10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to        

Commission File Number: 001-39580

Immunome, Inc.

(Exact name of registrant as specified in its charter)

Delaware	77-0694340
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
665 Stockton Drive, Suite 300 Exton, PA	19341
(Address of principal executive offices)	(Zip Code)

(610) 321-3700

(Registrant’s telephone number, including area code)

Not applicable.

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	IMNM	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒	Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

There were 12,128,843 shares of the registrant’s common stock outstanding as of November 10, 2022.

IMMUNOME, INC.

Quarterly Report on Form 10-Q for the Quarterly Period ended September 30, 2022

Table of Contents

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	-    Condensed Balance Sheets as of September 30, 2022 and December 31, 2021	3
	-    Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	4
	-    Condensed Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	5
	-    Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
	-    Notes to Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	30
Item 4.	Controls and Procedures.	30
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	31
Item 1A.	Risk Factors.	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	31
Item 3.	Defaults Upon Senior Securities.	31
Item 4.	Mine Safety Disclosures.	31
Item 5.	Other Information.	31
Item 6.	Exhibits.	32
	SIGNATURES

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

IMMUNOME, INC.

Condensed Balance Sheets

(In thousands, except share data)

(unaudited)

	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	27,078	$	49,229
Prepaid expenses and other current assets		2,161		7,409
Total current assets		29,239		56,638
Property and equipment, net		704		855
Operating right-of-use asset, net		171		—
Restricted cash		100		100
Deferred offering costs		332		332
Total assets	$	30,546	$	57,925
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,139	$	3,077
Accrued expenses and other current liabilities		4,230		6,651
Total current liabilities		7,369		9,728
Other long-term liabilities		93		12
Total liabilities		7,462		9,740
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2022 and December 31, 2021, respectively		—		—
Common stock, $0.0001 par value; 200,000,000 shares authorized; 12,127,594 and 12,110,373 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		1		1
Additional paid-in capital		131,298		127,289
Accumulated deficit		(108,215)		(79,105)
Total stockholders’ equity		23,084		48,185
Total liabilities and stockholders’ equity	$	30,546	$	57,925

The accompanying notes are an integral part of these unaudited condensed financial statements.

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IMMUNOME, INC.

Condensed Statements of Operations

(In thousands, except share and per share data)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating expenses:
Research and development	$	5,225	$	4,513	$	19,020	$	9,725
General and administrative		3,309		3,210		10,094		7,635
Total operating expenses		8,534		7,723		29,114		17,360
Loss from operations		(8,534)		(7,723)		(29,114)		(17,360)
Other income		—		6		—		506
Interest income (expense), net		1		(3)		4		(5)
Net loss	$	(8,533)	$	(7,720)	$	(29,110)	$	(16,859)
Deemed dividend arising from warrant modification		(622)		—		(622)		—
Net loss attributable to common stockholders	$	(9,155)	$	(7,720)	$	(29,732)	$	(16,859)
Per share information:
Net loss per share of common stock, basic and diluted	$	(0.75)	$	(0.65)	$	(2.45)	$	(1.49)
Weighted-average common shares outstanding, basic and diluted		12,127,501		11,934,491		12,125,947		11,348,856

The accompanying notes are an integral part of these unaudited condensed financial statements.

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IMMUNOME, INC.

Condensed Statements of Changes in Stockholders’ Equity

(In thousands, except share data)

(unaudited)

	Stockholders’ equity
	Common stock			Additional
				paid-in		Accumulated
	Shares	Amount		capital		deficit		Total
Balance at June 30, 2022	12,127,385	$	1	$	129,958	$	(99,682)	$	30,277
Share-based compensation expense	—		—		1,340		—		1,340
Exercise of stock options	209		—		—		—		—
Net loss	—		—		—		(8,533)		(8,533)
Balance at September 30, 2022	12,127,594	$	1	$	131,298	$	(108,215)	$	23,084
	Stockholders’ equity
	Common stock			Additional
				paid-in		Accumulated
	Shares	Amount		capital		deficit		Total
Balance at January 1, 2022	12,110,373	$	1	$	127,289	$	(79,105)	$	48,185
Share-based compensation expense	—		—		3,977		—		3,977
Exercise of stock options	17,221		—		32		—		32
Net loss	—		—		—		(29,110)		(29,110)
Balance at September 30, 2022	12,127,594	$	1	$	131,298	$	(108,215)	$	23,084
	Stockholders’ equity
	Common stock			Additional
				paid-in		Accumulated
	Shares	Amount		capital		deficit		Total
Balance at June 30, 2021	11,812,792	$	1	$	124,149	$	(63,533)	$	60,617
Sale of common stock	14,115		—		262		—		262
Share-based compensation expense	—		—		1,155		—		1,155
Exercise of common stock warrants	47,958		—		432		—		432
Exercise of stock options and settlement of RSUs	218,468		—		47		—		47
Net loss	—		—		—		(7,720)		(7,720)
Balance at September 30, 2021	12,093,333	$	1	$	126,045	$	(71,253)	$	54,793
	Stockholders’ equity
	Common stock			Additional
				paid-in		Accumulated
	Shares	Amount		capital		deficit		Total
Balance at January 1, 2021	10,634,245	$	1	$	95,738	$	(54,394)	$	41,345
Sale of common stock and common stock warrants, net of $559 in offering costs	1,014,115		—		26,666		—		26,666
Share-based compensation expense	—		—		2,229		—		2,229
Exercise of common stock warrants	193,975		—		1,338		—		1,338
Exercise of stock options and settlement of RSUs	250,998		—		74		—		74
Net loss	—		—		—		(16,859)		(16,859)
Balance at September 30, 2021	12,093,333	$	1	$	126,045	$	(71,253)	$	54,793

The accompanying notes are an integral part of these unaudited condensed financial statements.

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IMMUNOME, INC.

Condensed Statements of Cash Flows

(In thousands)

(unaudited)

	Nine Months ended September 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(29,110)	$	(16,859)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		327		637
Amortization of right-of-use asset		44		—
Share-based compensation		3,977		2,229
Deferred rent		—		(8)
Forgiveness of PPP Loan		—		(500)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		5,236		(1,819)
Accounts payable		62		2,088
Accrued expenses and other current liabilities		(2,471)		2,811
Other long-term liabilities		(72)		-
Net cash used in operating activities		(22,007)		(11,421)
Cash flows from investing activities:
Purchases of property and equipment		(176)		(65)
Net cash used in investing activities		(176)		(65)
Cash flows from financing activities:
Proceeds from sale of common stock and common stock warrants		—		27,225
Payment from issuance costs related to the sale of common stock and common stock warrants		—		(559)
Proceeds from exercise of stock options		32		74
Proceeds from exercise of common stock warrants		—		1,338
Payment of offering costs		—		(18)
Payment of equipment loan payable		—		(97)
Net cash provided by financing activities		32		27,963
Net (decrease) increase in cash and cash equivalents and restricted cash		(22,151)		16,477
Cash and cash equivalents and restricted cash at beginning of period		49,329		39,866
Cash and cash equivalents and restricted cash at end of period	$	27,178	$	56,343
Supplemental disclosures of cash flow information:
Operating lease right-of-use asset and lease liability recorded upon adoption of ASC 842	$	215	$	—
Offering costs included in accrued expenses and other current liabilities	$	—	$	289
Purchases of property and equipment included in accounts payable	$	—	$	2

The accompanying notes are an integral part of these unaudited condensed financial statements.

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IMMUNOME, INC.

Notes to Condensed Financial Statements

(Unaudited)

1. Nature of the business

Organization

Immunome, Inc. (“the Company” or “Immunome”) is a clinical stage biopharmaceutical company. The Company was incorporated as a Pennsylvania corporation on March 2, 2006 and was converted to a Delaware corporation on December 2, 2015. The Company is utilizing a proprietary human memory B cell platform to discover and develop first-in-class antibody therapeutics designed to change the way diseases are currently being treated. The Company’s primary focus areas are oncology and infectious disease, including COVID-19.

Since its inception, the Company has devoted substantially all its resources to research and development, raising capital, building its management team and extending its intellectual property portfolio. 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, uncertain results of preclinical and clinical testing, development of new technological innovations and products by competitors, dependence on key personnel and third-party vendors, protection of proprietary technology, compliance with government regulations, regulatory approval of product candidates and the ability to secure additional capital to fund operations.

Liquidity

The Company has incurred net losses since inception, including net losses of $29.1 million and $16.9 million for the nine months ended September 30, 2022 and 2021, respectively, and it expects to generate losses from operations and negative operating cash flows for the foreseeable future primarily due to research and development costs for its potential product candidates. As of September 30, 2022, the Company had an accumulated deficit of $108.2 million.

On October 1, 2021, the Company entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of common stock under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent. The Company filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (“SEC”) on October 14, 2021, pursuant to which the Company may issue from time-to-time securities with an aggregate value of up to $200.0 million. The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement.

The Company had cash and cash equivalents of $27.1 million at September 30, 2022. The Company expects that its cash will enable it to fund its operating expenses and capital expenditure requirements for at least 12 months from the filing date of this Quarterly Report on Form 10-Q; however; more funding will be necessary beyond this point to fund additional research and development, clinical development and operations in order to pursue the Company’s growth strategy. 

If the Company cannot obtain the necessary funding, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties relative to potential programs, products or technologies that it might otherwise seek to progress independently (or enter into these collaborations sooner than it might otherwise have intended to); consider various other strategic alternatives, including a possible merger or sale of the Company; or reduce or cease operations. If the Company engages in collaborations under these circumstances, it may receive lower consideration than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the research and development process. Additionally, volatility in the capital markets generally and the biotechnology sector specifically, as well as general economic conditions in the United States may be a significant obstacle to raising the required funds on satisfactory terms, if at all.

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Operations of the Company are subject to certain risks and uncertainties including various internal and external factors that will affect whether and when the Company’s programs and product candidates become approved drugs and how significant their market share will be, many of which are outside of the Company’s control. The length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The Company is also subject to risks and uncertainties as a result of the ongoing COVID-19 pandemic. Although there is uncertainty as to the extent of the continued impact of the COVID-19 pandemic, including the continued impact to capital markets and economies worldwide in the form of economic slowdowns or recession, there has not been a significant impact to the Company’s operations or financial statements to date.

2. Summary of significant accounting policies

Basis of presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

Unaudited interim results

These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 28, 2022. The accompanying condensed financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 are unaudited but have been prepared on the same basis as the annual audited financial statements and include all adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Condensed balance sheet amounts as of December 31, 2021 have been derived from the audited financial statements as of that date.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the expected volatility used to estimate fair value of stock options and accrued research and development expenses. Estimates and assumptions are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from these estimates.

Segment and geographic information

Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker (the “CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer. The Company views its operations as, and manages its business in, one operating segment operating exclusively in the United States of America.

Fair value of financial instruments

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset

8

or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following:

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

Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.

Level 3 — Unobservable inputs for the asset or liability (i.e.; supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Cash and cash equivalents and restricted cash are Level 1 assets as of September 30, 2022 and December 31, 2021.

Restricted cash

Restricted cash represents collateral provided for a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate facilities. Cash will be released from restriction upon termination of the lease. Restricted cash was $100,000 at both September 30, 2022 and 2021, respectively. The following table provides a reconciliation of the components of cash and cash equivalents and restricted cash presented in the condensed statements of cash flows:

(in thousands)	September 30, 2022		September 30, 2021
Cash and cash equivalents	$	27,078	$	56,243
Restricted cash		100		100
	$	27,178	$	56,343

Equity issuance costs

The Company capitalized costs that were directly associated with establishing the ATM Agreement and shelf registration statement in 2021. These costs will remain capitalized until such financings are consummated, at which time such costs will be recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. Ongoing costs that are directly associated with the ATM Agreement are expensed as incurred.

Deferred offering costs were $0.3 million as of each of September 30, 2022 and December 31, 2021, respectively, on the condensed balance sheet.

Government assistance programs

The Company accounts for amounts received under its U.S. Department of Defense (“DoD”) expense reimbursement contract as contra-research and development expenses in the condensed statements of operations. The Company accounts for the employee retention credit received under the U.S. Department of Treasury Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) as contra-expense to personnel related costs within research and development and general and administrative expenses in the condensed statements of operations.

9

Research and development costs

Research and development costs are charged to expense as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, share-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, preclinical and clinical development expenses, including manufacture and testing of clinical supplies, consulting and other contracted services. Additionally, under the terms of the license agreements described in Note 7, the Company is obligated to make future payments should certain development and regulatory milestones be achieved. Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the timing of receipt of invoices and payment of invoices and are reflected in the financial statements as a prepaid or accrued expense.

Share-based compensation

The Company’s share-based compensation program allows for grants of stock options and restricted stock awards. Grants are awarded to employees and non-employees, including directors.

The Company accounts for its share-based compensation awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognized compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognized compensation expense on a straight-line basis over the service period. The Company classified share-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

The Company estimates the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of Company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and biopharmaceutical industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The exercise price is the fair value of the common stock as of the measurement date.

Net loss per share

Basic net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share of common stock is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share of common stock is computed by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents.

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The following potentially dilutive securities outstanding as of September 30, 2022 and 2021 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2022	2021
Stock options(1)	2,509,759	1,936,546
Common stock warrants(1)	1,303,112	1,314,223
	3,812,871	3,250,769

(1) Represents common stock equivalents.

