Xilio Therapeutics, Inc. 10-Q

Item 1. Financial Statements XILIO THERAPEUTICS, INC. Condensed Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2023 ​ 2022 ASSETS ​ ​ Current assets ​ ​ Cash and cash equivalents ​ $ 93,271 ​ $ 120,385 Prepaid expenses and other current assets ​ 3,705 ​ 4,111 Total current assets ​ 96,976 ​ 124,496 Restricted cash ​ 1,568 ​ 1,562 Property and equipment, net ​ 7,252 ​ 7,255 Operating lease right-of-use asset ​ 5,477 ​ 5,585 Other non-current assets ​ 232 ​ 267 Total assets ​ $ 111,505 ​ $ 139,165 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities ​ ​ Accounts payable ​ $ 2,013 ​ $ 3,125 Accrued expenses ​ 6,483 ​ 10,327 Operating lease liability, current portion ​ 949 ​ 918 Note payable, current portion ​ 6,667 ​ 6,667 Other current liabilities ​ 82 ​ 82 Total current liabilities ​ 16,194 ​ 21,119 Note payable, net of current portion ​ 1,548 ​ 3,165 Operating lease liability, net of current portion ​ 8,945 ​ 9,189 Other non-current liabilities ​ 26 ​ 45 Total liabilities ​ 26,713 ​ 33,518 Commitments and contingencies (Note 6) ​ ​ Stockholders’ equity ​ ​ Preferred stock, $ 0.0001 par value; 5,000,000 shares authorized, no shares issued or outstanding ​ ​ — ​ ​ — Common stock, $ 0.0001 par value; 200,000,000 shares authorized at March 31, 2023 and December 31, 2022; 27,470,534 shares issued and 27,439,820 shares outstanding at March 31, 2023; 27,471,607 shares issued and 27,425,447 shares outstanding at December 31, 2022 ​ 3 ​ 3 Additional paid-in capital ​ 356,543 ​ 354,752 Accumulated deficit ​ ( 271,754 ) ​ ( 249,108 ) Total stockholders’ equity ​ 84,792 ​ 105,647 Total liabilities and stockholders’ equity ​ $ 111,505 ​ $ 139,165 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents XILIO THERAPEUTICS, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2023 2022 ​ Operating expenses ​ ​ Research and development ​ $ 16,131 ​ $ 14,920 ​ General and administrative ​ 7,395 ​ 6,304 ​ Total operating expenses ​ 23,526 ​ 21,224 ​ Loss from operations ​ ( 23,526 ) ​ ( 21,224 ) ​ Other income (expense), net ​ ​ ​ Other income (expense), net ​ 880 ​ ( 129 ) ​ Total other income (expense), net ​ 880 ​ ( 129 ) ​ Net loss and comprehensive loss ​ $ ( 22,646 ) ​ $ ( 21,353 ) ​ Net loss per share, basic and diluted ​ $ ( 0.83 ) ​ $ ( 0.78 ) ​ Weighted average common shares outstanding, basic and diluted ​ 27,433,252 ​ 27,367,377 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ 7 Table of Contents XILIO THERAPEUTICS, INC. Condensed Consolidated Statements of Stockholders’ Equity (In thousands, except share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional ​ Accumulated ​ Stockholders’ ​ Shares Amount Paid-In Capital Deficit Equity Balance at December 31, 2022 ​ 27,425,447 ​ $ 3 ​ $ 354,752 ​ $ ( 249,108 ) ​ $ 105,647 Vesting of restricted common stock 14,217 ​ — ​ — ​ — ​ — Exercise of stock options 156 ​ — ​ — ​ — ​ — Stock-based compensation expense — ​ — ​ 1,791 ​ — ​ 1,791 Net loss — ​ — ​ — ​ ( 22,646 ) ​ ( 22,646 ) Balance at March 31, 2023 27,439,820 ​ $ 3 ​ $ 356,543 ​ $ ( 271,754 ) ​ $ 84,792 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional ​ Accumulated ​ Stockholders’ ​ Shares Amount Paid-In Capital Deficit Equity Balance at December 31, 2021 ​ 27,358,375 ​ $ 3 ​ $ 346,312 ​ $ ( 160,886 ) ​ $ 185,429 Vesting of restricted common stock 15,441 ​ — ​ — ​ — ​ — Exercise of stock options ​ 2,657 ​ — ​ 16 ​ — ​ 16 Stock-based compensation expense — ​ — ​ 2,029 ​ — ​ 2,029 Net loss — ​ — ​ — ​ ( 21,353 ) ​ ( 21,353 ) Balance at March 31, 2022 27,376,473 $ 3 $ 348,357 $ ( 182,239 ) $ 166,121 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 8 Table of Contents XILIO THERAPEUTICS, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2023 2022 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss $ ( 22,646 ) $ ( 21,353 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation and amortization ​ 499 ​ 440 Non-cash interest expense ​ 31 ​ 53 Stock-based compensation expense ​ 1,791 ​ 2,029 Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid and other assets ​ 406 ​ 336 Operating lease right-of-use asset ​ 108 ​ 92 Accounts payable ​ ( 1,358 ) ​ ( 820 ) Accrued expenses and other liabilities ​ ( 3,868 ) ​ ( 1,427 ) Operating lease liability ​ ( 213 ) ​ ( 185 ) Net cash used in operating activities ​ ( 25,250 ) ​ ( 20,835 ) Cash flows from investing activities: ​ ​ Purchases of property and equipment ​ ( 170 ) ​ ( 254 ) Net cash used in investing activities ​ ( 170 ) ​ ( 254 ) Cash flows from financing activities: ​ ​ Repayments of debt principal ​ ​ ( 1,667 ) ​ ​ — Payments of finance lease ​ ( 21 ) ​ ( 21 ) Proceeds from exercise of stock options ​ — ​ 