What changed in this filing

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Item 1. Financial Statements

2021-05-06 compared with 2020-11-05 · 208 added, 240 removed, 391 unchanged (53% of the section changed)

1 unchanged sentence

ZIOPHARM Oncology, Inc.

BALANCE SHEETS

BALANCE SHEET S

(in thousands, except share and per share data)

September 30,

Current assets:

14 unchanged sentences

Commitments and contingencies (Note 7)

Preferred stock, $ 0.001 par value, 30,000,000 shares authorized

Stockholders’ equity:

1 unchanged sentence

250,000,000 shares authorized;

214,165,690 and 181,803,320 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

215,257,674 and 214,591,906 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Additional paid-in

6 unchanged sentences

(in thousands, except share and per share data)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Operating expenses:

4 unchanged sentences

Other income, net

Non-cash inducement warrant

Basic and diluted net loss per share

3 unchanged sentences

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three and Nine Months Ended September 30, 2020

For the Three Months Ended March 31, 2021 and 2020

(in thousands, except share and per share data)

For the Three Months Ended September 30, 2020

Additional Paid

Total Stockholders’

Balance at June 30, 2020

Stock-based compensation

Exercise of employee stock options

Balance at September 30, 2020

For the Nine Months Ended September 30, 2020

For the Three Months Ended March 31, 2020

Additional Paid

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Exercise of employee stock options

Restricted stock awards

Cancelled restricted common stock

Issuance of restricted common stock

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

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

Balance at September 30, 2020

and expenses of $ 2.7 million

Balance at March 31, 2020

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

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STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY…continued

For the Three and Nine Months Ended September 30, 2019

For the Three Months Ended March 31, 2021 and 202 0

(in thousands, except share and per share data)

For the Three Months Ended September 30, 2019

Additional Paid

Total Stockholders’

Balance at June 30, 2019

Stock-based compensation

Exercise of employee stock options

Restricted stock awards

Issuance of common stock upon exercise of warrants, net

Issuance of inducement warrants

Issuance of common stock in connection with at the market offering, net

Balance at September 30, 2019

For the Nine Months Ended September 30, 2019

For the Three Months Ended March 31, 2021

Additional Paid

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Restricted stock awards

Issuance of common stock upon exercise of warrants, net

Issuance of inducement warrants

Cancelled restricted common stock

Restricted stock buy-back

at vesting to cover taxes

Issuance of common stock in connection with at the market offering, net

Balance at September 30, 2019

Balance at March 31, 2021

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

2 unchanged sentences

(in thousands)

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash flows from operating activities:

1 unchanged sentence

Stock-based compensation

inducement warrant expense

Change in operating assets and liabilities

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Accrued expenses

Deferred rent

Lease liabilities

4 unchanged sentences

Cash flows from financing activities:

Repurchase of common stock

Proceeds from exercise of stock options

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Supplementary disclosure of cash flow information:

Compensation paid in restricted stock, gross

Accounts included in accounts payable and accrued expenses related to property and equipment

Accounts included in accrued expenses and accounts payable related to property and equipment

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

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The Company anticipates that losses will continue for the foreseeable future.

As of September 30, 2020, the Company had approximately $ 135.5 million of cash and cash equivalents and the Company’s accumulated deficit was approximately $ 741.3 million.

Given its current development plans, the Company anticipates cash resources will be sufficient to fund operations into mid-2022.

Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given.

As of March 31, 2021, the Company had approximately $ 100.1 million of cash and cash equivalents and the Company’s accumulated deficit was approximately $ 785.7 million.

Given its current development plans, the Company anticipates cash resources will be sufficient to fund operations into the second quarter of 2022.

The Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given.

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

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

The Company’s amended and restated certificate of incorporation authorizes it to issue 250,000,000 shares of common stock.

As of April 30, 202 1

, there were 215,525,411 shares of common stock outstanding and an additional 33,965,938 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants .

Basis of Presentation

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

The results disclosed in the statements of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year 2020

The results disclosed in the statements of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full fiscal year 202 1

ZIOPHARM Oncology, Inc.