In periods in which the Company reports a net loss per share of common stock, diluted net loss per share of common stock is the same as basic net loss per share of common stock since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss per share of common stock for the three and nine months ended September 30, 2022 and 2021.

Leases

Effective January 1, 2022, the Company adopted ASU No. 2016-02, Leases (“ASC 842”) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date. The results for reporting periods beginning after January 1, 2022 are presented in accordance with ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards that were in effect prior to January 1, 2022.

At the inception of an arrangement, the Company determines whether an arrangement contains a lease based on facts and circumstances present in the arrangement. An arrangement is or contains a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Typically, lessees are required to recognize leases with a term greater than one year on the balance sheet as an operating or finance lease liability and right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company has elected the practical expedient to not recognize leases with a term of 12 months or less. The Company does not have any financing leases as of September 30, 2022.

Operating lease liabilities and their corresponding right-of-use assets are recorded based on their present value of lease payments over the remaining lease term. Options to extend the lease term are included in the Company’s assessment of the lease term only if there is a reasonable assessment that the Company will renew. Leases are discounted to its present value using either the interest rate implicit in the Company’s lease or its incremental borrowing rate, which reflects the fixed rate in which the Company could borrow on a collateralized basis the amount of lease payments in the same currency, for a similar term, in a similar economic environment.

Recently adopted accounting standards

On January 1, 2022, the Company adopted ASC 842, which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840. The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements. The Company adopted ASC 842 using the modified retrospective approach. The Company elected the package of practical expedients available for existing contracts, which allowed the Company to carry forward its historical assessments of lease identification, lease classification, and initial direct costs. The Company also elected a policy to not apply the recognition requirements of ASC 842 for short-term leases with a term of 12 months or less.

As of January 1, 2022, the effective date, the Company identified one operating lease arrangement relating to the Company’s headquarters facility and one short-term lease relating to laboratory equipment. The adoption of ASC 842 resulted in a recognition of an ROU asset and lease liability of $0.2 million on the Company’s condensed balance sheet

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relating to the leases as of January 1, 2022. The adoption of the standard did not have a material effect on the Company’s condensed statements of operations and condensed statements of cash flows (Note 8).

Recently issued accounting pronouncements

In November 2021, the FASB issued ASU Topic 832, Disclosures by Business Entities about Government Assistance (“ASC 832”). This standard requires annual disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect of the transactions on an entity’s financial statements. The effective date of ASC 832 is for financial statements issued for annual periods beginning after December 15, 2021. The Company is currently evaluating the effect ASC 832 will have on its financial statements and related disclosures.

3. Government assistance programs

DoD expense reimbursement contract

In July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (as amended, the “OTA Agreement”) with the DoD to fund the Company’s efforts in developing an antibody cocktail therapeutic to treat COVID-19. The amount of funding originally made available to the Company under the OTA Agreement was $13.3 million. In May 2021, the Company and the DoD amended the OTA Agreement, pursuant to which the DoD award was increased from $13.3 million to $17.6 million. Under the OTA Agreement, the DoD is required to pay the Company, upon submission of proper invoices, within 30 calendar days of receipt of request for payment.

The Company recorded contra-research and development expense related to the OTA Agreement of $0.0 million and $5.3 million for the three months ended September 30, 2022 and 2021, respectively, and $0.6 million and $13.4 million for the nine months ended September 30, 2022 and 2021, respectively, in the condensed statements of operations. The Company had an expense reimbursement receivable balance of $0.2 million and $2.7 million due from the DoD in prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets.

Costs that have been reimbursed by the DoD but not yet expensed by the Company are recorded as a deferred research obligation liability for the period. The Company has a deferred research obligation liability of $0.0 million and $2.0 million as of September 30, 2022 and December 31, 2021, respectively. This amount is included in accrued expenses and other liabilities in the accompanying condensed balance sheets. DoD reimbursable services that have been performed but not yet billed are recorded as an unbilled receivable in prepaid expenses and other current assets in the accompanying condensed balance sheets. The Company had an unbilled receivable from the DoD of $0.0 and $1.6 million as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022, the Company has received $17.4 million in expense reimbursement from the DoD under the OTA Agreement.

CARES Act employee retention credit

Under the CARES Act, the Company met eligibility criteria for a $0.8 million refundable employee retention credit. The Company recorded contra-expense to personnel related costs within research and development expense and general and administrative expense of $0.0 for the three months ended September 30, 2022 and contra-expense to research and development expense of $0.6 million and general administrative expense of $0.2 million for the nine months ended September 30, 2022, respectively, in the condensed statements of operations. No such amounts were recognized for the three and nine months ended September 30, 2021. The Company had an employee retention credit receivable balance due from the U.S. Department of Treasury of $0.8 million and $0.0 in prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets.

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4. Prepaid expenses and other assets

Prepaid expenses and other assets consisted of the following:

(in thousands)	September 30, 2022		December 31, 2021
CARES Act employee retention credit receivable	$	847	$	—
Research and development advance payments		530		586
Other prepaids and short-term deposits		324		492
Reimbursement receivable from DoD		243		2,674
Prepaid insurance		217		2,019
Unbilled reimbursement receivable from DoD		—		1,638
	$	2,161	$	7,409

5. Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following:

(in thousands)	September 30, 2022		December 31, 2021
Research and development	$	2,514	$	2,840
Compensation and related benefits		1,367		1,246
Professional fees		236		227
Short-term operating lease liability and other liabilities		91		317
Deferred research obligations		22		2,021
	$	4,230	$	6,651

6. Long-term debt

On April 30, 2020, the Company entered into a loan agreement with Silicon Valley Bank as the lender (“Lender”) for a loan in an aggregate principal amount of $0.5 million (“PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act and implemented by the U.S. Small Business Administration (“SBA”). The Company used the proceeds of the PPP Loan for payroll and other qualifying expenses. The entire PPP Loan was forgiven on May 21, 2021 and recognized as other income in the condensed statements of operations.

7. Commitments and contingencies

Employment agreements

The Company entered into employment agreements (the “Employment Agreements”) with certain key personnel providing for compensation and severance in certain circumstances, as defined in the respective Employment Agreements. The Employment Agreements may be terminated by either the Company or the employees in accordance with the respective Employment Agreements (subject to the payment of severance upon certain terminations) and provide for annual pay adjustments and bonuses at the discretion of the Board of Directors.

Employee benefit plan

The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company assumes all administrative costs of the 401(k) Plan and makes matching contributions as defined in the 401(k) Plan document. The Company made matching contributions of $0.1 million to the 401(k) Plan for each of the three months ended September 30, 2022 and 2021, respectively, and $0.2 million and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively.

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Legal proceedings

The Company is not a party to any material litigation and does not have contingency reserves established for any litigation liabilities. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.

License agreements

The Company entered into various license agreements to further discover, develop and commercialize certain technologies and treatments. The Company may need to pay developmental and regulatory milestone payments of up to approximately $2.6 million. In addition, the Company may need to pay royalty rates on net product sales, a portion of certain sublicense and collaboration payments, and certain commercial milestone payments of up to approximately $1.5 million, if any.

The Company recorded $0.0 million and $0.1 million in milestone payments during the three and nine months ended September 30, 2022, respectively, in research and development expenses in the condensed statements of operations. No such costs were recorded during the three and nine months ended September 30, 2021, respectively.

8. Leases

In May 2017, the Company entered into a 62-month office and laboratory space lease commencing on July 1, 2017 for approximately 11,000 square feet of space in Exton, Pennsylvania. The Company has an option to extend the lease for up to two additional five-year terms. In December 2021, the Company extended the lease for an additional eighteen-month term ending in March 2024.

Beginning July 2021, the Company leased laboratory equipment on a month-to-month basis. In April 2022, the Company terminated the agreement through exercising the option to purchase the leased laboratory equipment under the lease agreement.

Supplemental condensed balance sheet information related to leases as of September 30, 2022 was as follows (in thousands):

Operating leases:
Operating lease right-of-use assets	$	171
Operating lease liability	$	86
Operating lease liability, net of current portion		93
Total operating lease liability	$	179

Operating lease liability and operating lease liability, net of current portion is included in accrued expenses and other current liabilities and other long-term liabilities, respectively, in the accompanying condensed balance sheets.

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Operating lease expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands):

Operating lease cost (in thousands)		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
General and administrative	$	40	$	57
Research and development		20		124
Total lease expense	$	60	$	181

Short term lease expense recorded as research and development expense in the condensed statements of operations for the three and nine months ended September 30, 2022 was $0.0 and $0.1 million, respectively.

Under ASC 840, lease expense was $0.1 million and $0.2 million for the three and nine months ended September 30, 2021, respectively.

Other information related to the operating lease where the Company is the lessee was as follows:

	Nine Months Ended September 30, 2022
Weighted-average remaining lease term (in years)	1.50
Weighted-average discount rate	9.0%

Supplemental cash flow information related to the operating lease was as follows (in thousands):

		Nine Months Ended September 30, 2022
Cash paid for operating lease liability	$	173

As of September 30, 2022, minimum rental commitments under the operating lease were as follows (in thousands):

Years ending December 31,	Amount
2022 (represents remaining three months in 2022)	$	61
2023		246
2024		63
Total lease payments		370
Less imputed interest		(191)
Present value of lease liability	$	179

9. Common stock

Common stock

The holders of common stock are entitled to one vote for each share of common stock. Subject to the approval of the holders of a majority in interest of the Company’s stockholders entitled to vote thereon, the holders of common stock are entitled to receive dividends out of legally available funds. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of common stock are entitled to share ratably in the remaining assets of the Company available for distribution.

On August 4, 2021, the Company sold 14,115 shares of the Company’s common stock for $15.94 per share to a purchaser in accordance with the Stock Purchase Agreement.

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On April 28, 2021, the Company sold 1,000,000 units, each unit comprising one share of the Company’s common stock and one Series B Warrant (each, a “Series B Warrant”) to purchase one-half of a share of common stock. The units were issued in a private placement at a price of $27.00 per unit for gross proceeds of $27.0 million. The Series B Warrants are equity-classified, exercisable at any time, have an exercise price of $45.00 per share and will terminate at three years from the date of issuance. The fair value of the warrants on the date of issuance was $6.0 million. The fair value of the warrants was estimated using a Black-Scholes Option Pricing Model. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants to purchase shares of common stock as of April 28, 2021 included (i) volatility of 82.7%, (ii) risk free interest rate of 0.35%, (iii) strike price of $45.00 per share, (iv) fair value of common stock of $28.70 per share, and (v) expected life of three years. As described below, in September 2022, the Series B Warrants were modified to reduce the strike price to $10.00 per share and to remove the Company’s call right.

Warrants to acquire shares of common stock

On September 2, 2022, the Company notified holders of the Company’s Series B Warrants (the “Holders”) of the Company’s agreement to permit Holders to exercise the Series B Warrants at an exercise price of $10.00 per share (reduced from the previous exercise price of $45.00 per share) at any time prior to the expiration date of the Series B Warrants. The Company recognized a deemed dividend of $0.6 million, which represents the incremental fair value of the outstanding warrants as a result of the modification. This deemed dividend is recorded in the Company's consolidated statement of operations as an increase to the net loss attributable to common stockholders for purposes of computing net loss per share, basic and diluted. The net impact to the condensed statements of changes in stockholders’ equity was zero because the warrants were equity classified before and after the modification.

At September 30, 2022, common stock warrants outstanding were as follows:

Warrants	Warrants Outstanding	Exercise Price per Share	Expiration Date
Series A	803,112	$ 9.00	June 2, 2023
Series B	500,000	$ 10.00	April 28, 2024
	1,303,112

During nine months ended September 30, 2022, no warrants were exercised. During the nine months ended September 30, 2021, 148,653 warrants exercisable for $9.00 per share were exercised, and the Company received proceeds of $1.3 million and 148,653 shares of the Company’s common stock were issued. Additionally, 72,320 warrants exercisable for $9.00 per share were exercised in cashless transactions during the nine months ended September 30, 2021 and 45,322 shares of the Company’s common stock were issued.

10. Share-based compensation

In July 2008, the Board of Directors adopted the 2008 Equity Incentive Plan (the “2008 Plan”) which provided for the grant of qualified incentive stock options and non-qualified stock options, restricted stock or other awards to the Company’s employees, officers, directors, advisors, and outside consultants for the issuance or purchase of shares of the Company’s common stock. The 2008 Plan was replaced in July 2018 with the 2018 Equity Incentive Plan (2018 Plan and collectively with the 2008 Plan, the “Prior Plans”). At the time that the 2008 Plan was terminated, there were 388,748 shares available for grant that were transferred to the 2018 Plan. On September 24, 2020, the 2018 Plan was terminated and replaced with the 2020 Equity Incentive Plan (the “2020 Plan”). Additionally, the number of shares of our common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s Board of Directors. As of September 30, 2022, there were 1,336,088 shares available for future issuance under the 2020 Plan.

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The Company also adopted the 2020 Employee Stock Purchase Plan (“ESPP”) on September 18, 2020 which provides for the grant of purchase rights to purchase shares of the Company’s common stock to eligible employees, as defined by the ESPP. The maximum number of shares of common stock that may be issued under the ESPP will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1 of each calendar year for a period of up to ten years, commencing on the first January 1 following the year in which an IPO occurs and ending on, and including, January 1, 2030, in an amount equal to the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, and (ii) 1,000,000 shares of common stock. As of September 30, 2022, there were 352,446 shares available under the ESPP. No shares of common stock have been issued under the ESPP as of September 30, 2022.