16 Net cash used in financing activities ​ ( 1,688 ) ​ ( 5 ) Decrease in cash, cash equivalents and restricted cash ​ ( 27,108 ) ​ ( 21,094 ) Cash, cash equivalents and restricted cash, beginning of period ​ 121,947 ​ 199,606 Cash, cash equivalents and restricted cash, end of period $ 94,839 $ 178,512 Supplemental cash flow disclosure: ​ ​ Cash paid for interest $ 209 $ 119 Supplemental disclosure of non-cash activities: ​ ​ ​ Capital expenditures included in accounts payable or accrued expenses ​ $ 310 ​ $ — Reconciliation to amounts within the consolidated balance sheets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 93,271 ​ $ 176,959 Restricted cash ​ ​ 1,568 ​ ​ 1,553 Cash, cash equivalents and restricted cash, end of period ​ $ 94,839 ​ $ 178,512 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 9 Table of Contents XILIO THERAPEUTICS, INC. Notes to Condensed Consolidated Financial Statements (Dollars in thousands, unless otherwise stated) (Unaudited) 1. Description of Business and Liquidity and Capital Resources Description of Business Xilio Therapeutics, Inc. (“Xilio” or the “Company”) is a clinical-stage biotechnology company dedicated to discovering and developing tumor-activated immuno-oncology (“I-O”) therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. The Company was incorporated in Delaware in June 2020, and its headquarters are located in Waltham, Massachusetts. Liquidity and Capital Resources Since its inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with the successful research, development and manufacturing of product candidates, and, if approved, any products, obtaining regulatory approvals for product candidates, and, if approved, commercialization of any products, protection and enforcement of intellectual property and proprietary technology, development by third parties of potentially competitive products or product candidates, compliance with governmental regulations, and the ability to secure additional capital to fund operations. Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and manufacturing process development and will need to obtain regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. As of March 31, 2023, the Company had cash and cash equivalents of $ 93.3 million. The Company believes that its existing cash and cash equivalents will be sufficient to enable the Company to fund its operating expenses and capital expenditure requirements into the end of the second quarter of 2024, which is at least twelve months from the date of issuance of these condensed consolidated financial statements. The Company expects to continue to generate negative cash flows from operations and net losses for the foreseeable future and will need additional capital in the future to support its continuing operations and growth strategy as it continues to invest significantly in research and development of its product candidates, including preclinical and clinical testing and manufacturing process development. To date, the Company has primarily funded its operations with proceeds from the sale of preferred units and convertible preferred stock, a debt financing and its initial public offering (“IPO”), completed in the fourth quarter of 2021, in which the Company received net proceeds of $ 116.4 million. Management’s conclusion with respect to its ability to fund operations is based on estimates that are subject to risks and uncertainties that may prove to be incorrect. If actual results differ from management’s estimates, the Company may be required to seek additional capital sooner or curtail planned activities to reduce operating expenses, which may have an adverse impact on the Company’s ability to achieve its business objectives. 2. Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial 10 Table of Contents statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2022 and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2023. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of March 31, 2023 and the results of its operations and cash flows for the three months ended March 31, 2023 and March 31, 2022. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any future period. