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

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

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-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 Rule12b-2 of the Exchange Act.

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 Rule12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April 30, 2018, the registrant had 29,839,086~~November 11, 2022, there were 69,893,434 shares of ~~common stock,~~the registrant’s Common Stock, $0.001 par value per share, outstanding.

~~FORWARD-LOOKING STATEMENTS~~Summary of the Material Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. These risks include, but are not limited to, the following:

The summary risk factors described above should be read together with the text of the full risk factors in Item 1A. “Risk Factors” and the other information set forth in this Quarterly Report on Form 10-Q, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

This Quarterly Report on Form10-Q contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this Quarterly Report on Form10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, ~~plan,~~plans, objectives of management and expected market growth are forward-looking statements. ~~You~~These statements involve known and unknown risks, uncertainties, and other important factors that may cause our 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,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” 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 bylargely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Although we believe that the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” orexpectations reflected in the ~~negative version of these words or other comparable words. Such~~ forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to ~~various~~a number of risks, uncertainties and assumptions described in Item 1A. “Risk Factors.” Because forward-looking statements are inherently subject to risks and ~~uncertainties. Accordingly, there are~~uncertainties, some of which cannot be predicted or ~~will~~quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be ~~important~~achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual ~~outcomes or~~ results to differ ~~materially~~ from ~~those indicated in these statements. We believe these factors include but are not limited~~our expectations include:

~~These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report on Form10-Q.~~ ~~The~~While we may elect to update these forward-looking statements ~~contained~~at some point in ~~this Quarterly Report on Form10-Q~~ ~~are made as of~~ the ~~date of this Quarterly Report on Form10-Q,~~ ~~and we undertake no obligation to publicly update or review any forward-looking statement,~~future, whether as a result of any new information, future ~~developments~~events, or ~~otherwise.~~


							September 30,			December 31,
	March 31, 2018			December 31, 2017			2022			2021
Assets
Current assets:
Cash and cash equivalents	$	25,704		$	28,270		$	140,568		$	219,684
Marketable securities		6,696			12,691			148,526		$	—
Accounts receivable		1,601			830
Prepaid expenses and other current assets		1,176			513			6,068			2,949
Restricted cash		50			75			1,255			—

Total current assets		35,227			42,379			296,417			222,633
Operating lease, right-of-use asset								23,832			2,771
Property and equipment, net		3,902			4,108			6,543			1,706
Restricted cash		1,255			1,255			—			1,255
Deferred offering costs		2,612			1,373
Other assets		419			—			4,768			3,727

Total assets	$	43,415		$	49,115		$	331,560		$	232,092

Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,083		$	1,346		$	4,093		$	3,483
Accrued expenses and other current liabilities		2,358			2,953			14,384			8,210
Deferred revenue		17,519			6,891

CVR liability (Note 3)								3,060			3,060
Operating lease liability								2,014			2,324
Total current liabilities		22,960			11,190			23,551			17,077
Deferred rent		902			906
Deferred revenue, net of current portion		3,655			8,714

Operating lease liability, net of current portion								18,067			831
Total liabilities		27,517			20,810			41,618			17,908

Commitments and contingencies (Note 11)
Redeemable convertible preferred stock (Series A and B), $0.001 par value; 20,791,407 shares authorized at March 31, 2018 and December 31, 2017; 20,771,850 shares issued and outstanding at March 31, 2018 and December 31, 2017; liquidation preference of $77,297 at March 31, 2018 and December 31, 2017		77,167			77,151

Stockholders’ deficit:
Common stock, $0.001 par value; 60,040,000 shares authorized at March 31, 2018 and December 31, 2017; 10,208,058 shares and 10,201,690 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively		10			10
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value; 9,000,000 shares authorized; no shares issued or outstanding								—			—
Series A non-voting convertible preferred stock, $0.001 par value; 1,000,000 shares authorized; 81,050 and 103,289 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively								65,830			85,400
Common stock, $0.001 par value; 150,000,000 shares authorized; 69,857,972 shares and 43,805,922 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively								70			44
Additionalpaid-in capital		2,990			2,499			595,801			399,713
Accumulated other comprehensive loss		(7	)		(16	)		(163	)		—
Accumulated deficit		(64,262	)		(51,339	)		(371,596	)		(270,973	)