The 2020 Plan and the ESPP are administered by the Board of Directors subject to the Board’s right to delegate to a committee. The exercise prices, vesting and other restrictions are determined at the discretion of the Board of Directors. Stock options awarded under the Prior Plans and the 2020 Plan generally expire 10 years after the grant date unless the Board of Directors sets a shorter term. Vesting periods for awards under the Prior Plans and the 2020 Plan are determined at the discretion of the Board of Directors. Stock options granted to employees, officers, members of the Board of Directors and consultants of the Company typically vest over one to four years. Certain options provide for accelerated vesting if there is a change in control, as defined in the Prior Plans and the 2020 Plan.

Share-based compensation expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	480	$	402	$	1,387	$	924
General and administrative		860		753		2,590		1,305
	$	1,340	$	1,155	$	3,977	$	2,229

Unrecognized compensation cost related to unvested options was $10.5 million as of September 30, 2022 and will be recognized over an estimated weighted average period of 3.1 years.

Stock options

The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:

	Nine Months Ended September 30,
	2022			2021
Expected volatility		85.6	%		83.1	%
Risk-free interest rate		2.7	%		1.0	%
Expected term (in years)		5.97			6.04
Expected dividend yield		—			—
Fair value of common stock	$	3.64		$	23.61

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A summary of option activity under the Plans and 2020 Plan during the nine months ended September 30, 2022 is as follows:

				Weighted
		Weighted		average
		average		remaining
	Number of	exercise price		contractual
	shares	per share		term (years)
Outstanding at January 1, 2022	2,005,756	$	11.26	8.50
Granted	543,900		3.64	9.45
Forfeited	(22,042)		12.20	—
Expired	(634)		17.96	—
Exercised	(17,221)		1.85	7.34
Outstanding at September 30, 2022	2,509,759		9.66	8.12
Exercisable at September 30, 2022	1,111,573		8.41	7.41

The weighted-average grant date fair value per share of stock options granted during the nine months ended September 30, 2022 and 2021 was $2.65 and $17.77, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 was $0.1 million. The aggregate intrinsic value of stock options outstanding at September 30, 2022 is $3.4 million.

Restricted stock awards

During August 2021, the Company granted 13,500 fully vested restricted stock awards. The Company recorded stock-based compensation expense of $0.2 million for the three and nine months ended September 30, 2021 related to the restricted stock awards granted. No such transaction occurred for the three and nine months ended September 30, 2022.

11. Related party transactions

In November 2015, the Company entered into a management services agreement (the “Broadband MSA”) with BCM Advisory Partners LLC and Broadband Capital Partners LLC (collectively “Broadband Capital”). Certain directors of the Company are principals of Broadband Capital. Under the Broadband MSA, the Company engages Broadband Capital as a consultant for advice in connection with senior management matters related to the Company’s business, administration and policies in exchange for a cash fee to Broadband Capital of $20,000 per month. The Broadband MSA was amended and/or restated in July 2016, January 2017, June 2018, March 2020 and August 2020. In June 2021, the Company extended the Broadband MSA to continue through June 2022. The Broadband MSA expired in June 2022. The Company recorded $0.0 million and $0.1 million during the three months ended September 30, 2022 and 2021, respectively, and $0.1 million and $0.2 million during the nine months ended September 30, 2022 and 2021, respectively, related to the Broadband MSA, which is included in general and administrative expenses in the condensed statements of operations. Amounts due to Broadband Capital were $0.1 million and $0 as of September 30, 2022 and December 31, 2021, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations, as well as other sections in this Quarterly Report on Form 10-Q, should be read in conjunction with (i) our unaudited interim financial statements and related notes thereto included elsewhere herein, (ii) Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the United States Securities and Exchange Commission (“SEC”) on March 28, 2022 and (iii) our other public reports filed with the SEC. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts, including express or implied statements regarding Immunome’s beliefs and expectations regarding the advancement of its platform and programs, execution of its regulatory, research, clinical and strategic plans and anticipated upcoming milestones for its platform and programs, including expectations regarding, among other things, the timing and results of its preclinical studies and clinical trials, clinical plans, general regulatory actions, the translation of preclinical data into clinical safety and efficacy, the therapeutic potential and benefits of our product candidates, the possible need and demand for its product candidates, are forward-looking statements. These statements involve known and unknown risks, uncertainties, assumptions and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “should,” ”seek,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events, financial trends and other matters that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ include, but are not limited to, those risks and uncertainties associated with: the impact of the COVID-19 pandemic on Immunome’s business, operations, strategy, goals and anticipated milestones; the fact that research and development data are subject to differing interpretations and assessments; Immunome’s ability to execute on its strategy, including with respect to its R&D efforts, IND submissions and other regulatory filings, timing of these filings and the timing and nature of governmental authority feedback regarding the same, initiation, continuation and completion of any clinical studies, confirmatory testing and other anticipated milestones as and when anticipated; the effectiveness of Immunome’s product candidates, including the possibility that further preclinical data and any clinical trial data may be inconsistent with the data used for advancing the product candidates and that further variants of concern could emerge; Immunome’s ability to fund operations and raise capital; Immunome’s reliance on vendors; the competitive landscape; and the additional risks and uncertainties set forth more fully under the caption “Risk Factors” in Immunome’s Annual Report on Form 10-K filed with the SEC on March 28, 2022, and elsewhere in Immunome’s filings and reports with the SEC. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties. In addition, we may discuss our current and potential future product candidates that have not yet undergone clinical trials or been approved for marketing by the U.S. Food and Drug Administration or other governmental authority, including expectations about their therapeutic potential and benefits thereof. No representation is made as to the safety or effectiveness of these current or potential future product candidates for the use for which such product candidates are being studied. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

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Overview

Since our inception in 2006, we have devoted substantially all our resources to research and development, raising capital, building our management team and building our intellectual property portfolio. To date, we have financed our operations primarily through sales of our common stock, Series A convertible preferred stock and warrants, warrant exercises, the issuance of convertible promissory notes, and the Paycheck Protection Program loan (“PPP loan”) that was forgiven in May 2021. In addition, in July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (“OTA Agreement”), with the Department of Defense (“DoD”) to fund the Company’s efforts in developing an antibody cocktail therapeutic to treat COVID-19. The amount of funding available to the Company under this expense reimbursement contract was $13.3 million. In May 2021, the Company and the DoD amended the OTA Agreement, pursuant to which the DoD award was increased from $13.3 million to $17.6 million. As of September 30, 2022, the Company has received $17.4 million in expense reimbursement from the DoD under the OTA Agreement.

To date, we have not generated any revenue from product sales and do not expect to generate revenue from the sale of products for the foreseeable future. Since inception we have incurred significant operating losses. Our net losses for the three months ended September 30, 2022 and 2021 were $8.5 million and $7.7 million, respectively, and $29.1 million and $16.9 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, we had cash and cash equivalents of $27.1 million. We expect to continue to incur losses for the foreseeable future. We expect to continue to incur significant expenses and increasing operating losses in connection with ongoing research and development activities related to our portfolio of programs as we continue development of our product candidates, IMM-ONC-01 and IMM-BCP-01, respectively. We also plan to perform research activities as we seek to discover and develop additional product candidates; carry out maintenance, expansion, enforcement, defense, and protection of our intellectual property portfolio; and hire research and development, clinical and administrative personnel. If we cannot obtain the necessary funding on favorable terms, if at all, we will need to delay, scale back or eliminate some or all of our research and development programs. We may also need to consider other various strategic alternatives, including a merger or sale of the Company; or reduce or cease operations. If we engage in collaborations, we may receive lower consideration upon commercialization of such products or technologies than if we had not entered into such arrangements or if we entered into such arrangements at later stages in the research and development process. We currently have no sources of revenue, and our ability to continue to fund our future business plans is dependent on our ability to raise capital to fund our present and future business plans. Additionally, volatility in the capital markets, the competitive landscape and general economic conditions in the United States may be a significant obstacle to raising the required funds.

We expect to continue to incur significant expenses and increasing operating losses in connection with ongoing development activities, particularly if and as we:

● continue research and development activities, including pre-clinical and clinical development;

● pursue regulatory approvals and implement other regulatory strategies for our current and future product candidates;

● take additional steps to advance our discovery engine and our existing and future pipeline;

● obtain, maintain, expand and protect our intellectual property portfolio;

● hire additional research and development, clinical and administrative personnel;

● scale up and expand our clinical and regulatory capabilities; and

● add operational, financial and management information systems and infrastructure to support our research and development programs, and any future commercialization efforts.

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As a result of these anticipated expenditures and potential unanticipated expenditures, we will need substantial additional financing to support our continuing operations and pursue our growth strategy. Until such time as we generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of any stockholder will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all. The inability to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

Through September 30, 2022, we raised an aggregate of $125.1 million in gross proceeds from sales of our common stock, Series A convertible preferred stock and warrants, warrant and stock option exercises, the issuance of convertible promissory notes, and the PPP loan. On October 1, 2021, we entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell shares of common stock under our existing shelf registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent. The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement.

We expect that our cash as of September 30, 2022 will be sufficient to fund our operations at least 12 months from the filing date of this Quarterly Report on Form 10-Q, including our planned development activities for IMM-BCP-01 and IMM-ONC-01. We have based these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner than we currently expect. See “— Liquidity and capital resources.” Due to the numerous risks and uncertainties associated with the research and development of our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.

Our lead discovery programs

SARS-CoV-2 (“IMM-BCP-01”)

We are actively developing an antibody cocktail derived from the B cells of COVID-19 patients who exhibited high neutralizing titers. IMM-BCP-01 targets non-overlapping regions of the Spike protein of SARS-CoV-2 which include highly conserved, subdominant epitopes. The cocktail promotes both ACE2 and non-ACE2 dependent neutralization and induces natural viral clearance mechanisms such as antibody dependent cellular cytotoxicity, complement activation and phagocytosis in pre-clinical testing. If successful in clinical testing, we expect that our antibody cocktail product candidate could be used both as a treatment for individuals who have contracted SARS-CoV-2 and as a prophylactic to offer protection against the virus for individuals who are at risk of contracting SARS-CoV-2. We are conducting this program in collaboration with the DoD. The IMM-BCP-01 program is broadly focused on the emerging variants of SARS-CoV-2. IMM-BCP-01 retains neutralization activity, in preclinical testing, against the Omicron variant and its dominant sub-lineages, including the BA.4/.5 variants which account for the majority of current cases. We submitted an IND application for the IMM-BCP-01 program to the U.S. FDA in November 2021 and initiated the Phase 1b study of IMM-BCP-01 in patients infected with SARS-CoV-2 in June 2022. We expect to obtain topline safety and PK data by the end of the year and announce those results in the beginning of 2023.

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Oncology (“IMM-ONC-01”)

Our lead oncology program is focused on IL-38, which we believe is a novel, negative regulator of inflammation capable of promoting tumor evasion of the immune system. IL-38 was identified as the target of an antibody isolated from a hybridoma library generated from the memory B cells of a patient with squamous head and neck cancer. Query of public and proprietary (Tempus) databases of cancer gene expression revealed over-expression of IL-38 in multiple solid tumors. Further, a correlation with low levels of tumor-infiltrating immune effector cells, a hallmark of immune suppression in some of these patients’ tumors, and high IL-38 expression was also observed, suggesting a role for IL-38 as an immune checkpoint. Data obtained from preclinical testing indicated that blocking IL-38 function using inhibitory antibodies increased the immune response to the tumor and resulted in anti-tumor activity in select animal models, suggesting that anti-IL-38 antibodies could have therapeutic utility as single agents or in combination with other therapeutic modalities. Our recent analysis further confirms IL-38 expression is frequently elevated in samples of select patient tumor subtypes, in cancers such as head and neck, lung and gastroesophageal. We believe that this information could potentially guide patient selection for early clinical testing and may improve overall probability of demonstrating clinical utility, thereby improving the probability of clinical success. We plan to submit our IND application for the IMM-ONC-01 program by mid-2023.

Other programs and platform

In addition to the already described lead discovery programs, we will continue to invest in our proprietary discovery engine to expand our pipeline. The high output of antibody-target pairs resulting from our discovery engine may provide us with additional insights into the immune response against cancer and infectious diseases. We intend to continue to invest in this platform, to evaluate novel antibody-target pairs and to develop a pipeline of antibody therapeutics as single agents or in combination with other therapeutics or technologies to yield product candidates, such as Antibody-Drug Conjugates (“ADCs”). We believe our discovery engine has the ability to generate one to two development candidates per year.

We also intend to continue to explore additional strategic partnerships and collaborations to expand our opportunities and capabilities. We intend to continue to form strategic partnerships with government agencies and with other third parties to accelerate our research and development efforts, as exemplified by our other transaction authority for prototype agreement with the DoD related to COVID-19. The insights we obtain may also enable strategic partnerships with other entities, including pharmaceutical and biotechnology companies. We also intend to continue collaborating with various vendors, manufacturers, and other service providers to complement the capabilities needed to continue to develop and commercialize our products.

Additionally, we plan to expand our intellectual property estate and infrastructure needed to discover and advance our platform and product candidates. We may in-license or acquire complementary intellectual property as needed or required, and we may continue to build our know-how and trade secrets. We may pursue both therapeutic and diagnostic applications of our antibodies through composition of matter and/or method of use patents. While our initial focus areas are in oncology and infectious disease, we may invest in intellectual property in other therapeutic areas as well.

