain contracts with third parties and reviewed information received by the Company to test proper recording of costs incurred to date.
−Removed: We corroborated the progress of research and development activities through discussion with the Company’s research and development personnel, specifically those who oversee the projects.
−Removed: We performed analytical procedures over fluctuations in accruals by clinical trial and preclinical studies or other significant work orders throughout the year and inspected subsequent invoices received from third parties to assess the impact to the accrual.
+Added: We inspected certain contracts with third parties and related information received by the Company to test proper recording of costs incurred to date.
+Added: We corroborated the progress of research and development activities through discussion with the Company’s research and development personnel, specifically those who oversee the projects, and confirmations with the third parties.
+Added: We performed analytical procedures over fluctuations in accruals on a department level throughout the year.
+Added: We tested subsequent invoices received from third parties and cash disbursements to assess completeness of recorded accruals.
/s/ RSM US LLP
7 unchanged sentences
Cash and cash equivalents
+Added: Restricted cash
Prepaid expenses and other current assets
6 unchanged sentences
Accounts payable
−Removed: Current portion of long-term debt
+Added: Long-term debt, current
Accrued expenses
−Removed: Lease liability - current portion
+Added: Lease liability, current
Total current liabilities
Long-term debt
−Removed: Lease liability - non-current portion
+Added: Lease liability, non-current
+Added: Other non-current liabilities
Total liabilities
2 unchanged sentences
Common stock $ 0.001 par value;
−Removed: 350,000,000 shares authorized,
−Removed: 216,127,443 shares issued and outstanding at December 31, 2021 and 250,000,000 shares authorized, 214,591,906 shares issued and outstanding at December 31, 2020
+Added: 420,000,000 shares authorized, 240,410,761 shares issued and outstanding at December 31, 2022 and 350,000,000 shares authorized, 216,127,443 shares issued and outstanding at December 31, 2021
Additional paid-in capital
11 unchanged sentences
General and administrative
−Removed: Property and equipment and right-of-use asset impairment
+Added: Gain on lease modification
+Added: Property and equipment and right-of-use assets impairment
Total operating expenses
Loss from operations
+Added: Other income (expense):
+Added: Interest expense
Other income (expense), net
−Removed: Net loss applicable to common stockholders
+Added: Other income (expense), net
Basic and diluted net loss per share
−Removed: Weighted average number of common shares outstanding used to compute basic and diluted net loss per share
+Added: Weighted average common shares outstanding, basic and diluted
The accompanying notes are an integral part of these financial statements.
3 unchanged sentences
Additional Paid in Capital
−Removed: Deficit Accumulated During the Development Stage
+Added: Accumulated Deficit
Total Stockholders' Equity
2 unchanged sentences
Exercise of employee stock options
+Added: Common stock issuance
Restricted stock awards
Cancelled restricted common stock
−Removed: Issuance of common stock in connection with a public offering, net of commissions and expenses of $ 5,900
−Removed: Issuance of common stock in connection with an at the market offering, net of commissions and expenses of $ 400
+Added: Issuance of warrants
Balance at December 31, 2021
Stock-based compensation
−Removed: Exercise of employee stock options
−Removed: Common stock issuance
Restricted stock awards
Cancelled restricted common stock
−Removed: Issuance of warrants
+Added: Exercise of employee stock options
+Added: Repurchase of common stock
+Added: Issuance of common stock, net of expenses
Balance at December 31, 2022
3 unchanged sentences
(in thousands)
−Removed: For the Twelve Months Ended December 31,
+Added: For the Year Ended December 31,
Cash flows from operating activities:
3 unchanged sentences
Stock-based compensation
+Added: Decrease (increase) in the carrying amount of right-of-use assets
+Added: Gain on lease modification
+Added: Loss on sale of equipment
(Increase) decrease in:
Prepaid expenses and other current assets
−Removed: Right-of-use asset
−Removed: Other noncurrent assets
+Added: Other non-current assets
Increase (decrease) in:
2 unchanged sentences
Lease liabilities
+Added: Other non-current liabilities
Net cash used in operating activities
1 unchanged sentence
Purchases of property and equipment
+Added: Proceeds from the sale of property and equipment
Net cash used in investing activities
Cash flows from financing activities:
−Removed: Proceeds from long-term debt
−Removed: Payment of debt issuance costs
+Added: Proceeds from long-term debt borrowing
+Added: Debt issuance costs
Proceeds from the exercise of stock options
−Removed: Issuance of common stock in connection with a public offering, net
−Removed: Issuance of common stock in connection with at the market offerings, net
+Added: Proceeds from the issuance of common stock
+Added: Repurchase of common stock
+Added: Repayment of long-term debt
Net cash provided by financing activities
−Removed: Net increase (decrease) in cash and cash equivalents
−Removed: Cash and cash equivalents, beginning of period
−Removed: Cash and cash equivalents, end of period
+Added: Net decrease in cash, cash equivalents and restricted cash
+Added: Cash, cash equivalents and restricted cash, beginning of period
+Added: Cash, cash equivalents and restricted cash, end of period
Supplementary disclosure of cash flow information:
1 unchanged sentence
Amounts included in accrued expenses and accounts payable related to property and equipment
−Removed: Supplementary disclosure of noncash investing and financing activities
−Removed: Warrants issued with long-term debt
The accompanying notes are an integral part of these financial statements.
9 unchanged sentences
In May 2021, the Company announced that it will be winding down its existing Controlled IL-12 clinical program for the treatment of recurrent glioblastoma multiforme.
−Removed: The Company will continue to seek a partner for this program and has also begun exploring potential synergies between this technology and its cell therapy programs.
−Removed: Costs incurred during the year ended December 31, 2021 under the program wind-down have not been material.
−Removed: The Company has operated at a loss since its inception in 2003 and has no recurring revenue from operations. The Company anticipates that losses will continue for the foreseeable future.
−Removed: As of December 31, 2021, the Company had approximately $ 76.1  million of cash and cash equivalents.
−Removed: The Company’s accumulated deficit at December 31, 2021 was approximately $ 842.9  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 exhausted depends on its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given.
−Removed: 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.
−Removed: 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.
+Added: The Company continues to seek a partner for this program.
The Company’s amended and restated certificate of incorporation authorizes it to issue 420,000,000 shares of common stock.
As of December 31, 2022, there were 240,410,761 shares of common stock outstanding and an additional 33,330,964 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants.
+Added: The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.
+Added: The Company follows the guidance of Accounting Standards Codification, or ASC, Topic 205-40, Presentation of Financial Statements - Going Concern , in order to determine whether there is substantial doubt about its ability to continue as a going concern for one year after the date its financial statements are issued.
+Added: This evaluation initially does not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date the financial statements are issued.
+Added: When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates the substantial doubt about the Company's ability to continue as a going concern.
+Added: The mitigating effect of management's plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued.
+Added: The Company has operated at a loss since its inception in 2003 and has no recurring revenue from operations. The Company anticipates that losses will continue for the foreseeable future.
+Added: As of December 31, 2022, the Company had approximately $ 53.0  million of cash, cash equivalents and restricted cash.
+Added: The restricted cash of $ 13.9 million at December 31, 2022 is related to the Company's debt agreement (refer to Note 4, Debt ).
+Added: The Company’s accumulated deficit at December 31, 2022 was approximately $ 880.6  million. Given its current development plans and cash management efforts, the Company anticipates cash resources will be sufficient to fund operations into the fourth quarter of 2023. The Company’s ability to continue operations after its current cash resources are exhausted depends on future events, including its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given, nor are within the Company's control.
+Added: 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 until sufficient additional capital is raised.
+Added: There can be no assurances that such a plan would be successful.
+Added: Based on the current cash forecast and the Company's dependence on its ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, management has determined that the Company's present capital resources will not be sufficient to fund its planned operations for at least one year from the issuance date of the financial statements, and substantial doubt as to the Company's ability to continue as a going concern exists.
+Added: This forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of expenses could vary materially and adversely as a result of a number of factors.
Alaunos Therapeutics, Inc.
1 unchanged sentence
2021 Loan and Security Agreement
−Removed: 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 "Loan and Security Agreement").
−Removed: The Loan and Security Agreement provided for an initial term loan of $ 25.0 million funded at the closing ("Term A Tranche"), with an additional tranche of $ 25.0 million available if certain funding and clinical milestones were met by August 31, 2022 ("Term B Tranche").
−Removed: Effective December 28, 2021, the Company, entered into a First Amendment (the “Amendment”) to the Loan and Security Agreement (the "Amended Loan and Security Agreement").
−Removed: The Amended Loan and Security Agreement extends the interest-only period through August 31, 2022, and provides for an automatic extension through August 31, 2023, if certain funding and clinical milestones are met by August 31, 2022 (the “Amended Milestones”).
−Removed: The Amendment eliminated the Term B Tranche, which remained unfunded, leaving only the Term A Tranche (the "SVB Facility").
+Added: On August 6, 2021, the Company entered into a Loan and Security Agreement, or the Loan and Security Agreement, with Silicon Valley Bank and affiliates of Silicon Valley Bank, or collectively, SVB.
+Added: The Loan and Security Agreement provided for an initial term loan of $ 25.0 million funded at the closing, or the Term A Tranche, with an additional tranche of $ 25.0 million available if certain funding and clinical milestones were met by August 31, 2022, or the Term B Tranche.
+Added: Effective December 28, 2021, the Company, entered into a First Amendment to the Loan and Security Agreement.
+Added: We refer to the Loan and Security Agreement, as so amended, as the Amended Loan and Security Agreement.
+Added: The Amended Loan and Security Agreement extended the interest-only period through August 31, 2022.
+Added: Certain milestones specified in the Amended Loan and Security Agreement were not met by the Company on or prior to August 31, 2022, and therefore, the interest-only period was not extended beyond August 31, 2022.
+Added: The Amended Loan and Security Agreement also eliminated the Term B Tranche, which remained unfunded, leaving only the Term A Tranche, or the SVB Facility.
Under the Amended Loan and Security Agreement, the SVB Facility will mature on August 1, 2023.
−Removed: however, if the Company achieves the Amended Milestones on or prior to August 31, 2022, then the maturity will automatically extend to August 1, 2024.
−Removed: Please refer to Note 4, Debt, for further discussion of the Loan and Security Agreement and the Amended Loan and Security Agreement.
−Removed: February 2020 Public Offering
−Removed: On February 5, 2020, the Company issued and sold 27,826,086 shares of its common stock at an offering price to the public of $ 3.25 per share, for aggregate net proceeds of approximately $ 84.8 million after deducting underwriting discounts and offering expenses paid by the Company.
−Removed: The offering was made pursuant to the Company's effective registration statement on Form S-3ASR (File No.
−Removed: 333-232283) previously filed with the Securities and Exchange Commission (the “SEC”) and a prospectus supplement thereunder.