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The Company’s most significant estimates and judgments used in the preparation of its financial statements are:

Clinical trial expenses;

Clinical trial expenses and other research and development expenses;

Collaboration agreements;

Fair value measurements of stock-based compensation;

Income taxes.

Impact of COVID-19 Pandemic

With the global spread of the ongoing COVID-19

the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19

With the ongoing COVID-19

pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19

pandemic on its business and operations.

The extent to which the

The Company continues to evaluate the impact of the COVID-19

global pandemic on patients, healthcare providers and its employees, as well as its operations and the operations of its business partners and healthcare communities.

In response to the COVID-19

pandemic, the Company has implemented policies at its locations to mitigate the risk of exposure to COVID-19

by its personnel, including restrictions on the number of staff in any given research and development laboratory and a work-from-home policy applicable to the majority of its personnel, along with encouraging voluntary vaccination and voluntary sharing of vaccination data.

The extent to which the COVID-19

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

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.

In addition, the Company is subject to other challenges and risks specific to its business and its ability to execute on its business plan and strategy, as well as risks and uncertainties common to companies in the biopharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with:

obtaining regulatory approval of its product candidates;

delays or problems in obtaining clinical supply, loss of single source suppliers or failure to comply with manufacturing regulations;

identifying, acquiring or in-licensing

additional products or product candidates;

biopharmaceutical product development and the inherent uncertainty of clinical success;

and the challenges of complying with applicable regulatory requirements.

In addition, to the extent the ongoing COVID-19

pandemic adversely affects its business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the COVID-19

pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

Subsequent Events

The Company evaluated all events and transactions that occurred after the balance sheet date through the date of this filing.

During this period, the Company did not have any material subsequent events that impacted its financial statements or disclosures.

On May 6,2021, the Company announced its commitment to a plan to realign its research and development resources to wind down the clinical trials of its Controlled IL-12 program as part of the Company’s decision to allocate an increasing amount of its resources and capital to its Sleeping Beauty TCR program.

Organizational Changes

On February 25, 2021, the Company announced that Heidi Hagen, formerly Lead Independent Director, was appointed Interim Chief Executive Officer, replacing Dr.

Laurence Cooper, MD., Ph.D.

Hagen is remaining as a member of the Board of Directors.

Cooper also stepped down from his seat on the Board of Directors and will be continuing with the Company in a scientific advisory consulting role to support the Company’s programs.

ZIOPHARM Oncology, Inc.

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

Under the terms of the underwriting agreement, the Company also granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 4,173,912 shares of common stock at a purchase price of $ 3.055 per share.

The offering was made pursuant to the Company’s effective registration statement on Form S-3ASR

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At-the-Market

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

100.0 million.

Shares will be sold pursuant to the Company’s effective registration statement on Form

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

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

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

During the nine months ended September 30, 2019, the Company sold an aggregate of 639,442 shares of its common stock.

The offering was made pursuant to the Company’s effective registration statement on Form S-3ASR

(Registration Statement No.

previously filed with the SEC, and a prospectus supplement thereunder.

The net proceeds from the offering were approximately $ 3.0 million after deducting underwriting discounts and estimated offering expenses payable by the Company.

During the three months ended September 30, 2020, there were no at-the-market sales.

During the nine months ended September 30, 2020, the Company issued and sold an

aggregate of 2,814,673 shares of its common stock under the sales agreement for aggregate net proceeds of

illion after deducting commissions and offering expenses.

During the three months ended March 31, 2020, the Company sold an aggregate of 2,814,673 shares of its common stock at an average price of $ 4.77 per share under the ATM program.

The net proceeds from sales under the ATM program

were approximately $ 13.0 million after deducting underwriting discounts.

During the three months ended March 31, 2021, there were no sales under the Company’s ATM program.

ZIOPHARM Oncology, Inc.