COVID-19 pandemic

The ongoing COVID-19 pandemic is evolving, and to date has led to the implementation of various responses from time to time, including government-imposed quarantines, travel restrictions, and other public health safety measures. We have and will continue to closely monitor the spread of COVID-19 and its variants, and plan to continue taking proactive measures to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the ongoing COVID-19 pandemic. We expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of the health and safety of our employees and other personnel in light of COVID-19 and variants thereof. The extent to which COVID-19 ultimately impacts our business, results of operations or financial condition will depend on future developments, which, despite progress in vaccination efforts, remain highly uncertain and cannot be predicted with confidence, such as the duration of the COVID-19 pandemic, new strains of the virus, including any future variants that may emerge, which may impact rates of infection and vaccination efforts, developments or perceptions regarding the

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safety of vaccines, new information that may emerge concerning the severity of COVID-19, the direct and indirect economic effects of the pandemic and containment measures, including increases in inflation, supply chain disruption, labor shortage and shifting demand, and any additional preventative and protective actions taken to contain the pandemic or treat its impact, among others. The estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19 and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets. See “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 28, 2022 and elsewhere in our filings with the SEC for a discussion of the potential adverse impact of COVID-19 on our business, results of operations and financial condition.

Components of our results of operations

Research and development expenses

Research and development expenses consist of costs incurred in performing research and development activities, which include:

● personnel-related expenses, including salaries, bonuses, benefits and share-based compensation for employees engaged in research and development functions;

● expenses incurred in connection with the advancement of our programs, including under agreements with consultants, contractors, contract research organizations and other third-party vendors and suppliers;

● expenses to conduct clinical trials including regulatory and quality assurance;

● the cost of developing and validating our manufacturing process for use in our preclinical studies and clinical trials;

● laboratory supplies and research materials and other infrastructure-related expenses; and

● facilities, depreciation and amortization and other expenses which include direct and allocated expenses.

We expense research and development costs as incurred. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the benefits are consumed.

Research and development activities are central to our business model. We expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities.

In July 2020, we entered into the OTA Agreement with the DoD to fund the development of IMM-BCP-01 to treat COVID-19. The OTA Agreement was modified in May 2021 to increase such funding. In connection with the OTA Agreement, we record expense reimbursements received from the DoD as contra-research and development expenses in the same period the underlying expenses are incurred.

Under the provisions of the CARES Act signed into law on March 27, 2020 and the subsequent extension of the CARES Act, the Company was deemed eligible to receive the employee retention credit subject to certain criteria. The Company recognized the employee retention credit as contra-expense to personnel related costs in research and development expenses in the condensed statements of operations.

General and administrative expenses

General and administrative expenses consist primarily of salaries and other related costs, including share-based compensation for personnel in our executive, business development, and administrative functions. General and

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administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, direct and allocated facility related expenses and other operating costs.

We anticipate that our general and administrative expenses will increase in the future to support increased and progressed research and development activities.

Under the provisions of the CARES Act signed into law on March 27, 2020 and the subsequent extension of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company recognized the employee retention credit as contra-expense to personnel related costs in general and administrative expenses in the condensed statements of operations.

Interest income (expense), net

Interest income (expense), net consists of interest expense related to loans payable, offset by interest income earned on our cash.

Results of operations

The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our results of operations will depend on future developments, which are highly uncertain, including new information that may emerge concerning the severity of COVID-19 and its variants or other public health crisis and actions taken to contain or prevent the further spread, among others. Accordingly, we cannot fully predict the extent to which our business and results of operations will be affected by the pandemic.

Comparison of the three and nine months ended September 30, 2022 and 2021

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Operating expenses:	(in thousands)						(in thousands)
Research and development	$	5,225	$	4,513	$	712	$	19,020	$	9,725	$	9,295
General and administrative		3,309		3,210		99		10,094		7,635		2,459
Total operating expenses		8,534		7,723		811		29,114		17,360		11,754
Loss from operations		(8,534)		(7,723)		(811)		(29,114)		(17,360)		(11,754)
Other income		—		6		(6)		—		506		(506)
Interest income (expense), net		1		(3)		4		4		(5)		9
Net loss	$	(8,533)	$	(7,720)	$	(813)	$	(29,110)	$	(16,859)	$	(12,251)

Three months ended September 30, 2022 and 2021

Research and development expenses

Research and development expenses were $5.2 million and $4.5 million, net of DoD reimbursement for the three months ended September 30, 2022 and 2021, respectively.

Research and development expenses increased by $0.7 million for the three months ended September 30, 2022. This increase is primarily due to a $5.3 million reduction of contra-research and development expense as a result of a reduction in BCP-01 program spending and reimbursable related expenses under the DoD agreement during the three months ended September 30, 2022. Contra-research and development expenses offsets the expenses recognized in the period for the DoD agreement. Personnel-related costs increased by $0.2 million due to an increase in headcount and stock-based compensation offset by a $4.7 million decrease in outsourced research and materials and a $0.1 million decrease in facility related costs.

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Research and development expenses are expected to increase in the future as we continue our current research programs, initiate new research programs, continue our preclinical development of product candidates and conduct current and future clinical trials for our programs and product candidates.

General and administrative expenses

General and administrative expenses increased by $0.1 million to $3.3 million for the three months ended September 30, 2022 from $3.2 million for the three months ended September 30, 2021. The increase was primarily a result of a $0.3 million increase in personnel-related costs due to an increase in headcount and stock-based compensation offset by a $0.2 million decrease in professional fees, general fees and facility related costs.

Interest income (expense), net

Interest expense consists of interest related to equipment loan payables. Interest income consists of interest earned on our cash balances held with financial institutions.

Nine months ended September 30, 2022 and 2021

Research and development expenses

Research and development expenses were $19.0 million and $9.7 million, net of DoD reimbursement for the nine months ended September 30, 2022 and 2021, respectively.

Research and development expenses increased by $9.3 million for the nine months ended September 30, 2022. This increase is primarily due to a $12.7 million reduction of contra-research and development expense as a result of a reduction in BCP-01 program spending and reimbursable related expenses under the DoD agreement during the nine months ended September 30, 2022. Contra-research and development expenses offsets the expenses recognized in the period for the DoD agreement. Personnel-related costs increased by $1.4 million due to an increase in headcount and stock-based compensation. These increases in personnel-related costs were offset by $0.6 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit. In addition, outsourced research and raw materials decreased by $3.9 million and facility related costs decreased by $0.3 million.

Research and development expenses are expected to increase in the future as we continue our current research programs, initiate new research programs, continue our preclinical development of product candidates and conduct current and future clinical trials for our programs and product candidates.

General and administrative expenses

General and administrative expenses increased by $2.5 million to $10.1 million for the nine months ended September 30, 2022 from $7.6 million for the nine months ended September 30, 2021. The increase was primarily a result of a $2.5 million increase in personnel-related costs due to an increase in headcount and stock-based compensation offset by $0.2 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit. In addition, professional fees and other general expenses increased by $0.2 million for the nine months ended September 30, 2022.

Interest income (expense), net

Interest expense consists of interest related to loan payables. Interest income consists of interest earned on our cash balances held with financial institutions.

Other income

Other income for the nine months ended September 30, 2021 consists of forgiveness of the PPP Loan.

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Liquidity and capital resources

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as continue our preclinical development of product candidates and conduct current and future clinical trials for our product candidates. Through September 30, 2022, we raised an aggregate of $125.1 million in gross proceeds from sales of our common stock, Series A convertible preferred stock and warrants, warrant and stock option exercises, the issuance of convertible promissory notes, and the PPP loan that was forgiven in May 2021. As of September 30, 2022, we had $27.1 million in cash and cash equivalents. On October 1, 2021, we entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell common shares under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent. We filed a shelf registration statement on Form S-3, which was declared effective by the SEC on October 14, 2021, pursuant to which we may issue from time-to-time securities with an aggregate value of up to $200.0 million. The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement.

We will need to raise additional capital before we exhaust our current cash to continue to fund our research and development, including our plans for clinical and preclinical trials and new product development, as well as to fund operations. As and if necessary, we will seek to raise additional funds through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.

Cash flows

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2022 and 2021:

	Nine Months Ended September 30,
	2022		2021
	(in thousands)
Cash used in operating activities	$	(22,007)	$	(11,421)
Cash used in investing activities		(176)		(65)
Cash provided by financing activities		32		27,963
Net (decrease) increase in cash and cash equivalents and restricted cash	$	(22,151)	$	16,477

Operating activities

Net cash used in operating activities for the nine months ended September 30, 2022 was $22.0 million, consisting primarily of our net loss of $29.1 million and net decreases of accrued expenses and other liabilities and accounts payable of $2.4 million, offset by net noncash charges of $4.3 million for stock compensation expense, depreciation and amortization of right-of-use asset and decreases in prepaid expenses and other assets of $5.2 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was $11.4 million, consisting primarily of our net loss of $16.9 million, increases in prepaid expenses and other assets of $1.8 million, and forgiveness of PPP Loan of $0.5 million, offset by noncash charges of $2.9 million for stock compensation expense, depreciation and amortization, and increases in accrued expenses and other liabilities of $2.8 million and accounts payable of $2.1 million.

Investing activities

During the nine months ended September 30, 2022 and 2021, we used $0.2 million and $0.1 million, respectively, for the purchase of property and equipment.

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Financing activities

During the nine months ended September 30, 2022, financing activities provided $32,000 from exercise of stock options.

During the nine months ended September 30, 2021, financing activities provided $28.0 million of proceeds from the sale of common stock and common stock warrants, the exercise of common stock warrants and stock options, offset by the payment of issuance costs, and for payments related to our equipment loan.

Funding requirements

Our operating expenses are expected to increase substantially as we continue to advance our discovery engine and programs.

Specifically, our expenses will increase if and as we:

● further develop our discovery engine;

● continue our research and development programs for our current and any future product candidates from our current programs;

● seek to identify additional research programs and additional product candidates;

● continue non-clinical testing and clinical testing for our product candidates;

● maintain, expand, enforce, defend, and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio;

● seek marketing approvals for any of our product candidates that successfully complete clinical trials;

● establish a sales, marketing, and distribution infrastructure to commercialize any medicines for which we may obtain marketing approval;

● hire additional personnel including research and development, clinical and administrative personnel;

● add operational, financial, and management information systems and personnel, including personnel to support our product development;

● acquire or in-license products, intellectual property, and technologies; and

● continue to operate as a public company.

We expect that our existing cash at September 30, 2022 will enable us to fund our current and planned operating expenses and capital expenditures at least 12 months from the filing date of this Quarterly Report on Form 10-Q. The Company will need additional financing to support its continuing operations and pursue its research and development strategy. We have based these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.

Our future funding requirements will depend on many factors including:

● the costs of continuing to develop our discovery engine;

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● the costs of acquiring licenses, should we choose to do so, for the expansion of product development;

● the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, manufacturing and clinical trials for current and future product candidates;

● the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims and the success of our intellectual property portfolio;

● the costs, timing, and outcome of regulatory review of the product candidates we may develop;

● the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any product candidates for which we receive regulatory approval;

● the success of our license agreements and our collaborations;

● our ability to establish and maintain additional collaborations on favorable terms, if at all;

● the achievement of milestones or occurrence of other developments that trigger payments under any additional collaboration agreements we obtain;

● the extent to which we acquire or in-license products, intellectual property, and technologies; and

● the costs of operating as a public company.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of any purchaser will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our research and development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Critical accounting policies and use of estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our

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estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our audited financial statements appearing in our Annual Report filed on Form 10-K with the SEC on March 28, 2022, we believe that the following accounting policies are the most critical to the judgments and estimates used in the preparation of our financial statements.

Share-based compensation

We recognize the grant-date fair value of share-based awards issued as compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period of the award. The fair value of stock options is estimated at the time of grant using the Black-Scholes option pricing model, which requires the use of inputs and assumptions such as the fair value of the underlying common stock, exercise price of the option, expected term, risk-free interest rate, expected volatility and dividend yield.

The inputs and assumptions used to estimate the fair value of share-based payment awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different inputs and assumptions, our share-based compensation expense could be materially different for future awards.

Expected volatility is a subjective assumption that is estimated. The expected volatility was based on the historical stock volatility of several of our comparable publicly traded companies over a period of time equal to the expected term of the options, as we do not have sufficient trading history to use the volatility of our own common stock.

Accrued research and development expenses

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 and communicating with personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us on a pre-determined schedule or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments, if necessary. 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 reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Recently adopted accounting standards

On January 1, 2022, the Company adopted Accounting Standards Update No. 2016-02, Leases (“Topic 842”) (“ASU 2016-02”), which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840. The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the condensed balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements. The Company adopted ASC 842 using the modified retrospective approach. The Company elected the package of practical expedients available for existing contracts, which allowed the Company to carry forward our historical assessments of lease identification, lease classification, and initial direct costs. The Company also elected a policy to not apply the recognition requirements of ASC 842 for short-term leases with a term of 12 months of less.