Total stockholders’ deficit		(61,269	)		(48,846	)

Total liabilities, redeemable convertible preferred stock and stockholders’ deficit	$	43,415		$	49,115

Total stockholders’ equity								289,942			214,184
Total liabilities and stockholders’ equity							$	331,560		$	232,092

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


	Three Months Ended March 31,						Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017
Collaboration revenue	$	2,220		$	1,827
							2022			2021			2022			2021
Operating expenses:
Research and development		8,142			6,952			29,936			14,798			84,885			35,399
General and administrative		1,064			944			6,885			5,021			19,209			14,512

Total operating expenses		9,206			7,896			36,821			19,819			104,094			49,911

Loss from operations		(6,986	)		(6,069	)		(36,821	)		(19,819	)		(104,094	)		(49,911	)

Other income (expense):
Other income:
Interest income		81			90			1,500			115			1,879			360
Other income, net		170			40			259			620			1,592			1,847

Change in fair value of CVR liability								—			—			—			343
Total other income, net		251			130			1,759			735			3,471			2,550

Net loss		(6,735	)		(5,939	)	$	(35,062	)	$	(19,084	)	$	(100,623	)	$	(47,361	)

Accretion of redeemable convertible preferred stock to redemption value		(16	)		(16	)

Net loss attributable to common stockholders	$	(6,751	)	$	(5,955	)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.66	)	$	(0.58	)	$	(0.50	)	$	(0.48	)	$	(1.84	)	$	(1.25	)

Weighted average common shares outstanding, basic and diluted		10,204,591			10,190,228			69,576,359			39,848,943			54,780,041			37,741,526

Comprehensive loss:
Net loss	$	(6,735	)	$	(5,939	)	$	(35,062	)	$	(19,084	)	$	(100,623	)	$	(47,361	)
Other comprehensive income (loss):
Unrealized gains (losses) on marketable securities, net of tax of $0		9			(12	)

Total other comprehensive income (loss)		9			(12	)

Other comprehensive loss
Net unrealized losses on marketable securities								(163	)		—			(163	)		—
Total other comprehensive loss								(163	)		—			(163	)		—
Comprehensive loss	$	(6,726	)	$	(5,951	)	$	(35,225	)	$	(19,084	)	$	(100,786	)	$	(47,361	)

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

Nature of the Business and Basis of Presentation

~~Unum Therapeutics~~Cogent Biosciences, Inc. (“~~Unum”~~Cogent” or the “Company”) is a ~~clinical-stage biopharmaceutical~~biotechnology company focused on developing precision therapies for genetically defined diseases. Cogent’s approach is to design rational precision therapies that treat the ~~development~~underlying cause of disease and ~~commercialization~~improve the lives of patients. Cogent’s most advanced program is bezuclastinib, also known as CGT9486, a highly selective tyrosine kinase inhibitor designed to potently inhibit the KIT D816V mutation as well as other mutations in KIT exon 17. In the vast majority of cases, KIT D816V is responsible for driving Systemic Mastocytosis (“SM”), a serious disease caused by unchecked proliferation of mast cells. Exon 17 mutations are also found in patients with advanced gastrointestinal stromal tumors (“GIST”), a type of cancer with strong dependence on oncogenic KIT signaling. Bezuclastinib is a highly selective and potent KIT inhibitor with the potential to provide a new treatment option for these patient populations. In addition to bezuclastinib, the Company’s research team is developing a portfolio of novel ~~immunotherapy products designed~~targeted therapies to ~~harness the power of a patient’s immune system to cure cancer.~~help patients fighting serious, genetically driven diseases, initially targeting FGFR2 and ErbB2. The Company’s proprietary technology, called antibody-coupled T cell receptor (“ACTR”), is a universal, engineered cell therapy that is intended to be used in combination with a wide range of tumor-specific antibodies to target different tumor types. UnumCompany was incorporated in March 2014 under the laws of the State of ~~Delaware~~.Delaware. On October 2, 2020 the Company filed an amendment to its certificate of incorporation to change its name from Unum Therapeutics Inc. to Cogent Biosciences, Inc. The name change became effective on October 6, 2020. In connection with the name change, the Company’s common stock began trading under the ticker symbol “COGT” and the new CUSIP for the Company’s common stock is 19240Q 201.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, the impact of COVID-19, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the ~~Company��s~~Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize ~~significant~~ revenue from product sales.