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Xilio Development, Inc., a Delaware corporation and Xilio Securities Corporation, a Massachusetts security corporation. All intercompany accounts and transactions have been eliminated in consolidation. Significant Accounting Policies The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are described in Note 2, “ Summary of Significant Accounting Policies ” of the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Concentrations of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds all cash and cash equivalents at accredited financial institutions. Bank accounts in the United States are generally insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Substantially all of the Company’s cash and cash equivalents are FDIC insured, including funds held through an insured cash sweep program. The Company has not experienced any losses in its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. ​ 3. Property and Equipment, Net Property and equipment, net consists of the following as of March 31, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2023 ​ 2022 Laboratory equipment ​ $ 6,101 ​ $ 5,587 Computers and software ​ 228 ​ 228 Furniture and fixtures ​ 681 ​ 636 Leasehold improvements ​ 5,124 ​ 5,124 Construction in process ​ — ​ 98 Total property and equipment ​ ​ 12,134 ​ ​ 11,673 Less: accumulated depreciation ​ ( 4,882 ) ​ ( 4,418 ) Property and equipment, net ​ $ 7,252 ​ $ 7,255 ​ The Company incurred depreciation and amortization expense related to property and equipment of $ 0.5 million and $ 0.4 million for the three months ended March 31, 2023 and 2022, respectively. 11 Table of Contents 4. Accrued Expenses Accrued expenses consist of the following as of March 31, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2023 ​ 2022 External research and development ​ $ 3,640 ​ $ 3,178 Personnel-related ​ 1,745 ​ 5,413 Professional and consulting fees ​ 829 ​ 1,536 Other ​ ​ 269 ​ ​ 200 Total accrued expenses ​ $ 6,483 ​ $ 10,327 ​ ​ ​ ​ ​ 5. Loan and Security Agreement ​ In November 2019, the Company’s wholly owned subsidiary, Xilio Development, Inc. (“Borrower”), entered into a loan and security agreement (as amended and restated in May 2023, the “Loan Agreement”) with Pacific Western Bank (“PacWest”), with the Company as a guarantor. Under the Loan Agreement, in November 2019, the Borrower borrowed $ 10.0 million under a term loan. Interest on amounts outstanding under the Loan Agreement accrue at a variable annual rate equal to the greater of (i) the prime rate plus 0.25 % or (ii) 4.75 %. As of March 31, 2023, the interest rate on the term loan was 8.25 %. The Borrower was required to make interest-only payments on any outstanding balances through December 31, 2022. The Borrower commenced making equal monthly payments of principal plus interest in January 2023, and it will be required to make such payments until the term loan matures on June 30, 2024. ​ The Loan Agreement contains customary representations, warranties and covenants and also includes customary terms covering events of default, including payment defaults, breaches of covenants, a change of control provision and occurrence of a material adverse effect. As security for its obligations under the Loan Agreement, the Borrower granted PacWest a first priority security interest on substantially all of the Borrower’s assets, excluding intellectual property, subject to certain exceptions. ​ The Company has determined that the risk of subjective acceleration under the material adverse effect clause is not probable and therefore has classified the long-term portion of the outstanding principal in non-current liabilities. Upon the occurrence and continuation of an event of default, a default interest rate of an additional 5 % per annum may be applied to the outstanding loan balance, and the administrative agent, collateral agent, and lender may declare all outstanding obligations immediately due and payable and exercise all of their rights and remedies as set forth in the Loan Agreement and under applicable law. As of March 31, 2023, the Company and Borrower were in compliance with all covenants under the Loan Agreement. ​ The Borrower has the following minimum aggregate future loan principal payments under the Loan Agreement as of March 31, 2023: ​ ​ ​ ​ ​ ​ Minimum Loan ​ ​ Payments 2023 (remaining nine months) ​ $ 5,000 2024 ​ 3,333 Total future principal payments ​ 8,333 Less: unamortized discount ​ ( 118 ) Total note payable ​ $ 8,215 ​ The Company recognized $ 0.2 million of interest expense related to the Loan Agreement for each of the three months ended March 31, 2023 and 2022, which is reflected in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss. 12 Table of Contents 6. Commitments and Contingencies The Company has an operating lease for its headquarters and a finance lease for certain lab equipment. In August 2019, the Company entered into a facility lease agreement with a landlord providing funding for tenant improvements and occupancy of approximately 27,830 square feet of office and laboratory space (the “premises”) at 828 Winter Street, Waltham, Massachusetts. The initial term of the lease expires in March 2030, unless terminated earlier in accordance with the terms of the lease. The Company has an option to extend the lease for an additional term of five years at then-market rates. