Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America or U.S. GAAP.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

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

•

Clinical trial expenses and other research and development expenses;

•

Collaboration agreements;

•

Fair value measurements of stock-based compensation and; and

•

Income taxes.

Impact of COVID-19 Pandemic

Impact of

COVID-19 Pandemic

With the ongoing

COVID-19

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

COVID-19

pandemic on its business and operations. The Company continues to evaluate the impact of the COVID-19 global pandemic on patients, healthcare providers and its employees, as well as its operations and the operations of its business partners and healthcare communities. In response to the COVID-19 pandemic, the Company has implemented policies at its locations to mitigate the risk of exposure to COVID-19 by its personnel, 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 our personnel. The extent to which the

COVID-19

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

healthcare systems and the other risks and uncertainties associated with the

COVID-19

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

Subsequent Events

The Company evaluated all events and transactions that occurred after the balance sheet date through the date of the Annual Report. Except as disclosed below, the Company did not have any material subsequent events that impacted its financial statements or disclosures.

On February 4, 2021, the Company entered into an agreement with Watermill Asset Management Corp. and Robert W. Postma. Pursuant to the Settlement Agreement, the Company increased the size of the Company’s Board of Directors from eight to nine directors and appointed Mr. Postma to fill the newly created directorship. Mr. Postma will serve an initial term expiring at the Company’s 2021 annual meeting of stockholders. Additionally, the Company agreed to nominate each of Mr. 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. Postma, Vieser and Weis. Additionally, the Company agreed to reimburse Watermill for up to

$400

thousand of its reasonable out-of-pocket fees and expenses. This agreement also resulted in $1.0 million in strategic advisory services becoming due. These costs were expensed during the year ended

December 31, 2020 and included in accrued expenses on the balance sheet.

Organizational Changes

During the year ended December 31, 2020 there were changes in the members of the Board of Directors. The following Directors left during the quarter: Scott Braunstein on November 16, 2020, Elan Ezickson on December 3, 2020, and Scott Tarriff on December 15, 2020. Messers. Braunstein and Ezickson received an extended period to exercise stock options along accelerated vesting of restricted stock. In turn, the following Directors joined the board: Mary Thistle on November 15, 2020, Jaime Vieser on December 15, 2020, and Holger Weis on December 15, 2020.

On December 10, 2020, Satyavrat Shukla notified the Company of his decision to resign from the position of Chief Financial Officer of the Company, effective December 31, 2020. Included in his separation agreement, Mr. Shukla was to receive his annual bonus which was accrued at December 31, 2020.

Additionally, 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. Ms. Hagen is remaining a member of the Board of Directors. Dr. Cooper is also stepping down from his seat on the Board of Directors and is expected to continue with the Company in a scientific advisory capacity to support the Company’s R&D programs.

Cash and Cash Equivalents

Cash equivalents consist primarily of demand deposit accounts, certificates of deposit and deposits in short-term U.S. treasury money market mutual funds. Cash equivalents are stated at cost, which approximates fair market value.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk

consist

principally of cash and cash equivalents. The Company maintains cash accounts in commercial banks, which may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Property and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized. Depreciation and amortization is calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets:


●	Office and computer equipment	3 years
●	Software	3 years
●	Laboratory equipment	5 years
●	Leasehold improvements	Life of the lease

Costs, including certain design, construction and installation costs related to assets that are under construction and are in the process of being readied for their intended use, are recorded as construction in progress and are not depreciated until such time as the subject asset is placed in service. Repairs and maintenance that do not extend the useful life of the asset are expensed as incurred. 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 our 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. 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. 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

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. The Company views its operations and manages its business in one operating segment and does not track expenses on a

program-by-program

basis.

Warrants

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’ equity in accordance with Financial Accounting Standards Board (“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.

Fair Value Measurements

The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

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

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


($ in thousands)			Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2020		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	75,990	$	75,990	$	—	$	—


($ in thousands)			Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2019		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	68,031	$	68,031	$	—	$	—

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.

Revenue Recognition from Collaboration Agreements

The Company adopted Accounting Standards Codification, or ASC Topic 606,

Revenue from Contracts with Customers,

or ASC 606, using the modified retrospective approach on January 1, 2018. The Company completed

its assessment and the implementation resulted in a cumulative effect adjustment to accumulated deficit as of January 1, 2018 of approximately $8.1 million and a corresponding increase to the contract liability (formerly deferred revenue). The adjustment to the Company’s financial statements due to the adoption of ASC 606 is related to the Company’s Ares Trading Agreement (Note 6), which was the Company’s sole open revenue contract outstanding at January 1, 2018.