As of January 1, 2022, the effective date, the Company identified one operating lease arrangement relating to the Company’s headquarter facility and a short-term lease relating to laboratory equipment. The adoption of ASC 842

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resulted in a recognition of an ROU asset and lease liability of $0.2 million on the Company’s condensed balance sheet relating to the leases as of January 1, 2022. The adoption of the standard did not have a material effect on the Company’s condensed statements of operations and condensed statements of cash flows.

Recently issued accounting pronouncements

In November 2021, the FASB issued ASU Topic 832, Disclosures by Business Entities about Government Assistance (“Topic 832”). This standard requires annual disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect of the transactions on an entity’s financial statements. The effective date of Topic 832 is for financial statements issued for annual periods beginning after December 15, 2021. The Company is currently evaluating the effect Topic 832 will have on its financial statements and related disclosures.

JOBS Act

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies, including reduced disclosure about our executive compensation arrangements, exemption from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We may take advantage of these exemptions until the last day of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company earlier if we have more than $1.07 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period. For so long as we remain an emerging growth company, we are permitted, and intend, to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. We may choose to take advantage of some, but not all, of the available exemptions. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Therefore, the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information under this item is not required to be provided by smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer

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have concluded that, as of September 30, 2022, our disclosure controls and procedures were effective to ensure the timely disclosure of required information in our SEC filings.

Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.

Item 1A. Risk Factors

The information under this item is not required to be provided by smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
3.1	Amended and Restated Certificate of Incorporation of Immunome, Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed October 6, 2020).
3.2	Amended and Restated Bylaws of Immunome, Inc. (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed October 6, 2020).
10.1	Letters to Holders of Series B Warrants to Purchase Shares of Common Stock (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8K filed September 2, 2022).
31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File (Form 10-Q for the Quarterly Period ended September 30, 2022 filed in XBRL). The financial information contained in the XBRL-related documents is "unaudited" and "unreviewed." The instance document does not appear in the interactive file because its XBRL tags are embedded within the Inline XBRL document.
104	Cover Page Interactive File (embedded within the Inline XBRL document).

* Filed or furnished herewith.

# Management contracts or compensatory plans or arrangements

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IMMUNOME, INC.
	(Registrant)
Date: November 14, 2022	By:	/s/ Purnanand D. Sarma
	Name:	Purnanand D. Sarma, Ph. D.
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)
Date: November 14, 2022	By:	/s/ Corleen M. Roche
	Name:	Corleen M. Roche
	Title:	Chief Financial Officer
		(Principal Financial Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Purnanand D. Sarma, Ph.D., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2022 of Immunome, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

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Date: November 14, 2022	By:	/s/ Purnanand D. Sarma
	Name:	Purnanand D. Sarma, Ph.D.
	Title:	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Corleen Roche, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2022 of Immunome, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2022	By:	/s/ Corleen Roche
	Name:	Corleen Roche
	Title:	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Immunome, Inc. (the “Company”) for the fiscal quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2022	By:	/s/ Purnanand D. Sarma
	Name:	Purnanand D. Sarma, Ph.D.
	Title:	President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Immunome, Inc. (the “Company”) for the fiscal quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2022	By:	/s/ Corleen Roche
	Name:	Corleen Roche
	Title:	Chief Financial Officer (Principal Financial Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 10, 2022
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-39580
Entity Registrant Name	Immunome, Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0694340
Entity Address, Address Line One	665 Stockton Drive
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Exton
Entity Address State Or Province	PA
Entity Address, Postal Zip Code	19341
City Area Code	610
Local Phone Number	321-3700
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	IMNM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,128,843
Entity Central Index Key	0001472012
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 27,078	$ 49,229
Prepaid expenses and other current assets	2,161	7,409
Total current assets	29,239	56,638
Property and equipment, net	704	855
Operating right-of-use asset, net	171
Restricted cash	100	100
Deferred offering costs	332	332
Total assets	30,546	57,925
Current liabilities:
Accounts payable	3,139	3,077
Accrued expenses and other current liabilities	4,230	6,651
Total current liabilities	7,369	9,728
Other long-term liabilities	93	12
Total liabilities	7,462	9,740
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2022 and December 31, 2021, respectively
Common stock, $0.0001 par value; 200,000,000 shares authorized; 12,127,594 and 12,110,373 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	1	1
Additional paid-in capital	131,298	127,289
Accumulated deficit	(108,215)	(79,105)
Total stockholders' equity	23,084	48,185
Total liabilities and stockholders' equity	$ 30,546	$ 57,925

XML

Condensed Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Condensed Balance Sheets
Preferred stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	12,127,594	12,110,373
Common stock, shares outstanding (in shares)	12,127,594	12,110,373

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Condensed Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Operating expenses:
Research and development	$ 5,225	$ 4,513	$ 19,020	$ 9,725
General and administrative	3,309	3,210	10,094	7,635
Total operating expenses	8,534	7,723	29,114	17,360
Loss from operations	(8,534)	(7,723)	(29,114)	(17,360)
Other income (expenses):
Other income		6		506
Interest income (expense), net	1	(3)	4	(5)
Net loss	(8,533)	(7,720)	(29,110)	(16,859)
Deemed dividend arising from warrant modification	(622)		(622)
Net loss attributable to common stockholders	$ (9,155)	$ (7,720)	$ (29,732)	$ (16,859)
Per share information:
Net loss per share of common stock, Basic	$ (0.75)	$ (0.65)	$ (2.45)	$ (1.49)
Net loss per share of common stock, Diluted	$ (0.75)	$ (0.65)	$ (2.45)	$ (1.49)
Weighted-average common shares outstanding, Basic	12,127,501	11,934,491	12,125,947	11,348,856
Weighted-average common shares outstanding, Diluted	12,127,501	11,934,491	12,125,947	11,348,856

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Condensed Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common stock.	Additional paid-in capital	Accumulated deficit	Total
Balance at Dec. 31, 2020	$ 1	$ 95,738	$ (54,394)	$ 41,345
Balance (shares) at Dec. 31, 2020	10,634,245
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Sale of common stock and common stock warrants		26,666		26,666
Sale of common stock and common stock warrants, shares	1,014,115
Share-based compensation expense		2,229		2,229
Exercise of common stock warrants		1,338		1,338
Exercise of common stock warrants (shares)	193,975
Exercise of stock options		74		74
Exercise of stock options (shares)	250,998
Net loss			(16,859)	(16,859)
Balance at Sep. 30, 2021	$ 1	126,045	(71,253)	54,793
Balance (shares) at Sep. 30, 2021	12,093,333
Balance at Jun. 30, 2021	$ 1	124,149	(63,533)	60,617
Balance (shares) at Jun. 30, 2021	11,812,792
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Sale of common stock and common stock warrants		262		262
Sale of common stock and common stock warrants, shares	14,115
Share-based compensation expense		1,155		1,155
Exercise of common stock warrants		432		432
Exercise of common stock warrants (shares)	47,958
Exercise of stock options		47		47
Exercise of stock options (shares)	218,468
Net loss			(7,720)	(7,720)
Balance at Sep. 30, 2021	$ 1	126,045	(71,253)	54,793
Balance (shares) at Sep. 30, 2021	12,093,333
Balance at Dec. 31, 2021	$ 1	127,289	(79,105)	48,185
Balance (shares) at Dec. 31, 2021	12,110,373
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		3,977		3,977
Exercise of stock options		32		$ 32
Exercise of stock options (shares)	17,221			17,221
Net loss			(29,110)	$ (29,110)
Balance at Sep. 30, 2022	$ 1	131,298	(108,215)	23,084
Balance (shares) at Sep. 30, 2022	12,127,594
Balance at Jun. 30, 2022	$ 1	129,958	(99,682)	30,277
Balance (shares) at Jun. 30, 2022	12,127,385
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense		1,340		1,340
Exercise of stock options (shares)	209
Net loss			(8,533)	(8,533)
Balance at Sep. 30, 2022	$ 1	$ 131,298	$ (108,215)	$ 23,084
Balance (shares) at Sep. 30, 2022	12,127,594

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Condensed Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Condensed Statements of Changes in Stockholders' Equity
Common stock and common stock warrants offering costs	$ 559

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Condensed Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (29,110)	$ (16,859)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	327	637
Amortization of right-of-use asset	44
Share-based compensation	3,977	2,229
Deferred rent		(8)
Forgiveness of PPP Loan		(500)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	5,236	(1,819)
Accounts payable	62	2,088
Accrued expenses and other current liabilities	(2,471)	2,811
Other long-term liabilities	(72)
Net cash used in operating activities	(22,007)	(11,421)
Cash flows from investing activities:
Purchases of property and equipment	(176)	(65)
Net cash used in investing activities	(176)	(65)
Cash flows from financing activities:
Proceeds from sale of common stock and common stock warrants		27,225
Payment from issuance costs related to the sale of common stock and common stock warrants		(559)
Proceeds from exercise of stock options	32	74
Proceeds from exercise of common stock warrants		1,338
Payment of offering costs		(18)
Payment of equipment loan payable		(97)
Net cash provided by financing activities	32	27,963
Net (decrease) increase in cash and cash equivalents and restricted cash	(22,151)	16,477
Cash and cash equivalents and restricted cash at beginning of period	49,329	39,866
Cash and cash equivalents and restricted cash at end of period	27,178	56,343
Supplemental disclosures of cash flow information:
Operating lease right-of-use asset and lease liability recorded upon adoption of ASC 842	$ 215
Offering costs included in accrued expenses and other current liabilities		289
Purchases of property and equipment included in accounts payable		$ 2

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Nature of the business

9 Months Ended

Sep. 30, 2022

Nature of the business

Nature of the business

1. Nature of the business

Organization

Immunome, Inc. (“the Company” or “Immunome”) is a clinical stage biopharmaceutical company. The Company was incorporated as a Pennsylvania corporation on March 2, 2006 and was converted to a Delaware corporation on December 2, 2015. The Company is utilizing a proprietary human memory B cell platform to discover and develop first-in-class antibody therapeutics designed to change the way diseases are currently being treated. The Company’s primary focus areas are oncology and infectious disease, including COVID-19.

Since its inception, the Company has devoted substantially all its resources to research and development, raising capital, building its management team and extending its intellectual property portfolio. 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, uncertain results of preclinical and clinical testing, development of new technological innovations and products by competitors, dependence on key personnel and third-party vendors, protection of proprietary technology, compliance with government regulations, regulatory approval of product candidates and the ability to secure additional capital to fund operations.

Liquidity

The Company has incurred net losses since inception, including net losses of $29.1 million and $16.9 million for the nine months ended September 30, 2022 and 2021, respectively, and it expects to generate losses from operations and negative operating cash flows for the foreseeable future primarily due to research and development costs for its potential product candidates. As of September 30, 2022, the Company had an accumulated deficit of $108.2 million.

On October 1, 2021, the Company entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of common stock under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent. The Company filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (“SEC”) on October 14, 2021, pursuant to which the Company may issue from time-to-time securities with an aggregate value of up to $200.0 million. The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement.

The Company had cash and cash equivalents of $27.1 million at September 30, 2022. The Company expects that its cash will enable it to fund its operating expenses and capital expenditure requirements for at least 12 months from the filing date of this Quarterly Report on Form 10-Q; however; more funding will be necessary beyond this point to fund additional research and development, clinical development and operations in order to pursue the Company’s growth strategy. 

If the Company cannot obtain the necessary funding, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties relative to potential programs, products or technologies that it might otherwise seek to progress independently (or enter into these collaborations sooner than it might otherwise have intended to); consider various other strategic alternatives, including a possible merger or sale of the Company; or reduce or cease operations. If the Company engages in collaborations under these circumstances, it may receive lower consideration than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the research and development process. Additionally, volatility in the capital markets generally and the biotechnology sector specifically, as well as general economic conditions in the United States may be a significant obstacle to raising the required funds on satisfactory terms, if at all.

Operations of the Company are subject to certain risks and uncertainties including various internal and external factors that will affect whether and when the Company’s programs and product candidates become approved drugs and how significant their market share will be, many of which are outside of the Company’s control. The length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The Company is also subject to risks and uncertainties as a result of the ongoing COVID-19 pandemic. Although there is uncertainty as to the extent of the continued impact of the COVID-19 pandemic, including the continued impact to capital markets and economies worldwide in the form of economic slowdowns or recession, there has not been a significant impact to the Company’s operations or financial statements to date.

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2022

Summary of significant accounting policies

Summary of significant accounting policies

2. Summary of significant accounting policies

Basis of presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

Unaudited interim results

These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 28, 2022. The accompanying condensed financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 are unaudited but have been prepared on the same basis as the annual audited financial statements and include all adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Condensed balance sheet amounts as of December 31, 2021 have been derived from the audited financial statements as of that date.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the expected volatility used to estimate fair value of stock options and accrued research and development expenses. Estimates and assumptions are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from these estimates.

Segment and geographic information

Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker (the “CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer. The Company views its operations as, and manages its business in, one operating segment operating exclusively in the United States of America.

Fair value of financial instruments

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset

or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following:

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

Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.

Level 3 — Unobservable inputs for the asset or liability (i.e.; supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Cash and cash equivalents and restricted cash are Level 1 assets as of September 30, 2022 and December 31, 2021.