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the leased premises, which it began paying simultaneous with the rent commencement date in March 2020. As of March 31, 2023 and December 31, 2022, the Company had a letter of credit for the benefit of its landlord in the amount of $ 1.6 million, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets. 7. Preferred Stock and Common Stock Undesignated Preferred Stock As of March 31, 2023 and December 31, 2022, the Company’s certificate of incorporation, as amended, authorized the Company to issue up to 5,000,000 shares of undesignated preferred stock at $ 0.0001 par value per share. As of March 31, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding. Common Stock As of March 31, 2023 and December 31, 2022, the Company is authorized to issue up to 200,000,000 shares of common stock, $ 0.0001 par value per share under its certificate of incorporation, as amended. Shares Reserved for Future Issuance As of March 31, 2023 and December 31, 2022, the Company had reserved shares of common stock for future issuance under the 2020 Stock Incentive Plan (as amended, the “2020 Plan”), the 2021 Stock Incentive Plan (the “2021 Plan”), the 2022 Inducement Stock Incentive Plan (the “2022 Inducement Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2023 ​ 2022 Shares of common stock reserved for exercise of a warrant 2,631 2,631 Shares of common stock reserved for exercise of outstanding stock options under the 2021 Plan and 2020 Plan 6,087,600 4,960,553 Shares of common stock reserved for future awards under the 2021 Plan 3,096,174 2,848,568 Shares of common stock reserved for future awards under the 2022 Inducement Plan ​ 275,000 ​ 275,000 Shares of common stock reserved for purchase under the 2021 ESPP ​ 841,436 ​ 566,720 Total shares reserved for future issuance 10,302,841 8,653,472 ​ ​ ​ 8. Stock-Based Compensation Equity Incentive Plans 2020 Stock Incentive Plan In 2020, the Company adopted the 2020 Plan. Under the 2020 Plan, the Company was authorized to issue shares of common stock to the Company’s employees, officers, directors, consultants and advisors in the form of options, restricted stock awards or other stock-based awards. 13 Table of Contents 2021 Stock Incentive Plan In 2021, the Company’s board of directors and stockholders adopted the 2021 Plan, which became effective immediately prior to the IPO in October 2021. Upon effectiveness of the 2021 Plan, the Company ceased granting awards under the 2020 Plan. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares of the Company’s common stock initially reserved for issuance under the 2021 Plan was the sum of (1) 2,654,828 ; plus (2) the number of shares (up to 3,967,038 shares) as is equal to the sum of (x) the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan that remained available for grant under the 2020 Plan immediately prior to the effectiveness of the 2021 Plan and (y) the number of shares of the Company’s common stock subject to outstanding awards whether granted under the 2020 Plan or outside of the 2020 Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right and that, prior to the effectiveness of the 2021 Plan, would have become available for issuance under the 2020 Plan; plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year, commencing on January 1, 2022 and continuing until, and including, January 1, 2031, equal to the lesser of (i) 5 % of the number of shares of the Company’s common stock outstanding on the first day of such fiscal year and (ii) the number of shares of common stock determined by the Company’s board of directors. On January 1, 2023, the number of shares reserved for issuance under the 2021 Plan automatically increased by 1,373,580 shares. As of March 31, 2023, there were 3,096,174 shares available for future issuance under the 2021 Plan. 2022 Inducement Plan In 2022, the Company’s board of directors adopted the 2022 Inducement Plan pursuant to Nasdaq Rule 5635(c)(4). In accordance with Rule 5635(c)(4), stock-based incentive awards under the 2022 Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company as a material inducement to the employee’s entering into employment with the Company. An aggregate of 275,000 shares of the Company’s common stock has been reserved for issuance under the 2022 Inducement Plan. The exercise price of stock options granted under the 2022 Inducement Plan will not be less than the fair market value of a share of the Company’s common stock on the