There was no revenue for the years ended December 31, 2020 and 2019.

The Company primarily generates revenue through collaboration arrangements with strategic partners for the development and commercialization of product candidates. Commencing January 1, 2018, the Company recognized revenue in accordance with ASC 606 which replaced ASC 605,

Multiple Element Arrangements

, as used in historical years. 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. To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) each performance obligation is satisfied.

The Company recognizes collaboration revenue under certain of the Company’s license or collaboration agreements that are within the scope of ASC 606. The Company’s contracts with customers typically include promises related to licenses to intellectual property, research and development services and options to purchase additional goods and/or services. 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. 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. 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. If so, the option is accounted for as a separate performance obligation. If not, the option is considered a marketing offer which would be accounted for as a separate contract upon the customer’s election.

The terms of the Company’s arrangements with customers typically include the payment of one or more of the following:

(i) non-refundable,

up-front

payment, (ii) development, regulatory and commercial milestone payments, (iii) future options and (iv) royalties on net sales of licensed products. Accordingly, the transaction price is generally comprised of a fixed fee due at contract inception and variable consideration in the form of milestone payments due upon the achievement of specified events and tiered royalties earned when customers recognize net sales of licensed products. The Company measures the transaction price based on the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods and/or services to the customer. The Company utilizes the most likely amount method to estimate the amount of variable consideration, to predict the amount of consideration to which it will be entitled for its one open contract. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the associated event is considered probable of achievement and estimates the amount to be included in the transaction price using the most likely amount method. Milestone payments that are not within the control of the Company or the licensee, such as those dependent upon receipt of regulatory approval, are not considered to be probable of achievement until the triggering event occurs. At the end of each reporting period, the Company reevaluates the probability of achievement of each milestone and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative

catch-up

basis, which would affect revenue and net loss in the period of adjustment. For arrangements that include sales-based royalties, including milestone

payments based upon the achievement of a certain level of product sales, the Company recognizes revenue upon the later of: (i) when the related sales occur or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any development, regulatory or commercial milestones or royalty revenue resulting from any of its collaboration arrangements. Consideration that would be received for optional goods and/or services is excluded from the transaction price at contract inception.

The Company allocates the transaction price to each performance obligation identified in the contract on a relative standalone selling price basis. However, certain components of variable consideration are allocated specifically to one or more particular performance obligations in a contact to the extent both of the following criteria are met: (i) the terms of the payment relate specifically to the efforts to satisfy the performance obligation or transfer the distinct good or service and (ii) allocating the variable amount of consideration entirely to the performance obligation or the distinct good or service is consistent with the allocation objective of the standard whereby the amount allocated depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services. The Company develops assumptions that require judgment to determine the standalone selling price for each performance obligation identified in each contract. The key assumptions utilized in determining the standalone selling price for each performance obligation may include forecasted revenues, development timelines, estimated research and development costs, discount rates, likelihood of exercise and probabilities of technical and regulatory success.

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. 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. The Company uses input methods to measure the progress toward the complete satisfaction of performance obligations satisfied over time. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Any such adjustments are recorded on a cumulative

catch-up

basis, which would affect revenue and net loss in the period of adjustment.

The Company recognized the upfront payment received in 2015 associated with a former open contract as a contract liability upon receipt of payment as it requires deferral of revenue recognition to a future period until the Company performs its obligations under the arrangement. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date were classified in current liabilities. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date were classified as contract liabilities, net of current portion. The Company determined that there were three performance obligations; the first performance obligation consists of the license and research development services and the other two performance obligations are material rights as it relates to potential future targets that have not yet been identified. As described above, the transaction price of $57.5 million was allocated to the performance obligations based on their relative standalone selling prices.

There were multiple distinct performance obligations, including material rights; thus, the Company allocated the transaction price to each distinct performance obligation based on its relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or using expected cost-plus margin. Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure. Furthermore, the Company has not capitalized any contract costs under the guidance in ASC

340-40,

Other Assets and Deferred Costs: Contracts with Customers

The Company did not believe

that any variable

consideration

should be included in the transaction

price at the date of adoption

of ASC 606 on January 1, 2018. Such assessment considered the application of the constraint to ensure that estimates of variable consideration would be included in the transaction price only to the extent the Company had a high degree of confidence that revenue would not be reversed in a subsequent reporting period. The Company will re-evaluate the transaction price, including the estimated variable consideration

included in the transaction price and all constrained amounts, in each reporting period and as other changes in

circumstances

occur.