−Removed: On March 10, 2020, the underwriters exercised their option to purchase an additional 1,284,025 shares.
−Removed: The net proceeds were approximately $ 3.9 million after deducting underwriting discounts and offering expenses paid by us.
−Removed: At-the-Market Offering Program
−Removed: In June 2019, the Company entered into an Open Market Sale Agreement (the "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.
−Removed: Shares will be sold pursuant to the Company’s effective registration statement on Form S-3ASR (File No.
−Removed: 333-232283), as previously filed with the SEC.
−Removed: There were no sales under the Sales Agreement during the year ended December 31, 2021.
−Removed: D uring the year ended December 31, 2020, the Company issued and sold an aggregate of 2,814,673 shares for aggregate net proceeds of approximately $ 13.0 million after deducting underwriting discounts and offering expenses payable by us.
+Added: Refer to Note 4, Debt, for further discussion of the Loan and Security Agreement and the Amended Loan and Security Agreement.
+Added: 2022 Equity Distribution Agreement
+Added: On August 12, 2022, the Company entered into an Equity Distribution Agreement, or the Equity Distribution Agreement, with Piper Sandler & Co., or Piper Sandler, pursuant to which the Company can offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 50.0 million through Piper Sandler as its sales agent in an "at the market offering." Piper Sandler will receive a commission of 3.0 % of the gross proceeds of any common stock sold under the Equity Distribution Agreement.
+Added: During the year ended December 31, 2022, there have been no sales of the Company's common stock under the Equity Distribution Agreement.
+Added: 2022 Public Offering
+Added: On November 29, 2022, the Company entered into an underwriting agreement, or the Underwriting Agreement, with Cantor Fitzgerald & Co., or the Underwriter, as the sole underwriter, relating to the issuance and sale in an underwritten offering, or the Offering, of 24,228,719 shares, or the Firm Shares, of the Company’s common stock to the Underwriter at a price of $ 0.6191 per share.
+Added: The net proceeds to the Company from the Offering were $ 14.7 million (before accounting for the partial exercise of the Underwriter's option as described below) after deducting underwriting discounts and commissions and offering expenses payable by the Company.
+Added: Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days , to purchase up to an additional 3,634,307 shares of common stock, which we refer to, together with the Firm Shares, as the Shares, at the same price per share as the Firm Shares.
+Added: On January 5, 2023, the Underwriter partially exercised its option to purchase 216,294 shares of common stock.
+Added: All of the Shares sold in the Offering were sold by the Company.
Summary of Significant Accounting Policies
6 unchanged sentences
Changes in estimates are recorded in the period in which they become known.
−Removed: The Company’s most significant estimates and judgments used in the preparation of the financial statements are:
Alaunos Therapeutics, Inc.
NOTES TO FINANCIAL STATEMENTS
+Added: The Company’s most significant estimates and judgments used in the preparation of the financial statements are:
Clinical trial expenses and other research and development expenses;
2 unchanged sentences
Income taxes.
−Removed: Impact of COVID-19 Pandemic
−Removed: 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.
−Removed: 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.
−Removed: In response to the COVID-19 pandemic, the Company has implemented policies at its locations to mitigate the risk of exposure to COVID-19 by its personnel, including restrictions on the number of staff in any given research and development laboratory and a work-from-home policy applicable to the majority of its personnel.
−Removed: The extent to which the COVID-19 pandemic impacts the Company’s business, clinical development and regulatory efforts and the value of its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements, and the effectiveness of actions taken globally to contain and treat the disease.
−Removed: The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the COVID-19 pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.
Subsequent Events
−Removed: The Company evaluated all events and transactions that occurred after the balance sheet date through the date of the Annual Report.
+Added: The Company evaluated all events and transactions that occurred after the balance sheet date through the date of this Annual Report on Form 10-K.
The Company did not have any material subsequent events that impacted its financial statements or disclosures.
−Removed: Organizational Changes
−Removed: On February 25, 2021, the Company announced that Heidi Hagen, formerly the Lead Independent Director, was appointed Interim Chief Executive Officer, replacing Laurence Cooper, M.D., Ph.D.
−Removed: Hagen also remained a member of the board of directors.
−Removed: Cooper also stepped down from his seat on the board of directors and has continued to support the Company’s research and development, or “R&D,”
−Removed: programs as a consultant.
−Removed: On August 22, 2021, the board of directors appointed Kevin S.
−Removed: Boyle, Sr., as Chief Executive Officer of the Company, effective August 30, 2021.
−Removed: Effective upon Mr.
−Removed: Boyle's employment, Ms.
−Removed: Hagen resigned as the Company's Interim Chief Executive Officer but continued to serve as a member of the board of directors.
−Removed: Hagen resigned as member of the board of directors effective November 2, 2021.
−Removed: On November 4, 2021, the Company provided written notice of termination of the consulting agreement by and between the Company and Danforth Advisors, LLC, a financial consultancy firm specializing in working with life sciences companies (the “Cunningham Consulting Agreement”).
−Removed: Pursuant to the terms of the Cunningham Consulting Agreement, Tim Cunningham, the Company’s interim Chief Financial Officer and principal financial officer, provided services to the Company.
Cash and Cash Equivalents
8 unchanged sentences
Property and Equipment
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
Property and equipment are stated at cost, less accumulated depreciation and amortization.
7 unchanged sentences
Repairs and maintenance that do not extend the useful life of the asset are expensed as incurred.
−Removed: Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included on its Statements of Operations.
+Added: Upon sale, retirement or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included in the Statements of Operations.
Long-Lived Assets
Assessments of long-lived assets and the remaining useful lives of such long-lived assets are reviewed for impairment whenever a triggering event occurs or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
−Removed: An asset, or group of assets, are considered to be impaired when the undiscounted estimated net cash flows expected to be generated by the asset, or group of assets, are less than its carrying amount.
+Added: An asset, or group of assets, is considered to be impaired when the undiscounted estimated net cash flows expected to be generated by the asset, or group of assets, are less than its carrying amount.
The impairment recognized is the amount by which the carrying amount exceeds the fair market value of the impaired asset, or group of assets, based on the present value of the expected future cash flows associated with the use of the asset.
Operating Segments
−Removed: Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, the Company’s chief operating decision maker, in making decisions regarding resource allocation and assessing performance.
−Removed: The Company views its operations and manages its business in one operating segment and does not track expenses on a program-by-program basis.
+Added: Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the Company’s chief operating decision maker, in making decisions regarding resource allocation and assessing performance.
+Added: The Company views its operations and manages its business in one operating segment.
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
The Company assesses whether warrants issued require accounting as derivatives.
The Company determined that the warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’
−Removed: equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging .
+Added: equity in accordance with Financial Accounting Standards Board, or FASB, 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’
7 unchanged sentences
Assets and liabilities measured at fair value on a recurring and nonrecurring basis as of December 31, 2022 and 2021 are as follows:
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
($ in thousands)
5 unchanged sentences
Assets/Liabilities
−Removed: Significant Other
Cash equivalents
6 unchanged sentences
Assets/Liabilities
−Removed: Significant Other
Cash equivalents
The cash equivalents represent demand deposit accounts and deposits in a short-term United States treasury money market mutual fund quoted in an active market and classified as a Level 1 asset.
+Added: There have been no changes to the valuation methods during the years ended December 31, 2022 and 2021.
+Added: The Company had no financial assets or liabilities that were classified as Level 2 or Level 3 during the years ended December 31, 2022 and 2021.
Fair value of non-financial instruments
4 unchanged sentences
In addition, the Company impaired approximately $ 0.1 million of leasehold improvements and various other assets associated with its decision to close the Company's Boston office.
−Removed: Refer to Note 8 for further details.
+Added: Refer to Note 8, Leases, for further details.
Revenue Recognition from Collaboration Agreements
−Removed: Revenue for the year ended December 31, 2021 consisted of $0.4 million and for the year ended December 31, 2020 consisted of $ 0 .
−Removed: For the year ended December 31, 2021, the Company recognized revenue through its Collaboration Agreement with Solasia Pharma K.K.
−Removed: due to the achievement of a milestone, as further described in Note 9, Commitments and Contingencies.
+Added: Revenue for the year ended December 31, 2022 consisted of $ 2.9 million and for the year ended December 31, 2021 consisted of $ 0.4 million.
+Added: For the years ended December 31, 2022 and 2021, the Company recognized revenue through its Collaboration Agreement with Solasia Pharma K.K.
+Added: primarily due to the achievement of milestones, as further described in Note 9, Commitments and Contingencies.
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
The Company primarily generates revenue through collaboration arrangements with strategic partners for the development and commercialization of product candidates.
−Removed: The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
+Added: The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, or ASC 606.
The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods and/or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and/or services.
4 unchanged sentences
If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.
−Removed: For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
+Added: For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.
Contracts that include an option to acquire additional goods and/or services are evaluated to determine if such option provides a material right to the customer that it would not have received without entering into the contract.
19 unchanged sentences
Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer.
−Removed: For performance obligations that are satisfied over time, the Company recognizes revenue by measuring the progress toward complete satisfaction of the performance obligation using a single method of measuring progress which depicts the performance in transferring control of the associated goods and/or services to the customer.
+Added: For performance obligations that are satisfied over time, the Company recognizes revenue by measuring the progress toward complete satisfaction of the performance obligation
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: using a single method of measuring progress which depicts the performance in transferring control of the associated goods and/or services to the customer.
The Company uses input methods to measure the progress toward the complete satisfaction of performance obligations satisfied over time.
9 unchanged sentences
clinical research organizations, or CROs, in connection with performing research services on its behalf and clinical trials;
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
investigative sites or other providers in connection with clinical trials;
−Removed: vendors in connection with preclinical and clinical development activities, and
+Added: vendors in connection with preclinical and clinical development activities;
vendors related to product manufacturing, development, and distribution of preclinical and clinical supplies.
−Removed: The Company bases its expenses related to preclinical studies and clinical trials on its estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs that conduct and manage clinical trials on its behalf.
+Added: The Company bases its expenses related to preclinical studies and clinical trials on its estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that conduct and manage clinical trials on its behalf.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.
13 unchanged sentences
The Company evaluates this tax position on an annual basis.
−Removed: The Company also accrues for potential interest and penalties, related to unrecognized tax benefits in income tax expense (Note 12).
+Added: The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense (Refer to Note 12, Income Taxes ).
Accounting for Stock-Based Compensation
2 unchanged sentences
Consistent with prior years, the Company uses the Black-Scholes option pricing model, which requires estimates of the expected term option holders will retain their options before exercising them and the estimated volatility of the Company’s common stock price over the expected term.
−Removed: The Company recognizes the full impact of its share-based employee payment plans in the statements of operations for each of the years ended December 31, 2021 and 2020 and did not capitalize any such costs on the balance sheets.