NOTES TO FINANCIAL STATEMENTS (unaudited)

Financings ( C

November 2018 Private Placement and 2019 Inducement Warrants

On November 11, 2018, the Company entered into a securities purchase agreement with certain institutional and accredited investors pursuant to which it sold an aggregate of 18,939,394 immediately separable units at a price per unit of $ 2.64 to such investors, for net proceeds of approximately $ 47.1 million.

Each unit was comprised of (i) one share of our common stock, par value $ 0.001 per share and (ii) a warrant to purchase one share of common stock.

The securities issued by the Company pursuant to the securities purchase agreement and to be issued upon exercise of the warrants were not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

When issuing the units, the Company relied on the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act and by Rule 506 of Registration D, promulgated thereunder and on similar exemptions under applicable state laws and filed a Form D with the SEC on November 19, 2018.

On February 7, 2019, the Company filed a registration statement on Form S-3

registering the resale of shares issued pursuant to the securities purchase agreement and the resale of shares that may be issued upon exercise of the warrants.

On July 26, 2019 and September 12, 2019, the Company entered into agreements for the exercise of the warrants issued in November 2018 to purchase common stock in a private placement.

Pursuant to the terms of the agreements, investors exercised warrants for an aggregate of 17,803,031 shares of common stock, at an exercise price of $ 3.01 per share.

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

The new warrants will become exercisable six months following the date of issuance, will expire on the fifth anniversary of the initial exercise date, and have an exercise price of $ 7.00 (Note 9).

Proceeds from the exercise of the warrants, before deducting placement agent fees and other related expenses of $ 1.1 million were approximately $ 52.5 million.

Summary of Significant Accounting Policies

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

The Company is currently evaluating the impact of this new guidance on its consolidated financial statements.

In August 2018, the FASB issued ASU No.

Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

, or ASU 2018-03.

The guidance in this ASU modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement.

Under the new guidance, transfers between asset classes and the valuation related to Level 3 assets is modified.

The new standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within each annual reporting period.

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

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

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 were as follows:

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

($ in thousands)

1 unchanged sentence

Balance as of

September 30, 2020

Quoted Prices in

Active Markets for

Assets/Liabilities

Identical Assets/

Liabilities (Level 1)

Significant Other

Observable Inputs

Unobservable Inputs

Inputs (Level 2)

Inputs (Level 3)

Cash equivalents

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Balance as of

December 31, 2019

Quoted Prices in

Active Markets for

Assets/Liabilities

Identical Assets/

Liabilities (Level 1)

Significant Other

Observable Inputs

Unobservable Inputs

Inputs (Level 2)

Inputs (Level 3)

Cash equivalents

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Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period.

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

Such potentially dilutive shares of common stock at September 30, 2020 and 2019 consisted of the following:

September 30,

Basic net loss per share is computed by dividing

net loss by the weighted average

number of shares of common stock outstanding for the period.

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

Such potentially dilutive shares of common stock consisted of the following as of March 31, 2021 and 2020, respectively:

Stock options

1 unchanged sentence

Unvested restricted stock

Related Party Transactions

Collaborations with Precigen/ PGEN

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

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

Collaboration with PGEN and MD Anderson

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

Pursuant to the MD Anderson License, the C

ompany, together with PGEN, hold an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson including technologies relating to novel CAR T-cell

therapies, non-viral

gene transfer systems, genetic modification and/or propagation of immune cells and other cellular therapy approaches, Natural Killer, or NK Cells, and TCRs, arising from the laboratory of Laurence Cooper, M.D., Ph.D., who served as the Company’s Chief Executive Officer from May 2015 to February 2021 and was formerly a tenured professor of pediatrics at MD Anderson.

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

During the three months ended March 31, 2021 and year ending December 31, 2020, the Company did not make any payments to MD Anderson, and the total aggregate payments made in connection with this agreement have been

$ 41.9 million.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs is $ 5.1 million, which is included in prepaid expenses and other current assets.

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

Collaboration with Vineti Inc.

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

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

clinical programs.

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

and former officer, of Vineti.