Impact of Topic 606 Adoption

As a result of adopting ASC 606, the Company recorded an $8.1 million adjustment to the opening balance of accumulated deficit in the first quarter of 2018 as a result of the treatment of the

up-front

consideration receive

in July

2015

under ASC

605-25

versus ASC 606. Refer below for a summary of the amount by which each financial statement line item was affected by the impact of the cumulative adjustment:


($ in thousands)	Impact of Topic 606 Adoption on the Balance Sheet as of January 1, 2018
Description	As reported under Topic 606			Adjustments			Balances without adoption of Topic 606
Contract liability, current portion	$	622		$	(5,767	)	$	6,389
Contract liability, net of current portion	$	49,037		$	13,898		$	35,139
Accumulated deficit	$	(720,573	)	$	(8,131	)	$	(712,442	)


($ in thousands)	Impact of Topic 606 Adoption on the Statement of Operations for the Year Ended December 31, 2018
Description	As reported under Topic 606			Adjustments			Balances without adoption of Topic 606
Collaboration revenue	$	146		$	(4,732	)	$	4,878
Net loss	$	(53,117	)	$	(4,732	)	$	(48,385	)
Net income (loss) applicable to common shareholders	$	137,246		$	(4,732	)	$	141,978
Net income (loss) per share - basic	$	0.96		$	(0.03	)	$	0.99
Net income (loss) per share - diluted	$	0.96		$	(0.03	)	$	0.99


($ in thousands)	Impact of Topic 606 Adoption on the Statement of Cash Flows for the Year Ended December 31, 2018
Description	As reported under Topic 606			Adjustments			Balances without adoption of Topic 606
Net loss	$	(53,117	)	$	(4,732	)	$	(48,385)
Changes in contract liability	$	—		$	—		$	—

The most significant change above relates to the Company’s collaboration revenue, which to date has been exclusively generated from its collaboration arrangement with Ares Trading and PGEN Therapeutics, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation, (

Note 7

). Under ASC 605, the Company accounted for the up-front payment over the estimated period of performance of

the research and development services which

was estimated to be 9 years. In

connection

with the adoption of ASC 606

, the Company uses cost-based input method to

measure

progress because such method best reflects the satisfaction of the performance obligation. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to the budgeted costs to complete the research programs. These costs consist primarily of internal full-time equivalent effort and third-party contract costs. Revenue is recognized based on actual costs incurred as a percentage of total budgeted costs. As a result, although the performance obligations noted above and identified under ASC 606

were generally consistent with the units of account identified under ASC 605

, the timing of the allocation of the transaction price to the identified performance obligations under ASC 606

differed from the allocations of consideration under ASC 605

. Accordingly, the transaction price ultimately allocated to each performance obligation under ASC 606

differed from the amounts allocated under ASC 605

. Additionally, at December 31

, 2018

, the contract liability is $0 under both methods of revenue recognition (Note 7)

. There is no

revenue related to the years ended December 31

, 2020

and 2019

Research and Development Costs

As part of the process of preparing our

financial

statements

, we are required to

estimate

our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. The majority of our service providers invoice us in arrears for services performed, on a predetermined schedule or when contractual milestones are met; however, a few require advanced payments. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:

•

CROs in connection with performing research services on our behalf and clinical trials,

•

investigative sites or other providers in connection with clinical trials,

•

vendors in connection with preclinical and clinical development activities, and

•

vendors related to product manufacturing, development, and distribution of preclinical and clinical supplies.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs that conduct and manage clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed, enrollment of patients, number of sites activated and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or amount of prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period. To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses.

Income Taxes

Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

The Company accounts for uncertain tax positions using a

“more-likely-than-not”

threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates this tax position on an annual basis. The Company also accrues for potential interest and penalties, related to unrecognized tax benefits in income tax expense (Note 11).

Accounting for Stock-Based Compensation

Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite service period. Stock-based compensation expense is based on the number of awards ultimately expected to vest and is therefore reduced for an estimate of the awards that are expected to be forfeited prior to vesting. 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.