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: The Company recognized the full impact of its share-based employee payment plans in the Statements of Operations for each of the years ended December 31, 2022 and 2021 and did not capitalize any such costs on the Balance Sheets.
The Company recognized $ 3.0 million of compensation expense related to stock options for the year ended December 31, 2022 and $ 7.4 million of compensation expense related to stock options for the year ended December 31, 2021.
−Removed: The Company recognized $ 3.4 million of compensation expense, related to restricted stock for the year ended December 31, 2021 and $ 2.5 million for the year ended December 31, 2020 (Note 13).
+Added: The Company recognized $ 0.5 million of compensation expense, related to restricted stock for the year ended December 31, 2022 and $ 3.4 million for the year ended December 31, 2021 (refer to Note 13, Stock Option Plan ).
The total compensation expense relating to vesting of stock options and restricted stock awards for the year ended December 31, 2022 was $ 3.5 million and $ 10.8 million for the year ended December 31, 2021.
4 unchanged sentences
General and administrative
−Removed: Share based employee compensation expense
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
+Added: Stock-based compensation expense
The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model.
−Removed: The estimated weighted-average fair value of stock options granted to employees in 2021 was approximately $ 2.62 per share and was approximately $ 2.15 per share for the year ended December 31, 2020.
+Added: The estimated weighted-average fair value of stock options granted to employees in the year ended December 31, 2022 was approximately $ 0.77 per share and was approximately $ 2.62 per share for the year ended December 31, 2021.
Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model.
6 unchanged sentences
The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:
+Added: Year Ended December 31,
Risk-free interest rate
−Removed: 0.50 - 1.36 %
−Removed: 0.36 - 1.68 %
+Added: 1.63 –
+Added: 0.50 –
Expected life in years
+Added: 5.27 –
+Added: 5.50 –
Expected volatility
−Removed: 72.53 - 74.80 %
−Removed: 71.11 - 74.41 %
+Added: 74.49 –
+Added: 72.53 –
Expected dividend yield
4 unchanged sentences
The computation of basic and diluted net loss per share consists of the following:
−Removed: For the Year Ended December 31,
+Added: Year Ended December 31,
Weighted-average common shares outstanding, basic and diluted
2 unchanged sentences
Such potential common shares on December 31, 2022 and 2021 consist of the following:
−Removed: Stock options
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: Common stock options
Inducement stock options
1 unchanged sentence
New Accounting Pronouncements
−Removed: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes.
−Removed: ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application.
−Removed: The Company adopted this standard effective January 1, 2021, with no material impact upon adoptio n.
+Added: In November 2021, the FASB issued Accounting Standards Update, or ASU, 2021-10, Government Assistance (Topic 832):
+Added: Disclosures by Business entities about Government Assistance, which requires business entities to disclose information about certain government assistance that they receive.
+Added: Entities must comply with the new disclosure requirements if they account for transactions with government entities under the (1) contribution model or (2) grant model by analogy.
+Added: The Company adopted this standard effective January 1, 2022, with no material impact upon adoption.
+Added: In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842):
+Added: Lessors –
+Added: Certain Leases with Variable Lease Payments, which requires lessors to classify as operating leases those leases with variable lease payments that do not depend on an index or rate if another classification (i.e.
+Added: sales-type or direct financing) would result in a commencement date (‘day 1’) selling loss.
+Added: The Company adopted this standard effective January 1, 2022, with no material impact upon adoption.
+Added: In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815- 40):
+Added: Warrant modifications, which clarifies an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options (e.g.
+Added: warrants) that remain equity-classified after modification or exchange.
+Added: The Company adopted this standard effective January 1, 2022, with no material impact upon adoption.
The carrying values of the Company's debt obligation were as follows:
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
($ in thousands)
1 unchanged sentence
Unamortized discount on Loan and Security Agreement
−Removed: current portion of long-term debt
+Added: long-term debt, current
Long-term debt
−Removed: On August 6, 2021, the Company entered into a Loan and Security Agreement with SVB, or the Loan and Security Agreement.
+Added: On August 6, 2021, the Company entered into the Loan and Security Agreement.
The Loan and Security Agreement provided 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 were met by August 31, 2022.
−Removed: On December 28, 2021, the Company entered into a First Amendment, (the “Amendment”) to the Loan and Security Agreement (the “Amended Loan and Security Agreement”).
+Added: On December 28, 2021, the Company entered into the Amended Loan and Security Agreement.
Under the terms of the Amended Loan and Security Agreement, the SVB Facility was modified to eliminate the additional $25.0 million tranche, which remained unfunded, leaving only the initial $25.0 million as the full amount available under the SVB Facility.
2 unchanged sentences
As of December 31, 2022, interest on the outstanding loans was 12.00 %.
−Removed: The Amended Loan and Security Agreement provides for an interest-only period which extends through August 31, 2022 and may be automatically extended through August 31, 2023 if, on or prior to August 31, 2022, SVB receives evidence satisfactory to it, confirming that the Company has (i) received at least $ 50.0 million in net cash proceeds from the sale of the Company’s equity securities after the date of the Amended Loan and Security Agreement, on terms and conditions acceptable to SVB, and (ii) achieved positive data in the first cohort of the Library TCR-T Trial endorsed by an independent safety monitoring committee as a safe dose to proceed (together, the “Amended Milestones”).
−Removed: After the interest-only payment period, aggregate outstanding borrowings are payable in twelve consecutive, equal monthly installments of principal plus accrued interest.
−Removed: All outstanding principal and accrued and unpaid interest under the SVB Facility and all other outstanding obligations under the Amended Loan and Security Agreement are due and payable on August 1, 2023 ;
−Removed: however, if the Company achieves the Amended Milestones on or prior to August 31, 2022, then the maturity will be automatically extended to August 1, 2024 .
−Removed: 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.
−Removed: We are permitted to make up to two prepayments, subject to the prepayment premium, of the SVB Facility, each payment of at least $ 5.0 million.
−Removed: Such prepayment premium would be 3.00 % of the principal amount of the SVB Facility if prepaid prior to the first anniversary of the effective date, 2.00 % of the principal amount of the SVB Facility if prepaid on or after the first anniversary of the effective date but prior to the second anniversary of the effective date and 1.00 % of the principal amount of the SVB Facility if prepaid on or after the second anniversary of the effective date but prior to the maturity date.
−Removed: No amount that has been repaid may be reborrowed.
−Removed: The Loan and Security Agreement required the Company to cash collateralize half of the sum of the outstanding principal amount of the term loans, plus an amount equal to 5.75 % of the original principal amount of any portion of the SVB Facility actually extended, if the Company failed to achieve certain fundraising milestones on or prior to December 31, 2021.
−Removed: The Amended Loan and Security Agreement revised the Company's cash collateralization obligation to require the Company to cash collateralize half of the sum of only the then-outstanding principal amount of the SVB Facility, plus an amount equal to 5.75 % of the original principal amount of the SVB Facility if the Company does not achieve the Amended Milestones on or prior to August 31, 2022.
−Removed: In the event a cash collateralization were to occur, so long as no event of default has occurred and, after subtracting the eighth scheduled payment of principal and interest on the SVB Facility, the sum of the aggregate of outstanding principal and accrued and unpaid interest, plus the final payment, is equal to or less than $ 9,770,933 , then, within ten business days of the date of receipt of the eighth scheduled payment of principal and interest on the SVB Facility, SVB will release $ 2.5 million from the collateral account, so long as the balance in the collateral account after the release would equal or exceed $ 10.0 million.
−Removed: If no event of default has occurred and, after subtracting the tenth scheduled payment of principal and interest on the SVB Facility, the sum of the aggregate of outstanding principal and accrued and unpaid interest, plus the final payment, is equal to or less than $ 5,604,167 , then, within ten business days of the date of receipt of the tenth scheduled payment of principal and interest on the SVB Facility, SVB will release a further $ 4.0 million from the collateral account, so long as the balance in the collateral account after the release would equal or exceed $ 6.0 million.
−Removed: The SVB Facility and related obligations under the Amended Loan and Security Agreement are secured by substantially all of the Company’s properties, rights and assets, except for its intellectual property (which is subject to a negative pledge under the Amended Loan and Security Agreement).
−Removed: In addition, the Amended Loan and Security Agreement contains customary representations, warranties, events of default and covenants.
+Added: The Amended Loan and Security Agreement provided for an interest-only period through August 31, 2022.
+Added: Commencing on September 1, 2022, aggregate outstanding borrowings became repayable in twelve consecutive, equal monthly installments of principal plus accrued interest.
+Added: All outstanding obligations under the Amended Loan and Security Agreement are due and payable on August 1, 2023 .
+Added: The Company will also owe SVB 5.75 % of the original principal amounts borrowed as a final payment.
+Added: The Company is permitted to make up to two prepayments, subject to a prepayment premium of the amount being prepaid, ranging from 1.00 % to 2.00 %, of the SVB Facility, each such prepayment to be at least $ 5.0 million plus all accrued and unpaid interest on the portion being prepaid.
Alaunos Therapeutics, Inc.
NOTES TO FINANCIAL STATEMENTS
−Removed: In connection with its entry into the Loan and Security Agreement, the Company issued to SVB warrants to purchase (i) up to 432,844 shares of the Company’s common stock, par value $ 0.001 per share in the aggregate, and (ii) up to an additional 432,842 shares of common stock, in the aggregate, in the event the Company achieves certain clinical milestones, in each case at an exercise price per share of $ 2.22 .
−Removed: In connection with the entry into the Amendment, the Company amended and restated the warrants issued to SVB.
+Added: As a result of not achieving certain milestones specified in the Amended Loan and Security Agreement on or prior to August 31, 2022, the Company was required to cash collateralize half of the sum of the then-outstanding principal amount of the SVB Facility, plus an amount equal to 5.75 % of the original principal amount of the SVB Facility.
+Added: As of December 31, 2022, the Company has collateralized $ 13.9 million, which is classified as restricted cash on the Balance Sheet.
+Added: So long as no event of default has occurred and subject to certain other terms related to the remaining outstanding balance under the SVB Facility being satisfied, $ 2.5 million will be released from the collateral account following the eighth scheduled payment of principal and interest, and a further $ 4.0 million will be released following the tenth scheduled payment of principal and interest.
+Added: The SVB Facility and related obligations under the Amended Loan and Security Agreement are secured by substantially all of the Company’s properties, rights and assets, except for its intellectual property (which is subject to a negative pledge under the Amended Loan and Security Agreement).
+Added: In addition, the Amended Loan and Security Agreement contains customary representations, warranties, events of default and covenants.