During the three months ended March 31, 2021, the Company recorded expenses of approximately $ 0.2 million for services performed by Vineti.

Joint Venture with TriArm Therapeutics/Eden Biocell

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

commercialization of certain Sleeping Beauty-

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

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

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

Eden BioCell is owned equally by the Company and TriArm and the parties share decision-making authority.

TriArm has contributed $ 10.0 million to Eden BioCell and has committed up to an additional $ 25.0 million to this joint venture.

TriArm also manages all clinical development in the territory pursuant to a Master Services Agreement between TriArm and Eden BioCell.

James Huang, who became a director of the Company in July 2020, Chairman of the Board of Directors in January 2021 and Executive Chairman in February 2021, was the founder and serves as managing partner of Panacea Venture, which is an investor in TriArm.

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

For the three months ended March 31, 2021 and 2020, Eden Biocell incurred a net loss and the Company continues to have no commitment to fund its operations.

Commitments and Contingencies

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Exclusive License Agreement with PGEN Therapeutics

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

or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation.

On October 5, 2018, the Company entered into an exclusive license agreement, or the License Agreement, with PGEN.

As between the Company and PGEN, the terms of the License Agreement replace and supersede the terms of:

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The Company is required to use commercially reasonable efforts to develop and commercialize IL-12

CD19 Products and TCR Products.

In consideration of the licenses and other rights granted by PGEN, the Company pay s

PGEN an annual license fee of

$ 0.1 million.

As of September 30, 2020, the Company had

$ 0.1 million in prepaid expenses and other current assets.

The Company did

no t have any annual license expenses for the three and nine months ended September

Products, CD19 Products and TCR Products.

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

The Company did no t have any annual license expenses for the three months ended March 31, 2021 and 2020.

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

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The Company will also pay PGEN 20 % of any sublicensing income received by the Company relating to the licensed products.

The Company is responsible for all development costs associated with each of the licensed products, other than Gorilla IL-12

PGEN will pay the Company royalties ranging from low-single

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digits on the net sales derived from the sale of PGEN’s CAR products, up to $ 50.0 million .

During the three and nine months ended September

30, 2020, there were no expenses for services performed by PGEN.

As of September

and December 31, 2019, the Company had $ 0 and

$ 0.1 million , respectively, in accrued expenses for amounts due to PGEN.

During the three and nine months ended

September 30, 2019, the Company recorded an expense of $ 0.3 million and

million, respectively, for services performed by PGEN

During the three months ended March 31, 2021 there were $ 0.1 million of expenses for services performed by PGEN and no expenses incurred during the three months ended March 31, 2020.

As of March 31, 2021 and December 31, 2020, the Company had

million, respectively, in accrued expenses related to services for amounts due to PGEN.

ZIOPHARM Oncology, Inc.

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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 became the Company’s Chief Executive Officer in May 2015 and was formerly a tenured professor of pediatrics at MD Anderson and is now currently a visiting scientist under that institution’s policies.

gene transfer systems, genetic modification and/or propagation of immune cells and other cellular therapy approaches, Natural Killer, or NK Cells, and TCRs, arising from the laboratory of Laurence Cooper, M.D., Ph.D., who was the Company’s Chief Executive Officer from May 2015 to February 2021 and was formerly a tenured professor of pediatrics at MD Anderson and is now currently a visiting scientist under that institution’s policies.

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

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After five years from the date of the MD Anderson License and subject to a 180-day

cure period, MD Anderson will have the right to terminate the MD Anderson License with respect to specific technology(ies) funded by the government or subject to a third-party contract if the Company and PGEN are not meeting the diligence requirements in such funding agreement or contract, as applicable.

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

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

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

During the nine months ended September 30, 2020 and 2019, the Company made no payments to MD Anderson.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs is $ 11.2 million, which is included in prepaid expenses and other current assets on the Company’s balance sheet at September 30, 2020.

During the three months ended March 31, 2021 and 2020, the Company made no payments to MD Anderson.