Restricted cash

Restricted cash represents collateral provided for a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate facilities. Cash will be released from restriction upon termination of the lease. Restricted cash was $100,000 at both September 30, 2022 and 2021, respectively. The following table provides a reconciliation of the components of cash and cash equivalents and restricted cash presented in the condensed statements of cash flows:

(in thousands)	September 30, 2022		September 30, 2021
Cash and cash equivalents	$	27,078	$	56,243
Restricted cash		100		100
	$	27,178	$	56,343

Equity issuance costs

The Company capitalized costs that were directly associated with establishing the ATM Agreement and shelf registration statement in 2021. These costs will remain capitalized until such financings are consummated, at which time such costs will be recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. Ongoing costs that are directly associated with the ATM Agreement are expensed as incurred.

Deferred offering costs were $0.3 million as of each of September 30, 2022 and December 31, 2021, respectively, on the condensed balance sheet.

Government assistance programs

The Company accounts for amounts received under its U.S. Department of Defense (“DoD”) expense reimbursement contract as contra-research and development expenses in the condensed statements of operations. The Company accounts for the employee retention credit received under the U.S. Department of Treasury Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) as contra-expense to personnel related costs within research and development and general and administrative expenses in the condensed statements of operations.

Research and development costs

Research and development costs are charged to expense as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, share-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, preclinical and clinical development expenses, including manufacture and testing of clinical supplies, consulting and other contracted services. Additionally, under the terms of the license agreements described in Note 7, the Company is obligated to make future payments should certain development and regulatory milestones be achieved. Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the timing of receipt of invoices and payment of invoices and are reflected in the financial statements as a prepaid or accrued expense.

Share-based compensation

The Company’s share-based compensation program allows for grants of stock options and restricted stock awards. Grants are awarded to employees and non-employees, including directors.

The Company accounts for its share-based compensation awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognized compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognized compensation expense on a straight-line basis over the service period. The Company classified share-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

The Company estimates the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of Company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and biopharmaceutical industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The exercise price is the fair value of the common stock as of the measurement date.

Net loss per share

Basic net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share of common stock is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share of common stock is computed by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents.

The following potentially dilutive securities outstanding as of September 30, 2022 and 2021 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2022	2021
Stock options(1)	2,509,759	1,936,546
Common stock warrants(1)	1,303,112	1,314,223
	3,812,871	3,250,769

(1) Represents common stock equivalents.

In periods in which the Company reports a net loss per share of common stock, diluted net loss per share of common stock is the same as basic net loss per share of common stock since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss per share of common stock for the three and nine months ended September 30, 2022 and 2021.

Leases

Effective January 1, 2022, the Company adopted ASU No. 2016-02, Leases (“ASC 842”) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date. The results for reporting periods beginning after January 1, 2022 are presented in accordance with ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards that were in effect prior to January 1, 2022.

At the inception of an arrangement, the Company determines whether an arrangement contains a lease based on facts and circumstances present in the arrangement. An arrangement is or contains a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Typically, lessees are required to recognize leases with a term greater than one year on the balance sheet as an operating or finance lease liability and right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company has elected the practical expedient to not recognize leases with a term of 12 months or less. The Company does not have any financing leases as of September 30, 2022.

Operating lease liabilities and their corresponding right-of-use assets are recorded based on their present value of lease payments over the remaining lease term. Options to extend the lease term are included in the Company’s assessment of the lease term only if there is a reasonable assessment that the Company will renew. Leases are discounted to its present value using either the interest rate implicit in the Company’s lease or its incremental borrowing rate, which reflects the fixed rate in which the Company could borrow on a collateralized basis the amount of lease payments in the same currency, for a similar term, in a similar economic environment.

Recently adopted accounting standards

On January 1, 2022, the Company adopted ASC 842, which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840. The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements. The Company adopted ASC 842 using the modified retrospective approach. The Company elected the package of practical expedients available for existing contracts, which allowed the Company to carry forward its historical assessments of lease identification, lease classification, and initial direct costs. The Company also elected a policy to not apply the recognition requirements of ASC 842 for short-term leases with a term of 12 months or less.

As of January 1, 2022, the effective date, the Company identified one operating lease arrangement relating to the Company’s headquarters facility and one short-term lease relating to laboratory equipment. The adoption of ASC 842 resulted in a recognition of an ROU asset and lease liability of $0.2 million on the Company’s condensed balance sheet

relating to the leases as of January 1, 2022. The adoption of the standard did not have a material effect on the Company’s condensed statements of operations and condensed statements of cash flows (Note 8).

Recently issued accounting pronouncements

In November 2021, the FASB issued ASU Topic 832, Disclosures by Business Entities about Government Assistance (“ASC 832”). This standard requires annual disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect of the transactions on an entity’s financial statements. The effective date of ASC 832 is for financial statements issued for annual periods beginning after December 15, 2021. The Company is currently evaluating the effect ASC 832 will have on its financial statements and related disclosures.

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Government assistance programs

9 Months Ended

Sep. 30, 2022

Government assistance programs

Government assistance programs

3. Government assistance programs

DoD expense reimbursement contract

In July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (as amended, the “OTA Agreement”) with the DoD to fund the Company’s efforts in developing an antibody cocktail therapeutic to treat COVID-19. The amount of funding originally made available to the Company under the OTA Agreement was $13.3 million. In May 2021, the Company and the DoD amended the OTA Agreement, pursuant to which the DoD award was increased from $13.3 million to $17.6 million. Under the OTA Agreement, the DoD is required to pay the Company, upon submission of proper invoices, within 30 calendar days of receipt of request for payment.

The Company recorded contra-research and development expense related to the OTA Agreement of $0.0 million and $5.3 million for the three months ended September 30, 2022 and 2021, respectively, and $0.6 million and $13.4 million for the nine months ended September 30, 2022 and 2021, respectively, in the condensed statements of operations. The Company had an expense reimbursement receivable balance of $0.2 million and $2.7 million due from the DoD in prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets.

Costs that have been reimbursed by the DoD but not yet expensed by the Company are recorded as a deferred research obligation liability for the period. The Company has a deferred research obligation liability of $0.0 million and $2.0 million as of September 30, 2022 and December 31, 2021, respectively. This amount is included in accrued expenses and other liabilities in the accompanying condensed balance sheets. DoD reimbursable services that have been performed but not yet billed are recorded as an unbilled receivable in prepaid expenses and other current assets in the accompanying condensed balance sheets. The Company had an unbilled receivable from the DoD of $0.0 and $1.6 million as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022, the Company has received $17.4 million in expense reimbursement from the DoD under the OTA Agreement.

CARES Act employee retention credit

Under the CARES Act, the Company met eligibility criteria for a $0.8 million refundable employee retention credit. The Company recorded contra-expense to personnel related costs within research and development expense and general and administrative expense of $0.0 for the three months ended September 30, 2022 and contra-expense to research and development expense of $0.6 million and general administrative expense of $0.2 million for the nine months ended September 30, 2022, respectively, in the condensed statements of operations. No such amounts were recognized for the three and nine months ended September 30, 2021. The Company had an employee retention credit receivable balance due from the U.S. Department of Treasury of $0.8 million and $0.0 in prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021, respectively, in the accompanying condensed balance sheets.

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Prepaid expenses and other assets

9 Months Ended

Sep. 30, 2022

Prepaid expenses and other assets

Prepaid expenses and other assets

4. Prepaid expenses and other assets

Prepaid expenses and other assets consisted of the following:

(in thousands)	September 30, 2022		December 31, 2021
CARES Act employee retention credit receivable	$	847	$	—
Research and development advance payments		530		586
Other prepaids and short-term deposits		324		492
Reimbursement receivable from DoD		243		2,674
Prepaid insurance		217		2,019
Unbilled reimbursement receivable from DoD		—		1,638
	$	2,161	$	7,409

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Accrued expenses and other liabilities

9 Months Ended

Sep. 30, 2022

Accrued expenses and other liabilities

Accrued expenses and other liabilities

5. Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following:

(in thousands)	September 30, 2022		December 31, 2021
Research and development	$	2,514	$	2,840
Compensation and related benefits		1,367		1,246
Professional fees		236		227
Short-term operating lease liability and other liabilities		91		317
Deferred research obligations		22		2,021
	$	4,230	$	6,651

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Long-term debt

9 Months Ended

Sep. 30, 2022

Long-term debt

Long-term debt

6. Long-term debt

On April 30, 2020, the Company entered into a loan agreement with Silicon Valley Bank as the lender (“Lender”) for a loan in an aggregate principal amount of $0.5 million (“PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act and implemented by the U.S. Small Business Administration (“SBA”). The Company used the proceeds of the PPP Loan for payroll and other qualifying expenses. The entire PPP Loan was forgiven on May 21, 2021 and recognized as other income in the condensed statements of operations.

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Commitments and contingencies

9 Months Ended

Sep. 30, 2022

Commitments and contingencies

Commitments and contingencies

7. Commitments and contingencies

Employment agreements

The Company entered into employment agreements (the “Employment Agreements”) with certain key personnel providing for compensation and severance in certain circumstances, as defined in the respective Employment Agreements. The Employment Agreements may be terminated by either the Company or the employees in accordance with the respective Employment Agreements (subject to the payment of severance upon certain terminations) and provide for annual pay adjustments and bonuses at the discretion of the Board of Directors.

Employee benefit plan

The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company assumes all administrative costs of the 401(k) Plan and makes matching contributions as defined in the 401(k) Plan document. The Company made matching contributions of $0.1 million to the 401(k) Plan for each of the three months ended September 30, 2022 and 2021, respectively, and $0.2 million and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively.

Legal proceedings

The Company is not a party to any material litigation and does not have contingency reserves established for any litigation liabilities. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.

License agreements

The Company entered into various license agreements to further discover, develop and commercialize certain technologies and treatments. The Company may need to pay developmental and regulatory milestone payments of up to approximately $2.6 million. In addition, the Company may need to pay royalty rates on net product sales, a portion of certain sublicense and collaboration payments, and certain commercial milestone payments of up to approximately $1.5 million, if any.

The Company recorded $0.0 million and $0.1 million in milestone payments during the three and nine months ended September 30, 2022, respectively, in research and development expenses in the condensed statements of operations. No such costs were recorded during the three and nine months ended September 30, 2021, respectively.

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Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

8. Leases

In May 2017, the Company entered into a 62-month office and laboratory space lease commencing on July 1, 2017 for approximately 11,000 square feet of space in Exton, Pennsylvania. The Company has an option to extend the lease for up to two additional five-year terms. In December 2021, the Company extended the lease for an additional eighteen-month term ending in March 2024.

Beginning July 2021, the Company leased laboratory equipment on a month-to-month basis. In April 2022, the Company terminated the agreement through exercising the option to purchase the leased laboratory equipment under the lease agreement.

Supplemental condensed balance sheet information related to leases as of September 30, 2022 was as follows (in thousands):

Operating leases:
Operating lease right-of-use assets	$	171
Operating lease liability	$	86
Operating lease liability, net of current portion		93
Total operating lease liability	$	179

Operating lease liability and operating lease liability, net of current portion is included in accrued expenses and other current liabilities and other long-term liabilities, respectively, in the accompanying condensed balance sheets.

Operating lease expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands):

Operating lease cost (in thousands)		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
General and administrative	$	40	$	57
Research and development		20		124
Total lease expense	$	60	$	181

Short term lease expense recorded as research and development expense in the condensed statements of operations for the three and nine months ended September 30, 2022 was $0.0 and $0.1 million, respectively.

Under ASC 840, lease expense was $0.1 million and $0.2 million for the three and nine months ended September 30, 2021, respectively.

Other information related to the operating lease where the Company is the lessee was as follows:

	Nine Months Ended September 30, 2022
Weighted-average remaining lease term (in years)	1.50
Weighted-average discount rate	9.0%

Supplemental cash flow information related to the operating lease was as follows (in thousands):

		Nine Months Ended September 30, 2022
Cash paid for operating lease liability	$	173

As of September 30, 2022, minimum rental commitments under the operating lease were as follows (in thousands):

Years ending December 31,	Amount
2022 (represents remaining three months in 2022)	$	61
2023		246
2024		63
Total lease payments		370
Less imputed interest		(191)
Present value of lease liability	$	179

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Common stock

9 Months Ended

Sep. 30, 2022

Common stock

Common stock

9. Common stock

Common stock

The holders of common stock are entitled to one vote for each share of common stock. Subject to the approval of the holders of a majority in interest of the Company’s stockholders entitled to vote thereon, the holders of common stock are entitled to receive dividends out of legally available funds. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of common stock are entitled to share ratably in the remaining assets of the Company available for distribution.

On August 4, 2021, the Company sold 14,115 shares of the Company’s common stock for $15.94 per share to a purchaser in accordance with the Stock Purchase Agreement.

On April 28, 2021, the Company sold 1,000,000 units, each unit comprising one share of the Company’s common stock and one Series B Warrant (each, a “Series B Warrant”) to purchase one-half of a share of common stock. The units were issued in a private placement at a price of $27.00 per unit for gross proceeds of $27.0 million. The Series B Warrants are equity-classified, exercisable at any time, have an exercise price of $45.00 per share and will terminate at three years from the date of issuance. The fair value of the warrants on the date of issuance was $6.0 million. The fair value of the warrants was estimated using a Black-Scholes Option Pricing Model. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants to purchase shares of common stock as of April 28, 2021 included (i) volatility of 82.7%, (ii) risk free interest rate of 0.35%, (iii) strike price of $45.00 per share, (iv) fair value of common stock of $28.70 per share, and (v) expected life of three years. As described below, in September 2022, the Series B Warrants were modified to reduce the strike price to $10.00 per share and to remove the Company’s call right.