+Added: In connection with its entry into the Loan and Security Agreement, the Company issued to SVB warrants to purchase (i) up to 432,844 shares of the Company’s common stock, in the aggregate, and (ii) up to an additional 432,842 shares of common stock, in the aggregate, in the event the Company achieved certain clinical milestones, in each case at an exercise price per share of $ 2.22 .
+Added: In connection with its entry into the Amended Loan and Security Agreement, the Company amended and restated the warrants issued to SVB.
As amended and restated, the warrants are for up to 649,615 shares of the Company's common stock, in the aggregate, at an exercise price per share of $ 1.16 , or the SVB Warrants.
1 unchanged sentence
The issuance costs for the Loan and Security Agreement, including the Amended Loan and Security Agreement, were approximately $ 1.2 million and primarily related to the warrants issued to SVB, which will be amortized into interest expense over the period to August 1, 2023 .
−Removed: Interest expense, including the amortization of issuance costs, was $ 1.2 million for the year ended December 31, 2021.
−Removed: The fair value of the Amended Loan and Security Agreement as of December 31, 2021 approximates its face value due to proximity to the transaction.
+Added: Interest expense, including the amortization of issuance costs, was $ 3.2 million for the year ended December 31, 2022 and $ 1.2 million for the year ended December 31, 2021.
+Added: The fair value of the Amended Loan and Security Agreement as of December 31, 2022 approximates its face value.
Property and Equipment, net
4 unchanged sentences
Laboratory equipment
−Removed: Construction-in-progress
accumulated depreciation
Property and equipment, net
−Removed: Depreciation expense charged to the statement of operations for the year ended December 31, 2021 was $ 2.6 million and was $ 1.1 million for the year ended December 31, 2020.
+Added: Depreciation expense for the year ended December 31, 2022 was $ 2.8 million and was $ 2.6 million for the year ended December 31, 2021.
During the year ended December 31, 2021, the Company impaired property and equipment by $ 0.1 million.
7 unchanged sentences
Manufacturing services
−Removed: Accrued vacation
−Removed: Payroll taxes and benefits
Other consulting services
2 unchanged sentences
Related Party Transactions
−Removed: Collaboration with PGEN and MD Anderson
−Removed: On January 13, 2015, the Company, together with Precigen, entered into the MD Anderson License with MD Anderson (which Precigen subsequently assigned to PGEN).
−Removed: 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.
−Removed: 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.
−Removed: During the year ended December 31, 2021, the Company made payments of $ 0.1 million to MD Anderson compared to $ 0 during the year ended December 31, 2020.
−Removed: The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs for the year ended December 31, 2021 was $ 0 and for the year ended December 31, 2020 was $ 8.1 million, which is included in other current assets on the Company’s balance sheet.
Collaboration with Vineti Inc.
−Removed: On July 9, 2020, the Company entered into a master service agreement and statement of work with Vineti, Inc., ("Vineti").
+Added: On July 9, 2020, the Company entered into a master service agreement and statement of work with Vineti, Inc., or Vineti.
Pursuant to the agreements, Vineti is developing a software platform to coordinate and orchestrate the order, cell collection and manufacturing process for the Company’s T-cell therapy, or TCR-T, clinical programs.
−Removed: Heidi Hagen, who became a director of the Company in June 2019 and resigned November 2, 2021 and the Company's Interim Chief Executive Officer on February 25, 2021 and resigned on August 30, 2021, is a co-founder and former officer, of Vineti.
−Removed: During the year ended December 31, 2021, the Company recorded expenses of approximately $ 0.4 million and during the year ended December 31, 2020, the Company recorded expenses of approximately $ 29,000 , for services performed by Vineti.
+Added: Heidi Hagen, who became a director of the Company in June 2019 and resigned November 2, 2021 and was appointed the Company's interim Chief Executive Officer on February 25, 2021 and resigned on August 30, 2021, is a co-founder and former officer, of Vineti.
+Added: During the year ended December 31, 2022, the Company did no t incur expenses for services performed by Vineti, compared to $ 0.4 million during the year ended December 31, 2021.
WaterMill Settlement Agreement
1 unchanged sentence
and Robert W.
−Removed: Postma (collectively, the "WaterMill Parties").
+Added: Postma, or collectively, the WaterMill Parties.
Pursuant to the Settlement Agreement, the Company increased the size of its board of directors from eight to nine directors and appointed Mr.
Postma to fill the newly created directorship.
−Removed: In accordance with the Settlement Agreement, we agreed to reimburse the WaterMill Parties for up to $400,000 of their reasonable out-of-pocket expenses out of a total of approximately $ 650,000 in fees and expenses actually incurred by the WaterMill Parties in connection with (i) the WaterMill Parties' solicitation of written consents from our stockholders to vote in favor of certain proposals, as set forth in the definitive consent statement filed by the WaterMill Parties on October 30, 2020, and (ii) the negotiation, execution, and effectuation of the Settlement Agreement.
−Removed: As of February 19, 2021, we have fully reimbursed the WaterMill Parties an aggregate amount of $ 400,000 .
+Added: In accordance with the Settlement Agreement, the Company agreed to reimburse the WaterMill Parties for up to $ 0.4 million of their reasonable out-of-pocket expenses in connection with (i) the WaterMill Parties' solicitation of written consents from our stockholders to vote in favor of certain proposals, as set forth in the definitive consent statement filed by the WaterMill Parties on October 30, 2020, and (ii) the negotiation, execution, and effectuation of the Settlement Agreement.
+Added: As of February 19, 2021, the Company has fully reimbursed the WaterMill Parties an aggregate amount of $ 0.4 million.
Joint Venture with TriArm Therapeutics/Eden BioCell
−Removed: On December 18, 2018, the Company and TriArm Therapeutics, Ltd.
−Removed: (“TriArm”) launched Eden BioCell, Ltd.
−Removed: (“Eden BioCell”) as a joint venture to lead commercialization of the Company’s Sleeping Beauty -generated CAR-T therapies in the People’s Republic of China (including Macau and Hong Kong), Taiwan and Korea.
+Added: On December 18, 2018, the Company and TriArm Therapeutics, Ltd., or TriArm, launched Eden BioCell, Ltd., or Eden BioCell, as a joint venture to lead commercialization of the Company’s Sleeping Beauty -generated CAR-T therapies in the People’s Republic of China (including Macau and Hong Kong), Taiwan and Korea.
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.
2 unchanged sentences
TriArm also manages all clinical development in the territory pursuant to a master services agreement between TriArm and Eden BioCell.
−Removed: 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.
−Removed: Huang also serves as a member of Eden BioCell’s board of directors.
+Added: James Huang was the founder and serves as managing partner of Panacea Venture, which is an investor in TriArm.
+Added: Huang is the Chair of the Company's board of directors and has been a director since July 2020.
+Added: He also serves as a member of Eden BioCell’s board of directors.
For the years ended December 31, 2022 and 2021, Eden BioCell incurred a net loss and the Company continues to have no commitment to fund its operations.
In September 2021, TriArm and Alaunos mutually agreed to dissolve the Eden BioCell joint venture.
+Added: The joint venture agreement has been terminated and the Eden BioCell entity is in the process of being dissolved.
Refer to Note 15, Joint Venture , for further details.
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
Operating Leases
−Removed: In June 2012, the Company entered into a master lease for the Company’s office in Boston, Massachusetts, which was originally set to expire in August 2016 , but renewed through August 31, 2021.
−Removed: On April 22, 2021, the Company extended its lease for a portion of office space currently held at the Company's office space in Boston.
−Removed: The renewal of the portion of the Company's office space was originally set to expire on August 31, 2021, but has now been extended through August 31, 2026 .
+Added: In June 2012, the Company entered into a master lease for the Company’s office in Boston, Massachusetts, which was originally set to expire in August 2016 , but was renewed through August 31, 2021.
+Added: On April 22, 2021, the Company extended its lease for a portion of office space in Boston.
+Added: The renewal of the portion of the Company's office space was originally set to expire on August 31, 2021, but was extended through August 31, 2026 .
As of December 31, 2022, and December 31, 2021, a total security deposit of $ 0.1 million is included in deposits on the Company’s balance sheet.
1 unchanged sentence
As described in Note 3, Summary of Significant Accounting Policies, the Company's change in the intended use of the Boston office represented an indicator of impairment.
−Removed: We determined the aggregate carrying value of the asset group (approximately $ 1.4 million) was in excess of the aggregate estimated fair value and recorded an impairment charge of $ 0.6 million to the right-of-use asset and approximately $ 0.1 million to associated property and equipment.
+Added: The Company determined the aggregate carrying value of the asset group (approximately $ 1.4 million as of December 31, 2021) was in excess of the aggregate estimated fair value and recorded an impairment charge of $ 0.6 million to the right-of-use asset and approximately $ 0.1 million to associated property and equipment during the year ended December 31, 2021.
The fair value was determined based on the amount and timing of estimated net future cash flows, discounted at a risk-adjusted rate of 10 %.
−Removed: The Boston office has been fully vacated as of December 31, 2021.
−Removed: On January 30, 2018, the Company entered into a lease agreement for office space in Houston, Texas at MD Anderson.
−Removed: Under the terms of the Houston lease agreement, the Company leased approximately 210 square feet and was required to make rental payments at an average monthly rate of approximately $ 1,000 .
−Removed: This lease was terminated effective March 31, 2020.
On March 12, 2019, the Company entered into a lease agreement for office and lab space in Houston, Texas at MD Anderson through April 2021 .
−Removed: Under the terms of the lease agreement, the Company leases approximately 1,038 square feet and was required to make rental payments at an average monthly rate of approximately $ 2,000 through April 2021.
+Added: Under the terms of the lease agreement, the Company leases approximately 1,038 square feet and was required to make rental payments
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: at an average monthly rate of approximately $ 2 thousand through April 2021.
On October 15, 2019, the Company entered into a lease agreement for additional office and laboratory space in Houston through February 2027 .
−Removed: Under the terms of the 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.
+Added: Under the terms of the lease, the Company leases from MD Anderson, approximately 8,443 square feet and is initially required to make rental payments of approximately $ 17 thousand per month through February 2027, subject to an annual base rent increase of approximately 3.0 % throughout the term.
Effective April 7, 2020, the Company leased an additional 5,594 square feet from MD Anderson.
−Removed: 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.
−Removed: On December 15, 2020, we entered into a second agreement with MD Anderson to lease additional space on MD Anderson’s campus (the “2020 Lease”).
−Removed: As of December 31, 2021, the Company has approximately 32,148 square feet under lease from MD Anderson.
−Removed: 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.
−Removed: The 2020 Lease may be extended for one additional five-year term at our election.
+Added: The Company is initially required to make rental payments of approximately $ 12 thousand per month through February 2027 , subject to an annual base rent increase of approximately 3.0 % throughout the term.
+Added: On December 15, 2020, the Company entered into a second agreement with MD Anderson to lease additional space on MD Anderson’s campus (the “2020 Lease”).