The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs is $ 5.1 million, which is included in prepaid expenses and other current assets on the Company’s balance sheet at March 31, 2021.

On October 22, 2019, the Company entered into the 2019 Research and Development Agreement, or the 2019 Agreement, with MD Anderson, pursuant to which the parties agreed to collaborate with respect to the Company’s Sleeping Beauty

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

No costs have been incurred under this agreement as of March 31, 2021.

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

Refer to Note 9 – Warrants

Refer to Note 10

for further details .

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worldwide license to certain additional manufacturing technologies.

Pursuant to the terms of the Patent License, the Company is required to pay the NCI a cash payment in the aggregate amount of $ 1.5 million payable in $ 0.5 million installments within sixty days, six-months,

Pursuant to the terms of the Patent License, the Company is required to pay the NCI a cash payment in the aggregate amount of $ 1.5 million ,

payable in $ 0.5 million installments within sixty days, six-months,

and the twelve-month anniversary of the effective date of the agreement of the Patent License.

The $ 1.5 million was

the nine months ended September 30,

On January 8, 2020, the Company entered into an amendment to the patent license agreement which expanded the TCR library to include additional TCR’s reactive to mutated KRAS and TP53.

Under the amendment, the Company paid $ 0.6 million during the nine months ending September 30, 2020.

The Company recognized $ 0 and $ 0.6 million of expense for the three and nine months ended September 30, 2020, respectively.

The $ 1.5 million was paid as of December 31, 2020.

On January 8, 2020, the Company entered into an amendment to the Patent License which expanded the TCR library to include additional TCRs reactive to mutated KRAS and TP53.

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

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

As of September 30, 2020, the Company included a prepayment of $ 0.3 million related to the Patent License as prepaid expenses and other current assets on the Company’s b

During the three months ended March 31, 2021, the Company recognized $ 0.3 million related to royalty payments under this agreement.

ZIOPHARM Oncology, Inc.

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Commitments and Contingencies (Continued)

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

Under the second amendment, the Company will pay the NCI an additional $ 0.4 million.

The Company recorded $ 0.4 million as an accrued expense as of September 30, 2020.

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

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

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

The first benchmark payment of $0.1 million will be due upon the initiation of the Company’s first sponsored Phase 1 clinical trial of a licensed product or licensed process in the field of use licensed under the Patent License.

In addition, the Company is required to pay the NCI one-time

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The NCI may terminate or modify the Patent License in the event of a material breach, including if the Company does not meet certain milestones by certain dates, or upon certain insolvency events that remain uncured following the date that is 90 days following written notice of such breach or insolvency event.

The Company may terminate the Patent License, or any portion thereof, in the Company’s sole discretion at any time upon 60 days’ written notice to the NCI.

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

In addition, the NCI has the right to:

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

License, including if the Company is not satisfying requirements for public use as specified by federal regulations.

During the three-month periods ended March 31, 2021, and 2020, the Company expensed

$ 0.1 million related to the patent services under this agreement.

Additionally, the Company recorded

$ 0.3 million in accrued expenses as of March 31, 2021 related to patent services incurred in both the prior and current year.

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

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

$ 0.6 million and

$ 1.3 million of expense for the three and nine months ended September 30, 2020 and 2019, respectively.

Ares Trading License and Collaboration Agreement

On March 27, 2015, the Company, together with PGEN, signed the Ares Trading Agreement, with Ares Trading S.A., a subsidiary of the biopharmaceutical business of Merck KGaA, Darmstadt, Germany, through which the parties established a collaboration for the research and development and commercialization of certain products for the prophylactic, therapeutic, palliative or diagnostic use for cancer in humans.

The Company recorded $ 0.6

million of expense for both three-month periods ended March 31, 2021 and 2020.

ZIOPHARM Oncology, Inc.

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Commitments and Contingencies (Continued)

PGEN was entitled to receive $ 5.0 million, from Ares Trading, payable in equal quarterly installments over two years for each identified product candidate, which will be used to fund discovery work.

The Company was responsible for costs exceeding the quarterly installments and all other costs of the preclinical research and development.