~~On March 16, 2018, the Company effected aone-for-1.5701314513884~~ reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s redeemable convertible preferred stock (see Note 7). Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the redeemable convertible preferred stock conversion ratios.

On April 3, 2018, the Company completed an initial public offering (“IPO”) of its common stock and issued and sold 5,770,000 shares of common stock at a public offering price of $12.00 per share, resulting in net proceeds of $64.4 million after deducting underwriting discounts and commissions but before deducting offering costs. In addition, Seattle Genetics, Inc. (“Seattle Genetics”) purchased from the Company, concurrently with the IPO in a private placement, $5.0 million of shares of common stock at a price per share equal to the initial public offering price, or 416,666 shares (the “concurrent private placement”). The shares of common stock sold to Seattle Genetics in the concurrent private placement are not registered under the Securities Act of 1933, as amended, and are subject to a~~180-daylock-up~~ ~~agreement with the underwriters of the IPO.~~

Upon closing of the IPO, the Company’s outstanding redeemable convertible preferred stock automatically converted into shares of common stock (see Note 7). Upon conversion of the redeemable convertible preferred stock, the Company reclassified the carrying value of the redeemable convertible preferred stock to common stock and additional~~paid-in~~ ~~capital.~~

On April 25, 2018, the Company issued and sold an additional 215,000 shares of its common stock at the IPO price of $12.00 per share pursuant to the underwriters’ partial exercise of their option to purchase additional shares of common stock, resulting in additional net proceeds of $2.4 million after deducting underwriting discounts and commissions.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has funded its operations with the sales of redeemable convertible preferred stock, payments received in connection with a collaboration agreement, and most recently, with proceeds from the IPO and concurrent private placement completed in April 2018. The Company has incurred recurring losses since inception, including a net ~~losses attributable to the Company~~loss of ~~$6.7~~$100.6 million for the ~~three~~nine months ended ~~March 31, 2018 and $25.5 million for the year ended December 31, 2017.~~September 30, 2022. As of ~~March 31, 2018,~~September 30, 2022, the Company had an accumulated deficit of ~~$64.3~~$371.6 million. The Company expects to continue to generate operating losses in the foreseeable future. As of ~~May 14, 2018,~~ the issuance date of the interim condensed consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities ~~including net proceeds it received from the completion of its IPO and concurrent~~

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~private placement in April 2018,~~ will be sufficient to fund its operating expenses and capital expenditure requirements ~~through~~for at least the next 12 months from ~~the~~ issuance ~~date~~ of the ~~interim~~condensed consolidated financial ~~statements, without considering available borrowings under~~statements.

The Company expects that it will continue to incur significant expenses in connection with its ongoing business activities. The Company will need to seek additional funding through equity offerings, debt financings, collaborations, licensing arrangements and other marketing and distribution arrangements, partnerships, joint ventures, combinations or divestitures of one or more of its assets or businesses. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborative arrangements or divest its assets. The terms of any financing may adversely affect the holdings or the rights of the Company’s ~~loan~~stockholders. Arrangements with collaborators or others may require the Company to relinquish rights to certain of its technologies or product candidates. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and ~~security agreement.~~development programs or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.6

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The consolidated balance sheet at December 31, ~~2017~~2021 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of ~~March 31, 2018~~September 30, 2022 and for the three and nine months ended ~~March 31, 2018~~September 30, 2022 and ~~2017~~2021 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, ~~2017~~2021 included in the Company’s ~~Registration Statement~~Annual Report on Form~~S-1,~~ ~~FileNo. 333-223414~~ 10-Kon file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of ~~March 31, 2018~~September 30, 2022 and results of operations for the three and nine months ended September 30, 2022 and 2021 and cash flows for the ~~three~~nine months ended ~~March 31, 2018~~September 30, 2022 and ~~2017~~2021 have been made. The Company’s results of operations for the three and nine months ended ~~March 31, 2018~~September 30, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, ~~2018.~~2022.