+Added: The Company is initially required to make rental payments of approximately $ 37 thousand per month through April 2028, subject to an annual base rent increase of approximately 3.0 % throughout the term beginning in April 2023.
+Added: The 2020 Lease may be extended for one additional five-year term at the Company's election.
+Added: In April 2022, the Company modified the 2020 Lease, which reduced the Company's leased space from 18,111 square feet to 3,228 square feet.
+Added: As a result, the associated lease liability and right-of-use asset were remeasured to $ 0.4 million based on revised lease payments.
+Added: A gain of $ 0.1 million was recorded on the lease modification during the year ended December 31, 2022.
+Added: The Company is initially required to make payments of approximately $ 7 thousand per month through April 2028, subject to an annual base rent increase of approximately 3.0 % throughout the term.
+Added: The 2020 Lease may be extended for one additional five-year term at the Company's election.
The components of lease expense were as follows:
5 unchanged sentences
Weighted-average discount rate
−Removed: Cash paid for amounts included in the measurement of the lease liabilities were $ 1.3 million for the year-ended December 31, 2021.
−Removed: The Company recognized new operating lease assets obtained in exchange for operating lease liabilities of $ 1.4 million for the year-ended December 31, 2021.
+Added: The Company paid $ 0.8 million for amounts included in the measurement of the lease liabilities for the year-ended December 31, 2022.
+Added: The Company did no t recognize new operating lease assets obtained in exchange for operating lease liabilities for the year-ended December 31, 2022.
As of December 31, 2022, the maturities of the Company’s operating lease liabilities were as follows (in thousands):
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
Maturity of Lease Liabilities
3 unchanged sentences
Present value of lease payments
+Added: In June 2022, the Company executed an agreement to sub-sublease 4,772 square feet of subleased office space in Boston.
+Added: The term of the sub-sublease is from July 1, 2022 to June 30, 2025 and provides the sub-subtenant with an option to extend through to July 31, 2026.
+Added: For the year ended December 31, 2022, the Company recognized $ 0.1 million in lease income, which is classified within other income (expense), net in the Statement of Operations.
+Added: Under the current terms of the agreement, lease income for the remainder of the sub-sublease term is expected to be $ 0.2 million in 2023, $ 0.2 million in 2024 and $ 0.1 million in 2025.
Commitments and Contingencies
−Removed: License Agreements
Exclusive License Agreement with PGEN Therapeutics
On October 5, 2018, the Company entered into an exclusive license agreement, or License Agreement, with PGEN Therapeutics, or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation.
−Removed: As between the Company and PGEN, the terms of the License Agreement replaced and superseded the terms of:
−Removed: (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;
−Removed: (b) certain rights and obligations pursuant to that certain License and Collaboration Agreement effective March 27, 2015 between the Company, 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;
−Removed: (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;
−Removed: 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 2015 R&D Agreement, and any amendments or statements of work thereto.
−Removed: Pursuant to the terms of the License Agreement, the Company has exclusive, worldwide rights to research, develop and commercialize (i) TCR products designed for neoantigens for the treatment of cancer, (ii) products utilizing Precigen’s RheoSwitch® gene switch, or RTS, for the treatment of cancer, referred to as IL-12 Products and (iii) CAR products directed to (A) CD19 for the treatment of cancer, referred to as CD19 Products, and (B) BCMA for the treatment of cancer, subject to certain obligations to pursue such target under the Ares Trading Agreement.
+Added: Pursuant to the terms of the
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: License Agreement, the Company has exclusive, worldwide rights to research, develop and commercialize (i) TCR products designed for neoantigens for the treatment of cancer, (ii) products utilizing Precigen’s RheoSwitch gene switch, or RTS, for the treatment of cancer, referred to as IL-12 Products and (iii) CAR products directed to (A) CD19 for the treatment of cancer, referred to as CD19 Products, and (B) BCMA for the treatment of cancer, subject to certain obligations to pursue such target under the License and Collaboration Agreement effective March 27, 2015 between us, Precigen and ARES TRADING S.A., a subsidiary of Merck KGaA, as assigned by Precigen to PGEN.
Under the License Agreement, the Company also has exclusive, worldwide rights 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.
1 unchanged sentence
The Company is required to use commercially reasonable efforts, as defined in the License Agreement, to develop and commercialize IL-12 products, CD19 products and TCR Products.
−Removed: In consideration of the licenses and other rights granted by PGEN, the Company will pay PGEN an annual license fee of $ 100,000 and the Company has agreed to reimburse PGEN for certain historical costs of the licensed programs up to $ 1.0 million, which was fully paid during the year ended December 31, 2019.
+Added: In consideration of the licenses and other rights granted by PGEN, the Company pays PGEN an annual license fee of $ 0.1 million and the Company reimbursed PGEN for certain historical costs of the licensed programs.
The Company will 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.
−Removed: In addition, the Company will pay PGEN tiered royalties ranging from low-single digit to high-single digit on the net sales derived from the sales of any approved IL-12 products and CAR products.
−Removed: 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.
−Removed: The Company will also pay PGEN twenty percent of any sublicensing income received by us relating to the licensed products.
+Added: In addition, the Company will pay PGEN tiered royalties ranging from low-single digits to high-single digits on the net sales derived from the sale of any approved IL-12 products and CAR products.
+Added: The Company will also pay PGEN royalties ranging from low-single digits to mid-single digits on the net sales derived from the sale of any approved TCR products, up to a maximum royalty amount of $ 100.0 million in the aggregate.
+Added: The Company will also pay PGEN 20 % of any sublicensing income received by us relating to the licensed products.
The Company is responsible for all development costs associated with each of 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 a maximum royalty amount of $ 100.0 million.
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
−Removed: In consideration of the Company's entry into the License Agreement, Precigen has forfeited and returned to the Company all shares of the Company's Series 1 preferred stock held by or payable to Precigen.
−Removed: The transaction represented a capital transaction between related parties and the date of settlement was accounted for during the License Agreement year ended December 31, 2018.
+Added: No royalty amounts were incurred during the years ended December 31, 2022 and 2021.
In October 2020, the Company entered into an amendment to the License Agreement relating to the transfer of certain materials and PGEN’s obligations to provide transition assistance relating to the IL-12 products.
6 unchanged sentences
As provided under the MD Anderson License, the Company provided funding for research and development activities in support of the research programs under the 2015 R&D 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.
−Removed: On November 14, 2017, the Company entered into an amendment to the 2015 R&D Agreement, extending its term until April 15, 2021 and on October 22, 2019, the Company entered into another amendment to the 2015 R&D Agreement, extending its term until December 31, 2026.
−Removed: During the year ended December 31, 2021, the Company made payments of $ 0.1 million to MD Anderson compared to $ 0 during the year ended December 31, 2020.
−Removed: The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs for the year ended December 31, 2021 was $ 0 and for the year ended December 31, 2020 was $ 8.1 million, which is included in other current assets on the Company’s balance sheet.
−Removed: For the year ended December 31, 2021, we recognized $ 8.1 million in expenses related to the 2015 R&D Agreement and for the year ended December 31, 2020, we recognized $ 12.2 million in expenses related to the 2015 R&D Agreement.
+Added: On November 14, 2017, the Company entered into an amendment to the 2015 R&D Agreement, extending its term until April 15, 2021.
+Added: In connection with the execution of the 2019 R&D Agreement described below, on October 22, 2019, the Company amended the 2015 R&D Agreement to extend the term of the 2015 R&D Agreement until December 31, 2026 and to allow cash resources on hand at MD Anderson under the 2015 R&D Agreement to be used for development costs under the 2019 Research and Development Agreement, or the 2019 R&D Agreement, which we entered into on October 22, 2019, with MD Anderson, pursuant to which we agreed to collaborate with respect to the TCR program.
The term of the MD Anderson License expires on the last to occur of (a) the expiration of all patents licensed thereunder, or (b) the twentieth anniversary of the date of the MD Anderson License;
−Removed: provided, however, that following the expiration of the term of the MD Anderson License, the Company, together with Precigen, shall then have a fully-paid up, royalty free, perpetual, irrevocable and sublicensable license to use the licensed intellectual property thereunder.
+Added: provided, however, that following the expiration of the term of the MD Anderson
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: License, the Company, together with Precigen, shall then 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 the Company and Precigen are not using commercially reasonable efforts to commercialize the licensed intellectual property on a case-by-case basis.
2 unchanged sentences
In addition, the MD Anderson License will terminate upon the occurrence of certain insolvency events for both the Company and Precigen and may be terminated by the mutual written agreement of the Company, PGEN, and MD Anderson.
−Removed: In connection with the execution of the 2019 R&D Agreement described below, on October 22, 2019, the Company amended the 2015 R&D Agreement to extend the term of the 2015 R&D Agreement until December 31, 2026 and to allow cash resources on hand at MD Anderson under the 2015 R&D Agreement to be used for development costs under the 2019 R&D Agreement.
2019 Research and Development Agreement—The University of Texas MD Anderson Cancer Center
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
−Removed: On October 22, 2019, we entered into the 2019 Research and Development Agreement, or the 2019 R&D Agreement, with MD Anderson, pursuant to which the parties agreed to collaborate with respect to the TCR program.
−Removed: Under the 2019 R&D Agreement, the parties will, among other things, collaborate on programs to expand our TCR library and conduct clinical trials.
−Removed: The activities under the 2019 R&D Agreement are directed by a joint steering committee comprised of two members from our company and one member from MD Anderson.
−Removed: We will own all inventions and intellectual property developed under the 2019 R&D Agreement and we will retain all rights to intellectual property for oncology products manufactured using non-viral gene transfer technologies under the 2019 R&D Agreement, including our Sleeping Beauty technology.
−Removed: We have granted MD Anderson an exclusive license for such intellectual property outside the field of oncology and to develop and commercialize TCR products manufactured using viral gene transfer technologies, and a non-exclusive license for TCR products manufactured using viral-based technologies.
−Removed: Under the 2019 R&D Agreement, we agreed, beginning on January 1, 2021, to reimburse MD Anderson up to a total of $ 20 million for development costs under the 2019 R&D Agreement, after the funds from the 2015 R&D Agreement are exhausted.
−Removed: In addition, we will pay MD Anderson royalties on net sales of its TCR products at rates in the low single digits.
−Removed: We are required to make performance-based payments upon the successful completion of clinical and regulatory benchmarks relating to its TCR products.
−Removed: 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 our TCR products.
+Added: Under the 2019 R&D Agreement, the Company and MD Anderson will, among other things, collaborate on programs to expand the Company's TCR library and conduct clinical trials.
+Added: The activities under the 2019 R&D Agreement are directed by a joint steering committee comprised of two members from the Company and one member from MD Anderson.