Warrants to acquire shares of common stock

On September 2, 2022, the Company notified holders of the Company’s Series B Warrants (the “Holders”) of the Company’s agreement to permit Holders to exercise the Series B Warrants at an exercise price of $10.00 per share (reduced from the previous exercise price of $45.00 per share) at any time prior to the expiration date of the Series B Warrants. The Company recognized a deemed dividend of $0.6 million, which represents the incremental fair value of the outstanding warrants as a result of the modification. This deemed dividend is recorded in the Company's consolidated statement of operations as an increase to the net loss attributable to common stockholders for purposes of computing net loss per share, basic and diluted. The net impact to the condensed statements of changes in stockholders’ equity was zero because the warrants were equity classified before and after the modification.

At September 30, 2022, common stock warrants outstanding were as follows:

Warrants	Warrants Outstanding	Exercise Price per Share	Expiration Date
Series A	803,112	$ 9.00	June 2, 2023
Series B	500,000	$ 10.00	April 28, 2024
	1,303,112

During nine months ended September 30, 2022, no warrants were exercised. During the nine months ended September 30, 2021, 148,653 warrants exercisable for $9.00 per share were exercised, and the Company received proceeds of $1.3 million and 148,653 shares of the Company’s common stock were issued. Additionally, 72,320 warrants exercisable for $9.00 per share were exercised in cashless transactions during the nine months ended September 30, 2021 and 45,322 shares of the Company’s common stock were issued.

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Share-based compensation

9 Months Ended

Sep. 30, 2022

Share-based compensation

Share-based compensation

10. Share-based compensation

In July 2008, the Board of Directors adopted the 2008 Equity Incentive Plan (the “2008 Plan”) which provided for the grant of qualified incentive stock options and non-qualified stock options, restricted stock or other awards to the Company’s employees, officers, directors, advisors, and outside consultants for the issuance or purchase of shares of the Company’s common stock. The 2008 Plan was replaced in July 2018 with the 2018 Equity Incentive Plan (2018 Plan and collectively with the 2008 Plan, the “Prior Plans”). At the time that the 2008 Plan was terminated, there were 388,748 shares available for grant that were transferred to the 2018 Plan. On September 24, 2020, the 2018 Plan was terminated and replaced with the 2020 Equity Incentive Plan (the “2020 Plan”). Additionally, the number of shares of our common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s Board of Directors. As of September 30, 2022, there were 1,336,088 shares available for future issuance under the 2020 Plan.

The Company also adopted the 2020 Employee Stock Purchase Plan (“ESPP”) on September 18, 2020 which provides for the grant of purchase rights to purchase shares of the Company’s common stock to eligible employees, as defined by the ESPP. The maximum number of shares of common stock that may be issued under the ESPP will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1 of each calendar year for a period of up to ten years, commencing on the first January 1 following the year in which an IPO occurs and ending on, and including, January 1, 2030, in an amount equal to the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, and (ii) 1,000,000 shares of common stock. As of September 30, 2022, there were 352,446 shares available under the ESPP. No shares of common stock have been issued under the ESPP as of September 30, 2022.

The 2020 Plan and the ESPP are administered by the Board of Directors subject to the Board’s right to delegate to a committee. The exercise prices, vesting and other restrictions are determined at the discretion of the Board of Directors. Stock options awarded under the Prior Plans and the 2020 Plan generally expire 10 years after the grant date unless the Board of Directors sets a shorter term. Vesting periods for awards under the Prior Plans and the 2020 Plan are determined at the discretion of the Board of Directors. Stock options granted to employees, officers, members of the Board of Directors and consultants of the Company typically vest over one to four years. Certain options provide for accelerated vesting if there is a change in control, as defined in the Prior Plans and the 2020 Plan.

Share-based compensation expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	480	$	402	$	1,387	$	924
General and administrative		860		753		2,590		1,305
	$	1,340	$	1,155	$	3,977	$	2,229

Unrecognized compensation cost related to unvested options was $10.5 million as of September 30, 2022 and will be recognized over an estimated weighted average period of 3.1 years.

Stock options

The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:

	Nine Months Ended September 30,
	2022			2021
Expected volatility		85.6	%		83.1	%
Risk-free interest rate		2.7	%		1.0	%
Expected term (in years)		5.97			6.04
Expected dividend yield		—			—
Fair value of common stock	$	3.64		$	23.61

A summary of option activity under the Plans and 2020 Plan during the nine months ended September 30, 2022 is as follows:

				Weighted
		Weighted		average
		average		remaining
	Number of	exercise price		contractual
	shares	per share		term (years)
Outstanding at January 1, 2022	2,005,756	$	11.26	8.50
Granted	543,900		3.64	9.45
Forfeited	(22,042)		12.20	—
Expired	(634)		17.96	—
Exercised	(17,221)		1.85	7.34
Outstanding at September 30, 2022	2,509,759		9.66	8.12
Exercisable at September 30, 2022	1,111,573		8.41	7.41

The weighted-average grant date fair value per share of stock options granted during the nine months ended September 30, 2022 and 2021 was $2.65 and $17.77, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 was $0.1 million. The aggregate intrinsic value of stock options outstanding at September 30, 2022 is $3.4 million.

Restricted stock awards

During August 2021, the Company granted 13,500 fully vested restricted stock awards. The Company recorded stock-based compensation expense of $0.2 million for the three and nine months ended September 30, 2021 related to the restricted stock awards granted. No such transaction occurred for the three and nine months ended September 30, 2022.

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Related party transactions

9 Months Ended

Sep. 30, 2022

Related party transactions

Related party transactions

11. Related party transactions

In November 2015, the Company entered into a management services agreement (the “Broadband MSA”) with BCM Advisory Partners LLC and Broadband Capital Partners LLC (collectively “Broadband Capital”). Certain directors of the Company are principals of Broadband Capital. Under the Broadband MSA, the Company engages Broadband Capital as a consultant for advice in connection with senior management matters related to the Company’s business, administration and policies in exchange for a cash fee to Broadband Capital of $20,000 per month. The Broadband MSA was amended and/or restated in July 2016, January 2017, June 2018, March 2020 and August 2020. In June 2021, the Company extended the Broadband MSA to continue through June 2022. The Broadband MSA expired in June 2022. The Company recorded $0.0 million and $0.1 million during the three months ended September 30, 2022 and 2021, respectively, and $0.1 million and $0.2 million during the nine months ended September 30, 2022 and 2021, respectively, related to the Broadband MSA, which is included in general and administrative expenses in the condensed statements of operations. Amounts due to Broadband Capital were $0.1 million and $0 as of September 30, 2022 and December 31, 2021, respectively.

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Summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of significant accounting policies

Basis of presentation

Basis of presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

Unaudited interim results

Unaudited interim results

These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 28, 2022. The accompanying condensed financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 are unaudited but have been prepared on the same basis as the annual audited financial statements and include all adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Condensed balance sheet amounts as of December 31, 2021 have been derived from the audited financial statements as of that date.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the expected volatility used to estimate fair value of stock options and accrued research and development expenses. Estimates and assumptions are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from these estimates.

Segment and geographic information

Segment and geographic information

Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker (the “CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer. The Company views its operations as, and manages its business in, one operating segment operating exclusively in the United States of America.

Fair value of financial instruments

Fair value of financial instruments

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset

or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following:

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

Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.

Level 3 — Unobservable inputs for the asset or liability (i.e.; supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Cash and cash equivalents and restricted cash are Level 1 assets as of September 30, 2022 and December 31, 2021.

Restricted cash

Restricted cash

Restricted cash represents collateral provided for a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate facilities. Cash will be released from restriction upon termination of the lease. Restricted cash was $100,000 at both September 30, 2022 and 2021, respectively. The following table provides a reconciliation of the components of cash and cash equivalents and restricted cash presented in the condensed statements of cash flows:

(in thousands)	September 30, 2022		September 30, 2021
Cash and cash equivalents	$	27,078	$	56,243
Restricted cash		100		100
	$	27,178	$	56,343

Equity issuance costs

Equity issuance costs

The Company capitalized costs that were directly associated with establishing the ATM Agreement and shelf registration statement in 2021. These costs will remain capitalized until such financings are consummated, at which time such costs will be recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. Ongoing costs that are directly associated with the ATM Agreement are expensed as incurred.

Deferred offering costs were $0.3 million as of each of September 30, 2022 and December 31, 2021, respectively, on the condensed balance sheet.

Government assistance programs

Government assistance programs

The Company accounts for amounts received under its U.S. Department of Defense (“DoD”) expense reimbursement contract as contra-research and development expenses in the condensed statements of operations. The Company accounts for the employee retention credit received under the U.S. Department of Treasury Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) as contra-expense to personnel related costs within research and development and general and administrative expenses in the condensed statements of operations.

Research and development costs

Research and development costs

Research and development costs are charged to expense as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, share-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, preclinical and clinical development expenses, including manufacture and testing of clinical supplies, consulting and other contracted services. Additionally, under the terms of the license agreements described in Note 7, the Company is obligated to make future payments should certain development and regulatory milestones be achieved. Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the timing of receipt of invoices and payment of invoices and are reflected in the financial statements as a prepaid or accrued expense.

Share-based compensation

Share-based compensation

The Company’s share-based compensation program allows for grants of stock options and restricted stock awards. Grants are awarded to employees and non-employees, including directors.

The Company accounts for its share-based compensation awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognized compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognized compensation expense on a straight-line basis over the service period. The Company classified share-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

The Company estimates the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of Company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and biopharmaceutical industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The exercise price is the fair value of the common stock as of the measurement date.

Net loss per share

Net loss per share

Basic net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share of common stock is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share of common stock is computed by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents.

The following potentially dilutive securities outstanding as of September 30, 2022 and 2021 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2022	2021
Stock options(1)	2,509,759	1,936,546
Common stock warrants(1)	1,303,112	1,314,223
	3,812,871	3,250,769

(1) Represents common stock equivalents.

In periods in which the Company reports a net loss per share of common stock, diluted net loss per share of common stock is the same as basic net loss per share of common stock since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss per share of common stock for the three and nine months ended September 30, 2022 and 2021.

Leases

Leases

Effective January 1, 2022, the Company adopted ASU No. 2016-02, Leases (“ASC 842”) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date. The results for reporting periods beginning after January 1, 2022 are presented in accordance with ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards that were in effect prior to January 1, 2022.

At the inception of an arrangement, the Company determines whether an arrangement contains a lease based on facts and circumstances present in the arrangement. An arrangement is or contains a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Typically, lessees are required to recognize leases with a term greater than one year on the balance sheet as an operating or finance lease liability and right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company has elected the practical expedient to not recognize leases with a term of 12 months or less. The Company does not have any financing leases as of September 30, 2022.

Operating lease liabilities and their corresponding right-of-use assets are recorded based on their present value of lease payments over the remaining lease term. Options to extend the lease term are included in the Company’s assessment of the lease term only if there is a reasonable assessment that the Company will renew. Leases are discounted to its present value using either the interest rate implicit in the Company’s lease or its incremental borrowing rate, which reflects the fixed rate in which the Company could borrow on a collateralized basis the amount of lease payments in the same currency, for a similar term, in a similar economic environment.

Recent Accounting Pronouncements

Recently adopted accounting standards

On January 1, 2022, the Company adopted ASC 842, which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840. The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements. The Company adopted ASC 842 using the modified retrospective approach. The Company elected the package of practical expedients available for existing contracts, which allowed the Company to carry forward its historical assessments of lease identification, lease classification, and initial direct costs. The Company also elected a policy to not apply the recognition requirements of ASC 842 for short-term leases with a term of 12 months or less.

As of January 1, 2022, the effective date, the Company identified one operating lease arrangement relating to the Company’s headquarters facility and one short-term lease relating to laboratory equipment. The adoption of ASC 842 resulted in a recognition of an ROU asset and lease liability of $0.2 million on the Company’s condensed balance sheet

relating to the leases as of January 1, 2022. The adoption of the standard did not have a material effect on the Company’s condensed statements of operations and condensed statements of cash flows (Note 8).

Recently issued accounting pronouncements

In November 2021, the FASB issued ASU Topic 832, Disclosures by Business Entities about Government Assistance (“ASC 832”). This standard requires annual disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect of the transactions on an entity’s financial statements. The effective date of ASC 832 is for financial statements issued for annual periods beginning after December 15, 2021. The Company is currently evaluating the effect ASC 832 will have on its financial statements and related disclosures.

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Summary of significant accounting policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of significant accounting policies

Schedule of reconciliation of the components of cash and restricted cash reported in balance sheet

(in thousands)	September 30, 2022		September 30, 2021
Cash and cash equivalents	$	27,078	$	56,243
Restricted cash		100		100
	$	27,178	$	56,343

Schedule of potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive

The following potentially dilutive securities outstanding as of September 30, 2022 and 2021 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2022	2021
Stock options(1)	2,509,759	1,936,546
Common stock warrants(1)	1,303,112	1,314,223
	3,812,871	3,250,769

(1) Represents common stock equivalents.