For the nine months ended September 30, 2020 and 2019, the Company incurred no expenses under the Ares Trading Agreement.

Ares Trading paid a non-refundable

upfront fee of $ 115.0 million to PGEN as consideration for entry into the Ares Trading Agreement.

Pursuant to the Third Amendment to Exclusive Channel Partner Agreement, or the 2016 ECP Amendment, the Company was entitled to receive 50 % of the upfront fee, or $ 57.5 million, which was received from PGEN in July 2015.

Under the License Agreement, PGEN agreed to perform all future obligations of the Company under the Ares Trading Agreement other than certain payment obligations.

Accordingly, the Company recognized the remaining deferred revenue as part of the settlement of a related party relationship in 2018.

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

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

No amounts were accrued or paid during the three months ended March 31, 2021 and 2020.

Collaboration Agreement with Solasia Pharma K.K.

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

No amounts were accrued or received during the three months ended March 31, 2021 and 2020.

ZIOPHARM Oncology, Inc.

NOTES TO FINANCIAL STATEMENTS (unaudited)

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

As of September 30, 2020 and December 31, 2019, a total security deposit of $ 0.1 million is included in deposits on the Company’s balance sheet.

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

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

In June 2012, the Company entered into a master lease for the Company’s corporate office headquarters in Boston, Massachusetts, which

was originally set to expire in August 2016 , but renewed through August 31, 2021 .

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

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

at MD Anderson.

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

$ 1 thousand.

This lease was terminated effective March 31, 2020.

On March 12, 2019, the Company entered into a lease agreement for office space in Houston.

Under the terms of the Houston lease agreement, the Company leases approximately one thousand and thirty-eight square feet and is required to make rental payments 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 space in Houston.

Under the terms of the Second Houston Lease, the Company leases, from MD Anderson, approximately eight thousand four hundred and forty-three 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 13, 2020, the Company leased an additional five thousand five hundred eighty-four

square feet from MD Anderson.

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

On March 12, 2019, the Company entered into a lease agreement, or the Second Houston Lease, for additional office s

pace in Houston through April 2021.

Under the terms of the First Houston Lease agreement, the Company leases approximately

1,038 square feet and is required to make rental payments at an average monthly rate of approximately $ 2 thousand through April 2021.

Under the terms of the Second Houston Lease, the Company leases from MD Anderson, approximately

8,443 square feet and is initially required to make rental payments of approximately $ 17 thousand per month

through February 2027, subject to an annual base rent increase of approximately 3.0 % throughout the term.

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

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

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

Effective June 1, 2020, the Company entered into a noncancelable lease for a period of less than a year with monthly payments of approximately $ 10 thousand .

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

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

Effective December 15, 2020, the Company leased an additional

35,482 square feet from MD Anderson.

The Company is initially required to make rental payments of approximately

$ 37 thousand per month through April 2028, subject to an annual base rent increase of approximately

3.0 % throughout the term beginning in April 2023.

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

The components of lease expense were as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

Three Months Ended

March 31, 2021

Operating lease cost

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Leases (Continued)

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

Operating lease cost

Total lease cost

Weighted-average remaining lease term (years)

Weighted-average discount rate

As of September 30, 2020, the maturities of the Company’s operating lease liabilities for the years ended December 31, were as follows (in thousands):

2020 (excluding the nine

months ended September

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

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

The Company recorded approximately $ 0.1 million in rent expense under this short-term lease during the three months ended March 31, 2021 .

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

2021 (excluding the three months ended March 31, 2021)

Total lease payments

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Present value of lease payments

ZIOPHARM Oncology, Inc.

NOTES TO FINANCIAL STATEMENTS (unaudited)

Stock-Based Compensation

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awards as follows:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

(in thousands)

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Stock-based compensation expense

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

The Company granted an aggregate of 140,000 and 1,835,755 stock options during the three and nine months ended September 30, 2019 with a weighted average grant date fair value of $ 3.05 and $ 1.90 per share, respectively.