Principles of Consolidation

~~Concentrations~~The accompanying condensed consolidated financial statements include the accounts of ~~Credit Risk and of Significant Suppliers~~

~~Financial instruments that potentially expose~~ the Company and its wholly-owned subsidiaries, Mono, Inc. and Kiq Bio LLC. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to ~~concentrations~~make estimates and assumptions that affect the reported amounts of ~~credit risk consist primarily~~assets and liabilities, the disclosure of ~~cash~~contingent assets and cash equivalents. The Company maintains most of its cash and cash equivalents at three accredited financial institutions. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company is dependent on third-party vendors for its product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of vendors to manufacture supplies and process its product candidates for its development programs. These programs could be adversely affected by a significant interruption in the manufacturing process.

~~Cash Equivalents~~

~~The Company considers all highly liquid investments with original maturities of three months or less~~liabilities at the date of ~~purchase~~the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses, the valuation of the CVR liability and the valuation of stock-based awards. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be ~~cash equivalents. Cash equivalents consisted of money market funds at March 31, 2018~~reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and ~~December 31, 2017.~~

~~Fair Value Measurements~~

~~Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset~~experience. Actual results may differ from those estimates or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:assumptions.

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

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts receivable, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

Marketable Securities

The Company’s marketable securities, consisting of debt securities, are classifiedas ~~available-for-sale and~~available-for-sale. Available-for-sale marketable debt securities are carried at fair value with the unrealized gains and losses ~~reported~~included in other comprehensive income (loss) as a component of ~~accumulated other comprehensive income (loss) in~~ stockholders’ equity ~~(deficit).~~until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income and/or expense over the life of the instrument. Realized gains and losses ~~and declines in value~~are determined ~~to be other than temporary are based on~~using the specific identification method and are included ~~as a component of~~in other income (expense)~~, net in the consolidated statements of operations and comprehensive loss.~~. The Company ~~classifies~~reviews its ~~marketable~~portfolio of available-for-sale debt securities, ~~with maturities beyond one year as short-term, based on their highly liquid nature~~using both quantitative and ~~because such marketable securities are available for current operations.~~

~~The Company evaluates its marketable securities with unrealized losses for other-than-temporary impairment. When assessing marketable securities for other-than-temporary~~qualitative factors, to determine if declines in fair value ~~the Company considers such factors as, among~~below cost have resulted from a credit-related loss or other ~~things, how significant~~factors. If the decline in fair value is asdue to credit-related factors, a ~~percentage of~~loss is recognized in net income, and if the original cost, how long the market value of the investment has been less than its original cost, the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recoverydecline in fair value ~~and market conditions in general. If any adjustment~~is not due to ~~fair value reflects a decline in~~credit-related factors, the value of the investment that the Company considers to be “other than temporary,” the Company reduces the investment to fair value through a charge to the statement of operations and comprehensive loss. No such adjustments were necessary during the periods presented.

~~Classification and Accretion of Redeemable Convertible Preferred Stock~~

The Company has classified redeemable convertible preferred stock outside of stockholders’ equity (deficit) because the shares contain certain redemption features that are not solely within the control of the Company. The carrying values of the redeemable convertible preferred stock are accreted to their respective redemption values from the date of issuance through the earliest date of redemption.

~~Collaboration Agreements~~

~~The Company follows the accounting guidance for collaboration agreements, which requires that certain transactions between the Company and collaborators be~~loss is recorded in ~~its consolidated statements of operations and~~other comprehensive loss on either a gross basis or net basis, depending on the characteristics of the collaborative relationship, and requires enhanced disclosure of collaborative relationships. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of operations and comprehensive loss based on the nature of the underlying activity. If payments to and from collaborative partners are not within the scope of other authoritative accounting literature, the consolidated statements of operations classification for the payments is based on a reasonable, rational analogy to authoritative accounting literature that is applied in a consistent manner. When the Company has concluded that it has a customer relationship with one of its collaborators, such as that with Seattle Genetics (see Note 5), the Company follows the guidance in Accounting Standards Codification (“ASC”) Topic 606, ~~Revenue~~ ~~From Contracts With Customers~~ ~~(“ASC 606”)~~income (loss).