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, 2020, 2019, and 2018 and did not capitalize any such costs on the balance sheets. The Company recognized $4.3 million, $4.0 million, and $3.0 million of compensation expense related to stock options during the years ended December 31, 2020, 2019, and 2018, respectively. In the years ended December 31, 2020, 2019, and 2018, the Company recognized $2.5 million, $2.3 million, and $4.5 million of compensation expense, respectively, related to restricted stock (Note 14). The total compensation expense relating to vesting of stock options and restricted stock awards for the years ended December 31, 2020, 2019, and 2018 was $6.8 million, $6.3 million, and $7.5 million, respectively.The following table presents share-based compensation expense included in the Company’s Statements of Operations:


	Year ended December 31,
(in thousands)	2020		2019		2018
Research and development	$	2,098	$	1,461	$	1,683
General and administrative		4,731		4,880		5,851

Share based employee compensation expense before tax		6,829		6,341		7,534

Income tax benefit		—		—		—

Net share based employee compensation expense	$	6,829	$	6,341	$	7,534

The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model. The estimated weighted-average fair value of stock options granted to employees in 2020, 2019, and 2018 was


	2020	2019	2018
Weighted average risk-free interest rate	0.36 - 1.68%	1.39 - 2.53%	2.55 - 3.06%
Expected life in years	5.75 - 6.25	5.75 - 6.25	6
Expected volatility	71.11 - 74.41%	71.39 - 85.00%	80.75 - 84.71%
Expected dividend yield	0	0	0

approximately

$2.15, $2.47, and $1.64 per share, respectively. Assumptions regarding

volatility,

expected

term, dividend yield and risk-free interest rate are required for the Black-Scholes model. The volatility assumption is based on the Company’s historical experience. The risk-free interest rate is based on a U.S. treasury note with a maturity similar to the option award’s expected life. The expected life represents the average period of time that options granted are expected to be outstanding. The Company calculated expected term using the simplified method described in SEC Staff Accounting Bulletin, or SAB, No

. 107

and No

. 110

as it continues to meet the requirements promulgated in SAB No

. 110

. The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:

Net Income (Loss) Per Share

Basic net loss per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding options and warrants, using the treasury stock method and the average market price of the Company’s common stock during the applicable period.


	For the Year Ended December 31,
in thousands, except share and per share data	2020			2019			2018
Basic
Net loss	$	(79,976	)	$	(117,796	)	$	(53,117	)
Preferred stock dividends		—			—			(16,998	)
Settlement of a related party relationship		—			—			207,361

Net income / (loss) applicable to common shareholders	$	(79,976	)	$	(117,796	)	$	137,246

Weighted-average common shares outstanding		209,636,456			167,952,114			143,508,674

Earnings per share, basic	$	(0.38	)	$	(0.70	)	$	0.96

Diluted
Net Loss	$	(79,976	)	$	(117,796	)	$	(53,117	)
Preferred stock dividends		—			—			(16,998	)

Precigen license transaction		—			—			207,361
Net income / (loss) applicable to common shareholders	$	(79,976	)	$	(117,796	)	$	137,246
Weighted-average common shares outstanding		209,636,456			167,952,114			143,508,674


	For the Year Ended December 31,
in thousands, except share and per share data	2020			2019			2018
Effect of dilutive securities
Stock options		—			—			201,362
Unvested restricted common stock		—			—			124
Warrants		—			—			—
Dilutive potential common shares		—			—			201,486
Shares used in calculating diluted earnings per share		209,636,456			167,952,114			143,710,160
Earnings per share, diluted	$	(0.38	)	$	(0.70	)	$	0.96

Certain shares related to some of the Company’s outstanding common stock options, unvested restricted stock, preferred stock, and warrants have not been included in the computation of diluted net earnings (loss) per share for the years ended December

2020

2019

and

2018

as the result would be

antidilutive.

Such potential common shares on December 31

2020

2019

, and

2018

consist of the following:


	December 31,
	2020		2019		2018
Stock options		6,832,386		6,872,879		5,075,723
Inducement stock options		588,333		1,030,000		500,000
Unvested restricted stock		786,280		939,636		681,946
Warrants		22,272,727		22,272,727		18,939,394

		30,479,726		31,115,242		25,197,063

During the year ended December 31, 2018, the Company and PGEN entered into a License Agreement to replace all existing agreements between the companies that provides the Company with certain exclusive and

non-exclusive

rights to technology controlled by PGEN. The License Agreement was dated October 5, 2018. In consideration of the Company entering into the License Agreement, Precigen agreed to forfeit and return to the Company all shares of the Company’s Series 1 Preferred Stock held by or payable to Precigen as of the date of the License Agreement (Note 7).

New Accounting Pronouncements

In December 2019, the FASB issued ASU

2019-12,

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

, which is intended to simplify various aspects related to accounting for income taxes. ASU

2019-12

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