+Added: The Company will own all inventions and intellectual property developed under the 2019 R&D Agreement and the Company will retain all rights to all, intellectual property, patentable or not, for oncology products manufactured using non-viral gene transfer technologies under the 2019 R&D Agreement, including the Company's Sleeping Beauty technology.
+Added: The Company has granted MD Anderson an exclusive license for such intellectual property to develop and commercialize autologous TCR products manufactured using viral gene transfer technologies, and any products outside the field of oncology and a non-exclusive license for allogenic TCR products manufactured using viral-based technologies.
+Added: Under the 2019 R&D Agreement, the Company agreed, beginning on January 1, 2021, to reimburse MD Anderson up to a total of $ 20.0 million for development costs under the 2019 R&D Agreement, after the funds from the 2015 R&D Agreement are exhausted.
+Added: In addition, the Company will pay MD Anderson royalties on net sales of its TCR products.
+Added: The Company is required to make performance-based payments upon the successful completion of clinical and regulatory benchmarks relating to its TCR products.
+Added: 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.
−Removed: We also agreed to sell our TCR products to MD Anderson at preferential prices and will sell our TCR products in Texas exclusively to MD Anderson for a limited period of time following the first commercial sale of our TCR products.
−Removed: For the year ended December 31, 2021, the Company incurred expenses of $ 0.5 million related to this agreement compared to $ 0 for the year ended December 31, 2020.
+Added: The Company also agreed to sell its TCR products to MD Anderson at preferential prices and will sell the Company's 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.
+Added: For the year ended December 31, 2022, the Company incurred clinical expenses of $ 0.8 million from MD Anderson related to this agreement, compared to $ 0.3 million for the year ended December 31, 2021.
The 2019 R&D Agreement will terminate on December 31, 2026 and either party may terminate the 2019 R&D Agreement following written notice of a material breach.
1 unchanged sentence
In connection with the execution of the 2019 R&D Agreement, on October 22, 2019, the Company issued MD Anderson a warrant to purchase 3,333,333 shares of the Company's common stock, which is referred to as the MD Anderson Warrant.
−Removed: The MD Anderson Warrant has an initial exercise price of $ 0.00 1 per share, expires on December 31, 2026 , and vests upon the occurrence of certain clinical milestones.
−Removed: As of December 31, 2021, none of the milestones have been met.
−Removed: The MD Anderson Warrant and the shares of the Company's common stock to be issued upon exercise of the MD Anderson Warrant have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
+Added: The MD Anderson Warrant has an initial exercise price of $ 0.001 per share, expires on December 31, 2026 , and vests in four parts upon the occurrence of certain clinical milestones.
+Added: As of December 31, 2022, the milestones have not been met.
License Agreement with the NCI
−Removed: On May 28, 2019, we entered into a patent license agreement, or the Patent License, with the National Cancer Institute, or NCI.
−Removed: Pursuant to the Patent License, we hold 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 neoantigens.
−Removed: In addition, pursuant to the Patent License, we hold 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.
−Removed: On May 29, 2019, January 8, 2020, September 28, 2020, April 16, 2021, May 4, 2021, and August 13, 2021 we amended the Patent License to expand our TCR library to include additional TCRs reactive to mutated KRAS and TP53 neoantigens licensed from the NCI.
−Removed: Pursuant to the terms of the Patent License, we are 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 for the Patent License.
−Removed: We also reimbursed the NCI for past patent expenses in the aggregate amount of approximately $ 46,000 .
−Removed: Under the amendment to the patent license signed in January 2020, we agreed to pay the NCI a cash payment of $ 600,000 within sixty days of the amendment and under the amendment to the patent license signed in September 2020, we agreed to pay the NCI a cash payment of $ 411,000 within sixty days of the amendment.
−Removed: The terms of the Patent License also require us to pay the NCI minimum annual royalties in the amount of $ 0.3 million, which amount will be reduced to $ 0.1 million once the aggregate minimum annual royalties paid by us equals $ 1.5 million.
+Added: On May 28, 2019, the Company entered into a patent license agreement, or the Patent License, with the NCI.
+Added: 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 neoantigens.
+Added: 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.
+Added: On May 29, 2019, January 8, 2020, September 28, 2020, April 16, 2021, May 4, 2021 and August 13, 2021 the Company amended the Patent License to expand its TCR library to include additional TCRs reactive to mutated KRAS and TP53 neoantigens licensed from the NCI.
+Added: The terms of the Patent License 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.
Alaunos Therapeutics, Inc.
NOTES TO FINANCIAL STATEMENTS
−Removed: We are also required to make performance-based payments upon successful completion of clinical and regulatory benchmarks relating to the licensed products.
+Added: The Company is also required to make performance-based payments upon successful completion of clinical and regulatory benchmarks relating to the licensed products.
Of such payments, 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.
−Removed: The first benchmark payment of $ 0.1 million will be due upon the initiation of our first sponsored Phase 1 clinical trial of a licensed product or licensed process in the field of use licensed under the Patent License .
−Removed: In addition, we are required to pay the NCI one-time benchmark payments following aggregate net sales of licensed products at certain aggregate net sales ranging from $ 250.0 million to $ 1.0 billion.
+Added: The first benchmark payment of $ 0.1 million was paid during the year ended December 31, 2022 upon the initiation of the Company's TCR-T Library Phase 1/2 Trial, which was a qualifying Phase 1 clinical trial under the terms of the Patent License.
+Added: In addition, the Company is required to pay the NCI one-time benchmark payments following aggregate net sales of licensed products at certain aggregate net sales ranging from $ 250.0 million to $ 1.0 billion.
The aggregate potential amount of these benchmark payments is $ 12.0 million.
−Removed: We 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.
−Removed: To the extent we enter into a sublicensing agreement relating to a licensed product, we are 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.
+Added: 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.
+Added: 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.
−Removed: The NCI may terminate or modify the Patent License in the event of a material breach, including if we do 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.
−Removed: We may terminate the Patent License, or any portion thereof, in our sole discretion at any time upon 60 days’
+Added: 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.
+Added: 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:
−Removed: (i) require us to sublicense the rights to the product candidates covered by the Patent License upon certain conditions, including if we are not reasonably satisfying required health and safety needs and (ii) terminate or modify the Patent License, including if we are not satisfying requirements for public use as specified by federal regulations.
−Removed: For the year ended December 31, 2021 we expensed and made payments of $ 0.5 million and for the year ended December 31, 2020 we expensed and made payments of $ 1.5 million.
+Added: (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.
+Added: For the year ended December 31, 2022 the Company incurred $ 0.7 million of expenses and incurred $ 0.5 million of expenses for the year ended December 31, 2021.
Cooperative Research and Development Agreement (CRADA) with the NCI
−Removed: On January 9, 2017, we entered into a Cooperative Research and Development Agreement (the “CRADA”) with the NCI.
+Added: On January 9, 2017, the Company entered into a Cooperative Research and Development Agreement, or the CRADA, with the NCI.
The purpose of this collaboration was to advance a personalized TCR-T approach for the treatment of solid tumors.
−Removed: Using our Sleeping Beauty technology, NCI would analyze a patient’s own cancer cells, identify their unique neoantigens and TCRs reactive against those neoantigens and then use our Sleeping Beauty technology to transpose one or more TCRs into T cells for re-infusion.
+Added: Using the Company's Sleeping Beauty technology, the NCI would analyze a patient’s own cancer cells, identify their unique neoantigens and TCRs reactive against those neoantigens and then use the Company's Sleeping Beauty technology to transpose one or more TCRs into T cells for re-infusion.
Research conducted under the CRADA will be at the direction of Steven A.
−Removed: Rosenberg, M.D., Ph.D., Chief of the Surgery Branch at the NCI, in collaboration with our researchers and PGEN researchers.
−Removed: We are responsible for providing NCI with the test materials necessary for them to conduct their studies, and eventually, clinical trials pursuant to the CRADA.
+Added: Rosenberg, M.D., Ph.D., Chief of the Surgery Branch at the NCI, in collaboration with the Company's researchers.
+Added: The Company is responsible for providing the NCI with the test materials necessary for them to conduct their studies, and eventually, clinical trials pursuant to the CRADA.
Inventions, data and materials discovered or produced in connection with performance of the research plan under the CRADA will remain the sole property of the party who produced the discovery.
The parties will jointly own all inventions jointly discovered under the research plan.
−Removed: The owner of any invention under the CRADA will make the decision to file a patent covering the invention, or in the case of a jointly owned invention, we will have the first opportunity to file a patent covering the invention.
−Removed: If we fail to provide timely notice of our decision to NCI or decide not to file a patent covering the joint invention, NCI has the right to make the filing.
−Removed: For any invention solely owned by NCI or jointly made by NCI and us for which a patent application was filed, the U.S.
−Removed: Public Health service grants us an exclusive option to elect an exclusive or non-exclusive commercialization license.
−Removed: For inventions owned solely by NCI or jointly owned by NCI and us, which are licensed according to the terms described above, we agreed to grant to the U.S.
+Added: The owner of any invention under the CRADA will make the decision to file a patent covering the invention, or in the case of a jointly owned invention, the Company will have the first opportunity to file a patent covering the invention.
+Added: If the Company fails to provide timely notice of its decision to the NCI or decides not to file a patent covering the joint invention, the NCI has the right to make the filing.
+Added: For any invention solely owned by the NCI or jointly made by the NCI and the Company for which a patent application was filed, the U.S.
+Added: Public Health service grants the Company an exclusive option to elect an exclusive or non-exclusive commercialization license.
+Added: For inventions owned solely by the NCI or jointly owned by the NCI and the Company, which are licensed according to the terms described above, the Company agreed to grant to the U.S.
government a non-exclusive, non-transferable, irrevocable and paid up license to practice the invention or have the invention practiced on its behalf throughout the world.
−Removed: We are also required to grant the U.S.
−Removed: government a non-exclusive, non-transferable, irrevocable and paid up license to practice the invention or have the invention practiced on its behalf throughout the world for any of our solely owned inventions.
+Added: The Company is also required to grant the U.S.
+Added: government a non-exclusive, non-transferable, irrevocable and paid up license to practice the invention or have the invention practiced on its behalf throughout the world for any of the Company's solely owned inventions.
The agreement may be terminated by any of the parties upon 60 days prior written consent.
−Removed: The NCI has a cleared IND that would permit them to begin this trial.
−Removed: To our knowledge, the trial has not yet enrolled due to matters internal to the NCI and unrelated to our technology.
+Added: The NCI has a cleared Investigational New Drug Application, or IND, that would permit them to begin this trial.
+Added: To the Company's knowledge, the trial has not yet enrolled.
The progress and timeline for this trial, including the timeline for dosing patients, are under control of the NCI.