~~Revenue Recognition of Collaboration Agreements~~

On January 1, 2018, the Company adopted the new revenue standard, discussed below under the heading “Recently Adopted Accounting Pronouncements”, which amended revenue recognition principles and provides a

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

single, comprehensive set of criteria for revenue recognition within and across all industries. The new revenue standard provides a five-step framework whereby revenue is recognized when control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of the new revenue standard, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when collectability of the consideration to which the Company is entitled in exchange for the goods or services it transfers to the customer is determined to be probable.

At contract inception, once the contract is determined to be within the scope of the new revenue standard, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct bundle is identified. In determining whether goods or services are distinct, management evaluates certain criteria, including whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (capable of being distinct) and (ii) the good or service is separately identifiable from other goods or services in the contract (distinct in the context of the contract).

At the inception of an arrangement that includes options for a customer to purchase additional services or products at agreed upon prices in the future, the Company evaluates whether each option provides a material right. An option that provides a material right will be accounted for as a separate performance obligation.

The Company then determines the transaction price, which is the amount of consideration it expects to be entitled from a customer in exchange for the promised goods or services, for each performance obligation and recognizes the associated revenue as each performance obligation is satisfied. The Company’s estimate of the transaction price for each contract includes all variable consideration to which it expects to be entitled. Variable consideration includes payments in the form of collaboration payments, regulatory milestone payments, commercial milestone payments, and royalty payments. For collaboration, regulatory milestone, and commercial milestone payments the Company evaluates whether it is probable that the consideration associated with each milestone will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are considered constrained and excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company~~re-evaluates~~ the probability of a significant reversal of the cumulative revenue recognized for its milestones, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative~~catch-up~~ ~~basis. The Company excludes sales-based royalties until the sale occurs.~~

The new revenue standard requires the Company to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined in the new revenue standard as the price at which an entity would sell a promised good or service separately to a customer. If other observable transactions in which the Company has sold the same performance obligation separately are not available, the Company is required to estimate the standalone selling price of each performance obligation. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. A performance obligation is satisfied and revenue is recognized when “control” of the promised good or service is transferred, either over time or at a point in time, to the customer. A customer obtains control of a good or service if it has the ability to (1) direct its use and (2) obtain substantially all of the remaining benefits from it.

If a contract should be accounted for as a combined performance obligation, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. The Company will recognize revenue using the~~cost-to-cost~~ ~~method, which it believes best depicts the transfer of control to the customer.~~

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Under thecost-to-cost~~ method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue will be recorded as a percentage of the estimated transaction price based on the extent of progress towards completion. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. The estimate of the Company’s measure of progress and estimate of variable consideration to be included in the transaction price will be updated at each reporting date as a change in estimate. The amount of transaction price allocated to the satisfied portion of the performance obligation, based on the Company’s measure of progress, will be recognized immediately on a cumulative~~catch-up~~ ~~basis, resulting in an adjustment to revenue in the period of change. The amount related to the unsatisfied portion will be recognized as that portion is satisfied over time.~~

Amounts received prior to satisfying the revenue recognition criteria listed above are recorded as deferred revenue in the accompanying consolidated balance sheets. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue. Amounts not expected to be recognized as revenue within the following 12 months of the balance sheet date are classified as deferred revenue, net of current portion. At March 31, 2018, the Company had current deferred revenue and deferred revenue, net of current portion of $17.5 million and $3.7 million, respectively, related to its collaboration. The Company recognized revenue of $2.2 million during three months ended March 31, 2018 from the deferred revenue balance at January 1, 2018. The Company recognizes deferred revenue by first allocating from the beginning deferred revenue balance to the extent the beginning deferred revenue balance exceeds the revenue to be recognized. Billings during the period are added to the deferred revenue balance to be recognized in future periods. To the extent that the beginning deferred revenue balance is less than revenue to be recognized during the period, billings during the period are allocated to revenue. In the event that a collaboration agreement was to be terminated and the Company had no further performance obligations, the Company would recognize as revenue any portion of the upfront payment and other payments that had not previously been recorded as revenue and were classified as deferred revenue at the date of such termination.

Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less or the amount is immaterial. At March 31, 2018, the Company has not capitalized any costs to obtain its contract.