On January 6, 2019, the Company sett l

an accrued annual performance bonus by issuing 446,428 shares of common stock.

On May 26, 2020 ,

the Company extended the contractual life of 448,130 fully vested stock options and 31,220 stock options that vested on June 30, 2020 ,

held by an officer of the Company.

Additionally, on May 26, 2020 ,

the Company accelerated the vesting of 45,277 shares of restricted stock held by an officer.

These extensions and acceleration of vesting resulted in additional stock compensation expense of $ 65 thousand

and $ 154 thousand in the three and nine months ended September 30, 2020 ,

respectively.

On September 18, 2020 ,

the Company extended the contractual life of 113,350 fully vested stock options and 25,281 stock options that vested on September 18, 2020 ,

held by a director of the Company.

Additionally, on September 18, 2020 ,

the Company accelerated the vesting of 25,281 stock options and 15,890 shares of restricted stock held by

a director of the Company

These extensions and acceleration of vesting resulted in additional stock compensation expense of

in the three and nine months ended September 30, 2020.

For the three months ended September 30, 2020 and 2019 ,

the fair value of stock options was estimated on the date of grant using a Black-Scholes option valuation model with the following assumptions:

For the three months ended September 30,

The Company granted an aggregate of 4,314,438 stock options during the three months ended March 31, 2021 with a weighted-average grant date fair value of $ 2.43 per share.

The Company granted an aggregate of 896,000 stock options during the three months ended March 31, 2020 with a weighted average grant date fair value of $ 2.64 per share.

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

director of the Company, in conformity with prior practice.

These extensions resulted in additional stock

compensation expense of approximately $ 82 thousand during

the three months ended March 31, 2021.

For the three months ended March 31, 2021 and 2020, the fair value of stock options was estimated on the date of grant using a Black-Scholes option valuation model with the following assumptions:

For the three months ended March 31,

Risk-free interest rate

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Expected volatility

72.87 - 78.34 %

Expected dividend yield

At September 30, 2020 ,

there were 863,333

stock options that had been issued outside the 2012 Equity Incentive Plan, or the 2012 Plan.

At March 31, 2021, there were 463,333 stock options that had been issued outside the 2012 Equity Incentive Plan, or the 2012 Plan and the 2020 Equity Incentive Plan, or the 2020 Plan.

These options are excluded from the schedule below.

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Stock-Based Compensation (Continued)

Stock option activity under the Company’s stock option plans for the nine months ended September 30, 2020 is as follows:

Stock option activity under the Company’s stock option plans for the three months ended March 31, 2021 is as follows:

(in thousands, except share and per share data)

2 unchanged sentences

Outstanding, December 31, 2020

Outstanding, September 30, 2020

Options exercisable, September 30, 2020

Outstanding, March 31, 2021

Options exercisable, March 31, 2021

Options exercisable, December 31, 2020

Options available for future grant

At September 30, 2020, total unrecognized compensation costs related to unvested stock options outstanding amounted to $ 8.0 million.

At March 31, 2021, total unrecognized compensation costs related to unvested stock options outstanding amounted to $ 16.0 million.

The cost is expected to be recognized over a weighted-average period of 1.85 years.

A summary of the status of unvested restricted stock for the nine months ended September 30, 2020 is as follows:

A summary of the status of unvested restricted stock for the three months ended March 31, 2021 is as follows:

Number of Shares

1 unchanged sentence

Grant Date Fair Value

December 31, 2019

September 30, 2020

At September 30, 2020, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $ 3.0 million.

Unvested, December 31, 202 0

Unvested, March 31, 2021

At March 31, 2021, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $ 2.6 million.

The cost is expected to be recognized over a weighted-average period of 1.57 years.

At the Company’s annual meeting held on June 29, 2020, the shareholders approved the 2020 Equity Incentive Plan, or the 2020 Plan, which is a successor to and continuation of the Company’s 2012 Equity Incentive Plan, or the 2012 plan.