−Removed: In February 2019, we extended the CRADA with the NCI until January 9, 2022, committing an additional $ 5.0 million to this program.
−Removed: During the year ended December 31, 2021 we made payments of $ 1.25 million and during the year ended December 31, 2020 we made payments of $ 2.5 million, pursuant to the CRADA.
−Removed: For the third and fourth quarters of 2021, we were not required to make payments towards the program
+Added: In February 2019, the Company extended the CRADA with the NCI until January 9, 2022, committing an additional $ 5.0 million to this program;
+Added: however, for the third and fourth quarters of 2021, the Company was not required to make payments toward the program as agreed with the NCI.
+Added: Therefore, as of December 31, 2022, the Company made $ 3.8 million of payments under the February 2019 CRADA extension, and the NCI has agreed that this is full satisfaction of the agreement and no further payments are due under the $ 5.0 million commitment.
+Added: In March 2022, the Company entered into an amendment to the CRADA that was retroactive, effective January 9, 2022 to extend the term of the
Alaunos Therapeutics, Inc.
NOTES TO FINANCIAL STATEMENTS
−Removed: as agreed with the NCI.
−Removed: In March 2022, we entered into an amendment to the CRADA that is retroactive, effective January 9, 2022 to extend the term of the CRADA until January 9, 2023.
+Added: CRADA until January 9, 2023.
+Added: In June 2022, the Company entered into the Fourth Amendment to the CRADA, or the CRADA Fourth Amendment, which, among other things, extended the term of the CRADA until January 9, 2025.
+Added: In connection with the CRADA Fourth Amendment, the Company agreed to contribute $ 1.0 million per year, payable on a quarterly basis, beginning in the first quarter of 2023.
+Added: The Company did no t incur expenses under the CRADA for the year ended December 31, 2022, as compared to $ 1.3 million for the year ended December 31, 2021.
Patent and Technology License Agreement—The University of Texas MD Anderson Cancer Center and the Texas A&M University System
3 unchanged sentences
The class of water-based organic arsenicals includes darinaparsin.
−Removed: 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.
−Removed: In addition, the Licensors are entitled to receive single digit percentage royalty payments on sales from a licensed product and will also be entitled to receive a portion of any fees that the Company may receive from a possible sublicense under certain circumstances.
−Removed: During the year ended December 31, 2021, the Company paid fees under the terms of the license agreement of $ 0.1 million.
−Removed: No amounts were accrued or paid during the year ended December 31, 2020.
+Added: Under the terms of the agreement, the Company may be required to make additional payments to the Licensors upon achievement of certain milestones in varying amounts which, on a cumulative basis could total up to an additional $ 4.5 million.
+Added: In addition, the Licensors are entitled to receive royalty payments on sales from a licensed product and will also be entitled to receive a portion of any fees that the Company may receive from a possible sublicense under certain circumstances.
+Added: During the year ended December 31, 2022, $ 2.5 million was incurred as a one-time milestone payment under the terms of the agreement, compared to $ 0.1 million for the year ended December 31, 2021.
+Added: The Company incurred $ 2 thousand in royalty expenses on sales under this agreement during the year ended December 31, 2022, and did no t incur royalty expenses on sales under this agreement during the year ended December 31, 2021.
Collaboration Agreement with Solasia Pharma K.K.
On March 7, 2011, the Company entered into a License and Collaboration Agreement with Solasia Pharma K.
−Removed: ("Solasia"), which was amended on July 31, 2014 to include an exclusive worldwide license.
−Removed: 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.
+Added: K., or Solasia, which was amended on July 31, 2014 to include an exclusive worldwide license and amended on October 14, 2021 to revise certain payment schedule details, or, as so amended, the Solasia License and Collaboration Agreement.
+Added: Pursuant to the Solasia 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.
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 revenue generated by Solasia.
Solasia will be responsible for all costs related to the development, manufacturing and commercialization of darinaparsin.
−Removed: 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.
−Removed: During the year ended December 31, 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 .
−Removed: The collaboration revenue for the year ended December 31, 2021 related to a milestone event, which was met by Solasia related to a submission of approval application in Japan.
−Removed: No amounts were recorded or received during the year ended December 31, 2020.
−Removed: 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 which became exercisable six months after the closing of the private placement (the "November 2018 Warrants").
+Added: The Company’s licensors, as defined in the Solasia License and Collaboration Agreement, will receive a portion of all milestone and royalty payments made by Solasia to the Company in accordance with the terms of the Solasia License and Collaboration Agreement with the licensors, as described above.
+Added: In June 2022, Solasia announced that darinaparsin had been approved from relapsed or refractory Peripheral T-Cell Lymphoma by the Ministry of Health, Labor and Welfare in Japan.
+Added: During the year ended December 31, 2022, the Company earned $ 2.9 million of collaboration revenue under the Solasia License and Collaboration Agreement primarily related to Solasia's achievement of certain sales-based milestones in Japan, compared to $ 0.4 million during the year ended December 31, 2021.
+Added: In connection with the Company’s November 2018 private placement that provided net proceeds of approximately $ 47.1 million, the Company issued warrants to purchase an aggregate of 18,939,394 shares of common stock, which became exercisable six months after the closing of the private placement, or the November 2018 Warrants.
The November 2018 Warrants had an exercise price of $ 3.01 per share and have a five-year term.
−Removed: The relative fair value of the November 2018 Warrants was estimated at $ 18.4 million using a Black-Scholes model with the following assumptions:
+Added: The fair value of the November 2018 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.
−Removed: The Company assessed whether the November 2018 Warrants require accounting as derivatives.
−Removed: The Company determined that the November 2018 Warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’
−Removed: equity in accordance with FASB Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging .
−Removed: As such, the Company has concluded the November 2018 Warrants meet the scope exception for determining whether the instruments require accounting as derivatives and should be classified in stockholders’
On July 26, 2019 and September 12, 2019, the Company entered into agreements with existing investors whereby the investors exercised the November 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.
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
−Removed: The Company issued participating investors new warrants to purchase up to 17,803,031 additional shares of common stock (the "2019 Warrants") as consideration for the warrant holders to exercise their November 2018 Warrants.
+Added: The Company issued participating investors new warrants to purchase up to 17,803,031 additional shares of common stock, or the 2019 Warrants, as consideration for the warrant holders to exercise their November 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 in the Company’s statement of operations in 2019.
−Removed: On October 22, 2019, the Company entered into the 2019 Agreement with MD Anderson.
−Removed: 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 "MD Anderson Warrant").
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
+Added: On October 22, 2019, the Company entered into the 2019 R&D Agreement with MD Anderson.
+Added: In connection with the execution of the 2019 R&D Agreement, the Company issued the MD Anderson Warrant to purchase 3,333,333 shares of common stock.
The MD Anderson Warrant has an initial exercise price of $ 0.001 per share and grant date fair value of $ 14.5 million.
1 unchanged sentence
The Company will recognize expense on the MD Anderson Warrant in the same manner as if the Company paid cash for services to be rendered.
−Removed: For the years ended December 31, 2021 and 2020, the Company did not recognize any expense related to the warrant as no work on the clinical milestones has begun.
+Added: For the year ended December 31, 2022 and 2021, the Company did not recognize any expense related to the MD Anderson Warrant as the clinical milestones had not been achieved.
On August 6, 2021, the Company entered into the Loan and Security Agreement with SVB.
1 unchanged sentence
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.
−Removed: The warrants have a ten-year life and are fully vested upon issuance.
+Added: The warrants have a ten-year life and were fully vested upon issuance.
The fair value of the warrants was estimated 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 years and no dividends.
−Removed: On December 28, 2021, the Company entered into the Amendment, as described in Note 4, Debt, where the original warrants issued to SVB were amended and restated.
−Removed: As amended and restated, the warrants are for up to 649,615 shares of common stock, in the aggregate, at an exercise price per share of $ 1.16 .
−Removed: The amended and restated warrants expire on August 6, 2031 and are fully vested upon issuance.
−Removed: Using a Black-Scholes model with an expected volatility of 81 %, risk free interest rate of 1.49 %, expected life of 10 years and no dividends, the Company recorded a $ 0.2 million increase in the fair value of the warrants due to the modification of the warrants.
+Added: On December 28, 2021, the Company entered into the Amended Loan and Security Agreement, as described in Note 4, Debt, in connection with which, the original warrants issued to SVB were amended and restated.
+Added: As amended and restated, the SVB Warrants are for up to 649,615 shares of common stock, in the aggregate, at an exercise price per share of $ 1.16 .
+Added: The SVB Warrants expire on August 6, 2031 and were fully vested upon issuance.
+Added: Using a Black-Scholes model with an expected volatility of 81 %, risk free interest rate of 1.49 %, expected life of 10 years and no dividends, the Company recorded a $ 0.2 million increase in the fair value of the SVB Warrants due to the modification of the SVB Warrants during the year ended December 31, 2021.
+Added: The Company assessed whether the SVB Warrants require accounting as derivatives.
+Added: The Company determined that the SVB Warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’
+Added: equity in accordance with ASC 815, Derivatives and Hedging .
+Added: As such, the Company has concluded the SVB Warrants meet the scope exception for determining whether the instruments require accounting as derivatives and should be classified in stockholders’
Restructuring
2 unchanged sentences
The severance benefits, apart from certain continuing Company-paid health care benefits for up to twelve months, were paid in 2021.
−Removed: The Company expensed the following costs associated with termination benefit payments resulting from the strategic reduction in force:
+Added: The remaining benefits were paid in 2022, which reduced the severance benefits accrual to $ 0 as of December 31, 2022.
+Added: The Company incurred the following costs associated with termination benefit payments resulting from the strategic reduction in force:
($ in thousands)
11 unchanged sentences
Net operating loss carryforwards
−Removed: Start-up and organizational costs
+Added: Start-up and pre-clinical studies
Research and development credit carryforwards
−Removed: Stock compensation
+Added: Stock-based compensation
Capitalized acquisition costs
Lease liability
+Added: Capitalized research expenses
Less valuation allowance
4 unchanged sentences
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
−Removed: At December 31, 2021, the Company has aggregate net operating loss carryforwards for federal tax purposes of approximately $ 639 million, of which approximately $ 342 million expires at various dates through December 31, 2037 and approximately $ 297 million can be carried forward indefinitely.
+Added: At December 31, 2022, the Company has aggregate net operating loss carryforwards for federal tax purposes of approximately $ 665.5 million, of which approximately $ 341.7 million expire at various dates through December 31, 2037 and approximately $ 323.8 million can be carried forward indefinitely.
The Company also has approximately $ 497.9 million of state net operating loss carryforwards available to offset future state taxable income, expiring at various dates through 2042.
Additionally, the Company has approximately $ 40.1 million of federal and state research and development credits at December 31, 2022, expiring in varying amounts through 2042 , which may be available to reduce future taxes.