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Prepaid expenses and other assets (Tables)

9 Months Ended

Sep. 30, 2022

Prepaid expenses and other assets

Schedule of prepaid expenses and other current assets

(in thousands)	September 30, 2022		December 31, 2021
CARES Act employee retention credit receivable	$	847	$	—
Research and development advance payments		530		586
Other prepaids and short-term deposits		324		492
Reimbursement receivable from DoD		243		2,674
Prepaid insurance		217		2,019
Unbilled reimbursement receivable from DoD		—		1,638
	$	2,161	$	7,409

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Accrued expenses and other liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Accrued expenses and other liabilities

Schedule of accrued expenses and other liabilities

(in thousands)	September 30, 2022		December 31, 2021
Research and development	$	2,514	$	2,840
Compensation and related benefits		1,367		1,246
Professional fees		236		227
Short-term operating lease liability and other liabilities		91		317
Deferred research obligations		22		2,021
	$	4,230	$	6,651

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Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases

Supplemental balance sheet information

Supplemental condensed balance sheet information related to leases as of September 30, 2022 was as follows (in thousands):

Operating leases:
Operating lease right-of-use assets	$	171
Operating lease liability	$	86
Operating lease liability, net of current portion		93
Total operating lease liability	$	179

Supplemental lease expense

Operating lease expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands):

Operating lease cost (in thousands)		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
General and administrative	$	40	$	57
Research and development		20		124
Total lease expense	$	60	$	181

Schedule of other information related to the operating lease

	Nine Months Ended September 30, 2022
Weighted-average remaining lease term (in years)	1.50
Weighted-average discount rate	9.0%

Supplemental cash flow information

Supplemental cash flow information related to the operating lease was as follows (in thousands):

		Nine Months Ended September 30, 2022
Cash paid for operating lease liability	$	173

Schedule of future minimum lease payments under operating lease

As of September 30, 2022, minimum rental commitments under the operating lease were as follows (in thousands):

Years ending December 31,	Amount
2022 (represents remaining three months in 2022)	$	61
2023		246
2024		63
Total lease payments		370
Less imputed interest		(191)
Present value of lease liability	$	179

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Common stock (Tables)

9 Months Ended

Sep. 30, 2022

Common stock

Schedule of warrants outstanding

At September 30, 2022, common stock warrants outstanding were as follows:

Warrants	Warrants Outstanding	Exercise Price per Share	Expiration Date
Series A	803,112	$ 9.00	June 2, 2023
Series B	500,000	$ 10.00	April 28, 2024
	1,303,112

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Share-based compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-based compensation

Schedule of Stock-based compensation expense

Share-based compensation expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	480	$	402	$	1,387	$	924
General and administrative		860		753		2,590		1,305
	$	1,340	$	1,155	$	3,977	$	2,229

Weighted average assumptions used in option-pricing

The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:

	Nine Months Ended September 30,
	2022			2021
Expected volatility		85.6	%		83.1	%
Risk-free interest rate		2.7	%		1.0	%
Expected term (in years)		5.97			6.04
Expected dividend yield		—			—
Fair value of common stock	$	3.64		$	23.61

Summary of option activity

A summary of option activity under the Plans and 2020 Plan during the nine months ended September 30, 2022 is as follows:

				Weighted
		Weighted		average
		average		remaining
	Number of	exercise price		contractual
	shares	per share		term (years)
Outstanding at January 1, 2022	2,005,756	$	11.26	8.50
Granted	543,900		3.64	9.45
Forfeited	(22,042)		12.20	—
Expired	(634)		17.96	—
Exercised	(17,221)		1.85	7.34
Outstanding at September 30, 2022	2,509,759		9.66	8.12
Exercisable at September 30, 2022	1,111,573		8.41	7.41

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Nature of the business (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Oct. 14, 2021	Oct. 01, 2021
Net loss	$ 8,533	$ 7,720	$ 29,110	$ 16,859
Accumulated deficit	108,215		108,215		$ 79,105
Securities aggregate price						$ 200,000
Cash and cash equivalents	$ 27,078	$ 56,243	$ 27,078	$ 56,243	$ 49,229
Open Market Sale | Maximum
Securities aggregate price							$ 75,000

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Summary of significant accounting policies - Narrative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) segment	Jan. 01, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)
Summary of significant accounting policies
Number of operating segments | segment	1
Restricted cash	$ 100		$ 100	$ 100
Deferred offering costs	300		$ 300
Operating lease liability		$ 200
Operating right-of-use asset, net	$ 171	$ 200
Expected dividend yield	0.00%

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Summary of significant accounting policies - Components of cash and restricted cash (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Summary of significant accounting policies
Cash and cash equivalents	$ 27,078	$ 49,229	$ 56,243
Restricted cash	100		100
Cash and restricted cash	$ 27,178	$ 49,329	$ 56,343	$ 39,866

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Summary of significant accounting policies - Anti-dilutive (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share, Diluted, Other Disclosures [Abstract]
Anti-dilutive securities	3,812,871	3,250,769
Stock options
Earnings Per Share, Diluted, Other Disclosures [Abstract]
Anti-dilutive securities	2,509,759	1,936,546
Common stock warrants
Earnings Per Share, Diluted, Other Disclosures [Abstract]
Anti-dilutive securities	1,303,112	1,314,223

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Government assistance programs (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2020	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	May 31, 2021	Mar. 27, 2020
Unusual or Infrequent Item, or Both [Line Items]
Contra-research and development expense				$ 600
Refundable employee retention credit								$ 800
Contra General And Administrative Expense				200
Contra expenses		$ 0	$ 0		$ 0
Employee retention credit receivable		847		847		$ 0
Other Transaction Authority for Prototype Agreement
Unusual or Infrequent Item, or Both [Line Items]
Grants Receivable	$ 13,300						$ 17,600
Payment period of reimbursement contract	30 days
Contra-research and development expense		0	$ 5,300	600	$ 13,400
Prepaid expenses and other current assets		200		200		2,700
Deferred research obligation liability		0		0		2,000
Grant expected to be received		$ 0		0		$ 1,600
Reimbursement expenses received				$ 17,400

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Prepaid expenses and other assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Prepaid expenses and other assets
CARES Act employee retention credit receivable	$ 847	$ 0
Research and development advance payments	530	586
Other prepaids and short-term deposits	324	492
Reimbursement receivable from DoD	243	2,674
Prepaid insurance	217	2,019
Unbilled reimbursement receivable from DoD		1,638
Prepaid expenses and other assets	$ 2,161	$ 7,409

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Accrued expenses and other liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued expenses and other liabilities
Research and development	$ 2,514	$ 2,840
Compensation and related benefits	1,367	1,246
Professional fees	236	227
Short-term operating lease liability and other liabilities	91	317
Deferred research obligations	22	2,021
Accrued expenses and other liabilities	$ 4,230	$ 6,651

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Long-term debt (Details) $ in Millions	Apr. 30, 2020 USD ($)
Paycheck Protection Program
Debt Instrument [Line Items]
Debt amount	$ 0.5

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Commitments and contingencies (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Commitments and contingencies
Defined contribution	$ 0.1	$ 0.1	$ 0.2	$ 0.1
Product development and regulatory approval milestone payments	2.6		2.6
Commercial milestone payments	1.5		1.5
Collaborative agreement, milestone payments made	$ 0.0	$ 0.0	$ 0.1	$ 0.0

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Leases (Details) - Office and laboratory space	1 Months Ended
	Dec. 31, 2021	May 31, 2017 ft² item
Lessee, Lease, Description [Line Items]
Lease term		62 months
Area | ft²		11,000
Number of extension | item		2
Period of extension	18 months	5 years

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Leases - Balance Sheet related information (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jan. 01, 2022
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets	$ 171	$ 200
Total operating lease liability		$ 200
Office and laboratory space
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets	171
Operating lease liability	86
Operating lease liability, net of current portion	93
Total operating lease liability	$ 179

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Leases - Lease expense (Details) - Office and laboratory space - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lessee, Lease, Description [Line Items]
Operating lease cost	$ 60		$ 181
Lease expense		$ 100		$ 200
General and administrative
Lessee, Lease, Description [Line Items]
Operating lease cost	40		57
Research and development
Lessee, Lease, Description [Line Items]
Operating lease cost	20		124
Short-term lease cost	$ 0		$ 100

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Leases - Additional lease related information (Details) - Office and laboratory space	Sep. 30, 2022
Lessee, Lease, Description [Line Items]
Weighted-average remaining lease term	1 year 6 months
Weighted-average discount rate	9.00%

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Leases - Cash flow information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Office and laboratory space
Lessee, Lease, Description [Line Items]
Cash paid for operating lease liability	$ 173

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Leases - Lease maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jan. 01, 2022
Lessee, Lease, Description [Line Items]
Total operating lease liability		$ 200
Office and laboratory space
Lessee, Lease, Description [Line Items]
2022 (represents remaining three months in 2022)	$ 61
2023	246
2024	63
Total lease payments	370
Less imputed interest	(191)
Total operating lease liability	$ 179

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Common stock (Details) $ in Thousands			9 Months Ended
	Aug. 04, 2021 $ / shares shares	Apr. 28, 2021 USD ($) $ / shares item shares	Sep. 30, 2022 Vote $ / shares	Sep. 30, 2021 USD ($) $ / shares
Common stock voting right | Vote			1
Stock issued | shares	14,115
Share price	$ 15.94
Proceeds from issuance of common stock | $				$ 1,338
Fair value of common stock			$ 3.64	$ 23.61
Private offering
Stock issued | shares		1,000,000
Number of share for company's common stock | item		1
Number of warrants | shares		1
Share price		$ 27.00
Proceeds from issuance of common stock | $		$ 27,000
Exercise price		$ 45.00
Warrants and Rights Outstanding, Term		3 years
Fair Value of Warrants | $		$ 6,000
Warrants and Rights Outstanding, Measurement Input		28.70
Volatility rate
Warrants and Rights Outstanding, Measurement Input		0.827
Risk-free interest rate
Warrants and Rights Outstanding, Measurement Input		0.0035
Strike price (per share)
Warrants and Rights Outstanding, Measurement Input		45.00

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Common stock - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Sep. 02, 2022	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 01, 2022
Class of Warrant or Right [Line Items]
Deemed dividend	$ 600	$ 622	$ 622
Series B Warrants
Class of Warrant or Right [Line Items]
Exercise price	$ 10.00	$ 10.00	$ 10.00		$ 45.00
Strike price	$ 10.00	$ 10.00	$ 10.00		$ 45.00
Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding		1,303,112	1,303,112
Exercise price				$ 9.00
Warrants exercised, numbers			0	148,653
Gross proceeds from issuance of warrants				$ 1,300
Exercise of common stock warrants (shares)				148,653
Additional warrants exercised on cashless				72,320
Shares issued in cashless exercise				45,322
Additional warrants exercise price				$ 9.00
Strike price				$ 9.00
Warrants | Series A Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding		803,112	803,112
Exercise price		$ 9.00	$ 9.00
Strike price		$ 9.00	$ 9.00
Warrants | Series B Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding		500,000	500,000
Exercise price		$ 10.00	$ 10.00
Strike price		$ 10.00	$ 10.00

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Share-based compensation - Plans (Details) - shares	1 Months Ended	9 Months Ended
	Aug. 31, 2021	Sep. 30, 2022	Jul. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		10 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	13,500
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant			388,748
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Threshold Percentage Of Total Number Of Common Stock Outstanding		4.00%
Shares available for future issuance		1,336,088
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant		352,446
Authorized stock options		125,000
Employee Stock Purchase Plan, Threshold Period For Which Common Stock Is Automatically Added To Arrive At Authorized Shares		10 years
Percentage of outstanding capital stock		1.00%
Number of common shares added in authorized		1,000,000
Awards granted		0

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Share-based compensation - Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,340	$ 1,155	$ 3,977	$ 2,229
Unrecognized compensation cost	10,500		$ 10,500
Recognition period			3 years 1 month 6 days
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	0	200	$ 0	200
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	480	402	1,387	924
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 860	$ 753	$ 2,590	$ 1,305

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Share-based compensation - Assumptions (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based compensation
Expected volatility	85.60%	83.10%
Risk-free interest rate	2.70%	1.00%
Expected term (in years)	5 years 11 months 19 days	6 years 14 days
Expected dividend yield	0.00%
Fair value of common stock	$ 3.64	$ 23.61

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Share-based compensation - Option Activity and Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options, Beginning balance	2,005,756
Options, Granted	543,900
Options, Forfeited	(22,042)
Options, Expired	(634)
Options, Exercised	(17,221)
Options, Ending balance	2,509,759		2,005,756
Options, Exercisable	1,111,573
Weighted Average Exercise price
Beginning price	$ 11.26
Granted	3.64
Forfeited	12.20
Expired	17.96
Exercised	1.85
Ending price	9.66		$ 11.26
Exercisable	$ 8.41
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted Average Remaining Contractual Term	8 years 1 month 13 days		8 years 6 months
Weighted Average Remaining Contractual Term, Granted	9 years 5 months 12 days
Weighted Average Remaining Contractual Term, Exercised	7 years 4 months 2 days
Weighted Average Remaining Contractual Term, Exercisable	7 years 4 months 28 days
Weighted average grant date fair value	$ 2.65	$ 17.77
Intrinsic value, exercised	$ 0.1
Intrinsic value, outstanding	$ 3.4

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Related party transactions (Details) - Broadband services agreement - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Nov. 30, 2015
Related Party Transaction [Line Items]
Monthly cash fee payment						$ 20,000
Related party transaction, expenses	$ 0.0	$ 100,000	$ 100,000	$ 200,000
Due to related party	$ 100,000		$ 100,000		$ 0