Recently Adopted Accounting Pronouncements

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASUNo. 2014-09,~~~~Revenue from Contracts with Customers (Topic 606)~~~~(“ASU2014-09”),~~ which supersedes existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard outlines a five-step process to achieve this principle, and requires companies to use more judgment and make more estimates than under the previous guidance. The Company determined that these judgments and estimates include identifying performance obligations in the customer contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU~~2014-09~~ ~~also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts.~~ In August ~~2015,~~2020, the FASB issued ASU~~2015-14,~~~~Revenue from~~ 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts ~~with Customers (Topic 606): Deferral~~in Entity’s Own Equity (Subtopic 815-40) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity’s own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the ~~Effective Date, which delayed the effective date of~~settlement assessment for contracts in an entity’s own equity. The Company adopted ASU~~2014-09~~ such that the standard became effective for public entities for annual periods beginning after December 15, 2017 and for interim periods within those fiscal years. The FASB subsequently issued amendments to ASU~~No. 2014-09~~ ~~that had the same effective dates and transition requirements as ASU2014-09,~~ ~~all of which collectively are herein referred to as “ASC 606”.~~

On 2020-06 on January 1, 2018, the Company adopted the new revenue standard by applying the modified retrospective method to its collaboration agreement with Seattle Genetics (see Note 5) which was not completed as of January 1, 2018. As a result, while reporting periods beginning on the Company’s2022. The adoption of the new revenue standard are presented under the new revenue standard, prior period amounts have not been adjusted and continue to be presented under the revenue standard in effect prior to January 1, 2018.

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~The following table summarizes the cumulative effect to the Company’s consolidated balance sheet upon the adoption of the new revenue standard on January 1, 2018 (in thousands):~~

   Balance at
December 31, 2017    Adjustments    Balance at
January 1, 2018
Deferred revenue, current and net of current portion
   $ 15,605    $ 6,188    $ 21,793
Accumulated deficit
   $ (51,339 )    $ (6,188 )    $ (57,527 )

The $6.2 million adjustment is the result of the application of the new revenue standard regarding how entities should measure progress in satisfying performance obligations and the contract’s transaction price. Under ASC 606, the Company will recognize revenue using the~~cost-to-cost~~ method, which it believes best depicts the transfer of control to the customer. In contrast, under the previous revenue standard, the Company recognized revenue on a straight-line basis over the estimated period of performance. In addition, under ASC 606, the estimated transaction price will include variable consideration for payments expected to be earned for preclinical research and clinical development activities through Phase I, which, under the previous standard, the Company was precluded from including in the estimated transaction price until such payments were determinable and due.

The Company will account for the license, research and development services, and steering committee services under ASC 606 as a single performance obligation under the collaboration agreement, just as it accounted for those items as a single unit of accounting under the previous standard. The options held by Seattle Genetics are expected to continue to be accounted for separately as they do not represent material rights based on the criteria of ASC 606. Further, ASC 606 will not have an impact on the Company’s current accounting for milestone or royalty payments.

In accordance with the new revenue standard requirements, the following tables summarize the impact of adoption on the Company’s consolidated balance sheets, consolidated statements of operations and comprehensive loss, and consolidated statements of cash flows (in thousands):

~~Consolidated Balance Sheets~~

   At March 31, 2018
   Under Topic 606    Under Topic 605    Effect of Change
Deferred revenue, current portion
   $ 17,519    $ 7,222    $ 10,297
Deferred revenue, net of current portion
   $ 3,655    $ 7,323    $ (3,668 )
Accumulated deficit
   $ (64,262 )    $ (57,633 )    $ (6,629 )

~~Consolidated Statements of Operations and Comprehensive Loss~~

   Three Months Ended March 31, 2018
   Under Topic 606    Under Topic 605    Effect of Change
Collaboration revenue
   $ 2,220    $ 2,661    $ (441 )
Net loss
   $ (6,735 )    $ (6,294 )    $ (441 )
Net loss attributable to common stockholders
   $ (6,751 )    $ (6,310 )    $ (441 )
Net loss per share attributable to common stockholders, basic and diluted
   $ (0.66 )    $ (0.62 )    $ (0.04 )
Comprehensive loss
   $ (6,726 )    $ (6,285 )    $ (441 )

~~Consolidated Statements of Cash Flows~~

   Three Months Ended March 31, 2018
   Under Topic 606    Under Topic 605    Effect of Change
Net loss
   $ (6,735 )    $ (6,294 )    $ (441 )
Change in deferred revenue
   $ (619 )    $ (1,060 )    $ 441

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~In August 2016, the FASB issued ASUNo. 2016-15,~~~~Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments~~ ~~(“ASU2016-15”),~~ to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted the standard retrospectively for all periods presented on the required effective date of January 1, 2018, and its adoption had no impact on the Company’s financial position, results of operations or cash flows.