grant date. Other terms of awards, including vesting requirements, are determined by the Company’s board of directors and are subject to the provisions of the 2022 Inducement Plan. As of March 31, 2023, no shares have been granted under the 2022 Inducement Plan. 2021 Employee Stock Purchase Plan In 2021, the Company’s board of directors and stockholders adopted the 2021 ESPP, which became effective immediately prior to the IPO in October 2021. The Company initially reserved 292,031 shares of common stock for issuance under the 2021 ESPP. In addition, the 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by the lesser of (i) 584,062 shares of common stock, (ii) 1 % of the number of shares of the Company’s common stock outstanding on such date, and (iii) a number of shares of common stock as determined by the Company’s board of directors. On January 1, 2023, the number of shares reserved for issuance under the 2021 ESPP was increased by 274,716 shares. The first offering period under the 2021 ESPP commenced on December 1, 2022 and ends May 31, 2023. As of March 31, 2023, no shares have been issued under the 2021 ESPP. As of March 31, 2023, there were 841,436 shares available for future issuance under the 2021 ESPP. 14 Table of Contents Stock-Based Compensation Expense During the three months ended March 31, 2023 and 2022, the Company recorded compensation expense related to stock options and restricted common stock for employees and non-employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2023 2022 Research and development expense ​ $ 573 ​ $ 596 ​ General and administrative expense ​ 1,218 ​ 1,433 ​ Total stock-based compensation expense ​ $ 1,791 ​ $ 2,029 ​ ​ Stock Options A summary of stock option activity under the Company’s 2020 Plan, 2021 Plan and 2022 Inducement Plan is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining ​ Aggregate ​ ​ ​ ​ Weighted ​ Contractual ​ Intrinsic ​ ​ Number of ​ Average ​ Term ​ Value (1) ​ Stock Options Exercise Price (In years) (In thousands) Outstanding as of December 31, 2022 4,960,553 $ 8.04 8.59 ​ $ 89 Granted 1,530,505 ​ $ 2.69 ​ Exercised ( 156 ) ​ $ 2.69 ​ Cancelled/forfeited ( 403,302 ) ​ $ 7.36 ​ Outstanding as of March 31, 2023 6,087,600 ​ $ 6.74 8.45 ​ $ 962 Exercisable as of March 31, 2023 2,060,294 ​ $ 7.82 7.43 ​ $ 47 ​ (1) The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock as of the end of the period. ​ Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the three months ended March 31, 2023 and 2022 was $ 1.95 and $ 8.83 , respectively. The following assumptions were used in determining the fair value of options granted during the three months ended March 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2023 ​ 2022 ​ Risk-free interest rate ​ ​ 3.97 – 3.98 % ​ 1.47  –  1.89 % Expected dividend yield ​ ​ 0 % ​ 0 % Expected term (in years) ​ ​ 6.02 – 6.08 ​ ​ 6.00  –  6.08 ​ Expected volatility ​ ​ 82.35 % ​ 80.75  – 80.92 % ​ As of March 31, 2023, the Company had unrecognized stock-based compensation expense of $ 16.1 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted-average period of 2.75 years. 15 Table of Contents Restricted Stock A summary of the Company’s restricted stock activity and related information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ Number Weighted ​ ​ of Shares ​ Average ​ ​ of Restricted ​ Grant Date ​ Stock Fair Value Unvested as of December 31, 2022 ​ 46,160 ​ $ 5.51 Vested ​ ( 14,217 ) ​ $ 5.51 Canceled/Forfeited ( 1,229 ) $ 5.51 Unvested as of March 31, 2023 30,714 $ 5.51 ​ In June 2020, the Company granted 552,546 shares of common stock underlying restricted stock awards, and the Company has not subsequently granted any additional restricted stock awards. During the three months ended March 31, 2023 and 2022, the aggregate fair value of the restricted stock awards that vested was less than $ 0.1 million and $ 0.2 million, respectively. As of March 31, 2023, total unrecognized stock-based compensation expense related to unvested restricted stock awards was $ 0.2 million, which is expected to be recognized over a weighted-average period of 0.80 years. 9. Net Loss Per Share The following table sets forth the outstanding shares of common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share attributable to common stockholders during each period because including them would have been anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ ​ 2023 ​ 2022 ​ Unvested restricted common stock 30,714 95,134 Outstanding stock options 6,087,600 4,948,376 Warrants 2,631 2,631 Unvested employee stock purchase plan shares ​ 68,884 ​ — ​ Total common stock equivalents 6,189,829 5,046,141 ​ ​ 16 Table of Contents