The 2020 Plan ha d

21 million shares authorized,

plus the shares remaining for issuance under the 2012 Plan.

At the Company’s annual meeting held on June 29, 2020, the shareholders approved the 2020 Equity Incentive Plan, or the 2020 Plan, which is a successor to and continuation of the 2012 Plan.

The 2020 Plan had

21 million shares authorized, plus the shares remaining for issuance under the 2012 Plan.

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

As of September 30, 2020, there are 6,986,610 Shares available to grant from the 2020 plan.

As a result, as of March 31, 2021,

there are 1,287,888 shares available to grant from the 2020 P

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

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The Company assessed whether the warrants require accounting as derivatives.

The Company determined that the warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’ equity in accordance with Financial Accounting Standards Board , or

(“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging

The Company determined that the warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’ equity in accordance with Financial Accounting Standards Board, or (FASB) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging

As such, the Company has concluded the warrants meet the scope exception for determining whether the instruments require accounting as derivatives and should be classified in stockholders’ equity.

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

September 30, 2020, work related to the clinical milestones has not been started and therefore, the Company did not recognize any expense related to the warrant.

The Company has not recognized any expense related to the warrant as of March 31, 2021, as no work towards any of the specified clinical milestones has begun.

Joint Venture

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

generated CAR-T

therapies as set forth in a separate license agreement.

therapies as set forth in a separate license agreement (see Note 6).

On January 3, 2019, Eden BioCell was incorporated in Hong Kong as a private company.

9 unchanged sentences

therapies targeting the CD19 antigen for the territory of China (including Macau and Hong Kong), Taiwan and Korea.

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

TriArm entered into a Master Services Agreement with Eden BioCell and contributed $ 10.0 million of cash on the closing date.

TriArm also committed to contribute an additional $ 25.0 million to Eden BioCell over time through the achievement of certain

Eden BioCell will be responsible for certain milestone and royalty payments related to the Company’s license agreements with MD Anderson and PGEN (see Note 7

TriArm entered into a m

greement with Eden BioCell and contributed $ 10.0 million of cash on the closing date.

TriArm also committed to contribute an additional $ 25.0 million to Eden BioCell over time through the achievement of certain specified milestones.

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

4 unchanged sentences

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

For the three months ended March 31, 2021 and 2020, Eden BioCell incurred a net loss and the Company continues to have no commitment to fund its operations.

Subsequent Events

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

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

On May 6, 2021, the Company announced its commitment to a plan to realign its research and development resources to wind down the clinical trials of its Controlled IL-12 program as part of the Company’s decision to allocate an increasing amount of its resources and capital to its Sleeping Beauty TCR program.

Pursuant to this plan, the Company will eliminate approximately

15 % of its existing workforce on a staggered basis over the remainder of 2021.

Affected employees will be offered separation benefits, including severance payments and, in some cases, retention bonuses, along with temporary healthcare coverage assistance.

Additionally, the Company is evaluating its facilities and vendor relationships utilized in the Controlled IL-12 program and the associated contractual obligations to determine the appropriate course of action and any associated charges to wind down the ongoing clinical trials.

The Company estimates the severance and termination-related costs to be approximately $ 0.8 million and will record these charges in the second quarter of 2021.

On April 5, 2021, the Company entered into a formal separation agreement with Dr.

Laurence Cooper, which resulted in the termination of Dr.

Cooper’s employment as the Company’s Chief Executive Officer, effective April 9, 2021.

As consideration under the separation agreement, Dr.

Cooper is to receive certain severance benefits including severance pay, a restricted stock grant in lieu of Dr.

Cooper’s 2020 discretionary bonus, COBRA coverage and reimbursement of legal fees.

Cooper is also continuing with the Company in a scientific advisory consultant capacity to support the Company’s programs.

During the three months ended March 31, 2021, the Company recorded a charge of approximately

$ 0.6 million related to his separation.

Additional charges related to his separation and continuing consulting costs will be incurred in subsequent quarters.

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

What changed 10-Q

Item 1. Financial Statements