−Removed: The Company has provided a valuation allowance for the full amount of these net deferred tax assets since it is more likely than not that these future benefits will not be realized.
+Added: The Company has provided a valuation allowance for the full amount of its net deferred tax assets since it is more likely than not that these future benefits will not be realized.
However, these deferred tax assets may be available to offset future income tax liabilities and expenses.
7 unchanged sentences
Research and development credits
−Removed: Stock compensation
+Added: Research and development true-up
+Added: Stock-based compensation
Federal/state rate change
1 unchanged sentence
Effective tax rate
−Removed: The Company adopted ASC 740, Accounting for Uncertain Tax Positions on January 1, 2007 (“ASC 740”).
+Added: The Company adopted ASC 740, Accounting for Uncertain Tax Positions on January 1, 2007.
ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No.
3 unchanged sentences
NOTES TO FINANCIAL STATEMENTS
−Removed: The Company did not establish any additional reserves for uncertain tax liabilities upon adoption of ASC 740.
+Added: Company did not establish any additional reserves for uncertain tax liabilities upon adoption of ASC 740.
There were no adjustments to its uncertain tax positions in the years ended December 31, 2022 and 2021.
−Removed: The Company has not recognized any interest and penalties in the statement of operations because of the Company’s net operating losses and tax credits that are available to be carried forward.
+Added: The Company has not recognized any interest and penalties in the statements of operations because of the Company’s net operating losses and tax credits that are available to be carried forward.
When necessary, the Company will account for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes.
The Company does not expect the amounts of unrecognized benefits will change significantly within the next twelve months.
−Removed: The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and state jurisdictions for the years ended December 31, 1999 through 2021.
−Removed: On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act into law which was an emergency economic stimulus package in response to the COVID-19 pandemic and its impact on the economy, public health, state and local governments, individuals and businesses.
−Removed: The Company has considered the legislation surrounding the impact of the CARES Act and the potential effects it may have on the Company.
−Removed: Some of the more significant provisions under the CARES Act include five-year carryback of net operating losses (Section 2303), Refundable AMT credit (Section 2305), relaxation of the limitation of adjusted taxable income (ATI) as determined under IRC Section 163(j) from 30 % to 50 % (Section 2306), and changes to qualified bonus improvement property (QIP) tax life and bonus depreciation eligibility allowing for a 15 -year tax useful life an eligibility for 100 % bonus depreciation (Section 2307).
−Removed: Due to the Company’s history of US taxable losses, and use of MACRS and/or straight-line depreciation for tax purposes, there is no impact to the tax provision as a result of the enactment of the CARES Act.
−Removed: As of December 31, 2020, the Company has analyzed the provisions of the CARES Act and has recorded no income tax benefit or expense related to it.
+Added: The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and state jurisdictions for the years ended December 31, 1999 through 2022 to the extent net operating losses continue to be carried forward to 2022.
+Added: Beginning in 2022, the Tax Cuts and Jobs Act of 2017, or the Tax Act, eliminated the option to deduct research and development expenditures immediately in the year incurred and requires taxpayers to capitalize and amortize them over five years pursuant to IRC Section 174.
+Added: The mandatory capitalization requirement had no impact to the overall deferred tax assets due to the Company's loss position and full valuation allowance.
Stock Option Plan
−Removed: The Company adopted the 2012 Equity Incentive Plan (the “2012 Plan”) in May 2012.
+Added: The Company adopted the 2012 Equity Incentive Plan, or the 2012 Plan, in May 2012.
Including subsequent increases, the Company had reserved 14,000,000 shares for issuance.
−Removed: On December 31, 2021, there are 2,847,190 shares reserved for issuance and no shares available for future grant.
−Removed: The Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”) in June 2020.
+Added: On December 31, 2022, there were 1,089,296 shares reserved for issuance and no shares available for future grant.
+Added: The Company adopted the 2020 Equity Incentive Plan, or the 2020 Plan, in June 2020.
The Company reserved 21,000,000 shares for issuance plus a carryover of 1,066,275 shares from the 2012 Plan for a total of 22,066,275 shares.
In addition, returning shares from the 2012 Plan are available for issuance under the 2020 Plan.
−Removed: As of December 31, 2021, 5,750,000 shares were registered, 7,818,679 shares reserved for issuance and 30,564 shares available for future grant.
−Removed: As of December 31, 2021 the Company had outstanding options to its employees to purchase up to 9,208,236 shares of the Company’s common stock, to its directors to purchase up to 1,397,633 shares of the Company’s common stock, as well as options to consultants in connection with services rendered to purchase up to 60,000 shares of the Company’s common stock.
−Removed: Stock options to employees generally vest ratably in either quarterly or annual installments over three or four years, commencing on the first anniversary of the grant date and have contractual terms of ten years.
+Added: As of December 31, 2022, there were 9,319,326 shares reserved for issuance and 15,460,088 shares available for future grant.
+Added: Stock options generally vest ratably in either quarterly or annual installments over three or four years, commencing on the first anniversary of the grant date and have contractual terms of ten years.
Stock options to directors generally vest ratably over one or two years and have contractual terms of ten years.
Stock options are valued using the Black-Scholes option pricing model and compensation is recognized based on such fair value over the period of vesting on a straight-line basis.
−Removed: Proceeds from the option exercises during the year ended December 31, 2021 amounted to $ 1.0 million and during the year ended December 31, 2020 amounted to $ 0.4 million.
−Removed: The intrinsic value of these options amounted to $ 0.8 million for the year ended December 31, 2021 and $ 0.3 million for the year ended December 31, 2020.
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
+Added: Proceeds from the option exercises during the year ended December 31, 2022 amounted to $ 21 thousand and during the year ended December 31, 2021 amounted to $ 1.0 million.
+Added: The intrinsic value of these options amounted to $ 26 thousand for the year ended December 31, 2022 and $ 0.8 million for the year ended December 31, 2021.
Stock option activity under the Company's stock options plans for the years ending December 31, 2022 and 2021 were as follows:
1 unchanged sentence
Number of Shares
−Removed: Average Exercise
−Removed: Intrinsic Value
+Added: Weighted- Average Exercise Price
+Added: Weighted- Average Contractual Term (Years)
+Added: Aggregate Intrinsic Value
Outstanding, December 31, 2020
3 unchanged sentences
Options exercisable, December 31, 2021
−Removed: Options available for future grant at December 31, 2021
−Removed: The Company granted 400,000 inducement stock options on July 22, 2019 with exercise prices of $ 5.60 , 65,000 on August 19, 2019 with exercise prices of $ 5.18 , and 65,000 on November 21, 2019 with exercise prices of $ 4.59 .
−Removed: The options vest ratably, over four years, commencing with one quarter on the first anniversary of the grant date and then quarterly thereafter.
−Removed: The options have a contractual term of ten years.
−Removed: These options were granted outside of the 2012 Plan and therefore, are not included in the table above.
−Removed: The grant date fair values were $ 1.5 million for the July 22, 2019 options, $ 231,000 for the August 19, 2019 options, and $ 193,000 for the November 21, 2019 options.
−Removed: As of December 31, 2021, 32,500 options are outstanding from all inducement stock options.
+Added: Options available for future grant, December 31, 2022
On December 31, 2022, total unrecognized compensation costs related to non-vested stock options outstanding amounted to $ 6.2 million.
The cost is expected to be recognized over a weighted-average period of 1.92 years.
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
Restricted Stock
For the year ended December 31, 2022 the Company issued 280,000 shares of restricted stock and 1,601,224 in the year ended December 31, 2021 to employees and directors.
+Added: During the year ended December 31, 2022, the Company repurchased 18,750 shares at a price of $ 2.41 per share to cover payroll taxes for one employee exercise, which is in accordance with the original terms of the award.
+Added: There were no repurchases by the Company for the year ended December 31, 2021.
A summary of the status of restricted stock as of December 31, 2022 and 2021 is as follows:
Number of Shares
−Removed: Weighted-Average
−Removed: Grant Date Fair
−Removed: Non-vested, December 31, 2019
−Removed: Non-vested, December 31, 2020
−Removed: Non-vested, December 31, 2021
+Added: Weighted-Average Grant Date Fair Value
+Added: Unvested, December 31, 2020
+Added: Unvested, December 31, 2021
+Added: Unvested, December 31, 2022
As of December 31, 2022, there was $ 1.1 million of total unrecognized stock-based compensation expense related to non-vested restricted stock arrangements.
2 unchanged sentences
The Company sponsors a qualified 401(k) retirement plan under which employees are allowed to contribute certain percentages of their pay, up to the maximum allowed under Section 401(k) of the IRC, or the 401(k) Plan.
−Removed: The Company may make contributions to the 401(k) Plan at its
−Removed: Alaunos Therapeutics, Inc.
−Removed: NOTES TO FINANCIAL STATEMENTS
+Added: The Company may make contributions to the 401(k) Plan at its discretion.
The Company contributed approximately $ 0.5 million to the 401(k) Plan during the year ended December 31, 2022 and $ 0.7 million during the year ended December 31, 2021.
Joint Venture
−Removed: On December 18, 2018, the Company entered into a Framework Agreement with TriArm whereby the parties will 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.
+Added: On December 18, 2018, the Company entered into a Framework Agreement with TriArm whereby 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.
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.
−Removed: 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.
1 unchanged sentence
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.
−Removed: Eden BioCell will be responsible for certain milestone and royalty payments to related to the Company’s license agreements with MD Anderson and PGEN.
−Removed: TriArm entered into a Master Services Agreement with Eden BioCell and contributed $ 10.0 million of cash on the closing date.
−Removed: TriArm also committed to contribute an additional $ 25.0 million to Eden BioCell over time through the achievement of specified milestones.
TriArm and the Company each received a 50 % equity interest in the joint venture in exchange for their contributions to Eden BioCell.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: As a result, 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.
In March 2021, Eden BioCell 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 2020.
−Removed: Two patients have now been treated in this trial.
+Added: In the first half of 2021, two patients were treated in this trial.
The lead investigator at National Taiwan University in Taipei, has reported no serious adverse safety events in either of these patients.
1 unchanged sentence
Patients were infused two days after gene transfer, thus shortening the turnaround time and demonstrating an advantage over viral methods.
+Added: Alaunos Therapeutics, Inc.
+Added: NOTES TO FINANCIAL STATEMENTS
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 Company, that further process development work is required.
−Removed: In September 2021, TriArm and the Company mutually agreed to dissolve the joint venture.
For the years ended December 31, 2022 and 2021, Eden BioCell incurred a net loss.
−Removed: The Company continues to have no commitment to fund its operations.
+Added: In September 2021, TriArm and the Company mutually agreed to dissolve the joint venture, which has now been terminated.
+Added: The Eden BioCell entity is in the process of being dissolved.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.