~~In November 2016, the FASB issued ASU2016-18,~~ ~~Statement of Cash Flows, Restricted Cash~~~~, requiring restricted cash and restricted cash equivalents to be included with cash and cash equivalents on the statement of cash flows when reconciling thebeginning-of-period~~ ~~andend-of-period~~ ~~total amounts shown on the statement of cash flows. The Company adopted~~ this standard during the first quarter of 2018. Restricted cash is now included as a component of cash, cash equivalents, and restricted cash on the Company’s unaudited consolidated statements of cash flows. The inclusion of restricted cash increased the beginning and ending balances of the unaudited consolidated statements of cash flows by $1.3 million for the three months ended March 31, 2018 and 2017.

~~In May 2017, the FASB issued ASUNo. 2017-09,~~~~Compensation—Stock Compensation~~~~(Topic 718): Scope of Modification Accounting~~ ~~(“ASU2017-09”),~~ ~~which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new~~ guidance modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The Company adopted the standard prospectively beginning on the required effective date of January 1, 2018, and its adoption did not have a material impact on the Company’s ~~financial position, results of operations or cash flows.~~

~~Recently Issued Accounting Pronouncements~~

~~In February 2016, the FASB issued ASUNo. 2016-02,~~~~Leases (Topic 842)~~ ~~(“ASU2016-02”),~~ which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a~~right-of-use~~ asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The guidance is effective for public entities for annual reporting periods beginning after December 15, 2018 and for interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU~~2016-02~~ ~~will have on its~~condensed consolidated financial statements.

~~In July 2017, the FASB issued ASUNo. 2017-11,~~~~Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives~~7

3. Marketable Securities and Hedging (Topic 815) I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception~~(“ASU2017-11”)~~. Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down-round features. Part II replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. ASU~~2017-11~~ is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU~~2017-11~~ ~~will have on its consolidated financial statements.~~

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

3. Fair Value of Financial Assets and Liabilities

~~Marketable~~The following table summarizes the Company's marketable securities ~~by security type consisted~~(in thousands):


	September 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury bills (due within one year)	$	148,689	$	5	$	(168	)	$	148,526
	$	148,689	$	5	$	(168	)	$	148,526

The Company did not hold any marketable securities as of ~~the following (in thousands):~~December 31, 2021.

   March 31, 2018
   Amortized
Cost    Gross
Unrealized
Gains    Gross
Unrealized
Losses    Fair
Value
U.S. Treasury notes (due within one year)
   $ 4,003    $ —      $ (5 )    $ 3,998
U.S. government agency bonds (due within one
year)
   2,700    —      (2 )    2,698








   $ 6,703    $ —      $ (7 )    $ 6,696

   December 31, 2017
   Amortized
Cost    Gross
Unrealized
Gains    Gross
Unrealized
Losses    Fair
Value
U.S. Treasury notes (due within one year)
   $ 5,007    $ —      $ (10 )    $ 4,997
U.S. government agency bonds (due within one
year)
   7,700    —      (6 )    7,694








   $ 12,707    $ —      $ (16 )    $ 12,691

The following tables present ~~information about~~ the Company’s fair value hierarchy for its financial assets ~~that~~and liabilities, which are measured at fair value on a recurring basis ~~(in~~(in thousands):


	Fair Value Measurements at March 31, 2018 Using:								Fair Value Measurements at September 30, 2022 Using:
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	—	$	22,293	$	—	$	22,293	$	117,982	$	—	$	—	$	117,982
Marketable securities:
U.S. Treasury notes		3,998		—		—		3,998
U.S. government agency bonds		—		2,698		—		2,698

	$	3,998	$	24,991	$	—	$	28,989

U.S. Treasury bills and notes									$	—	$	148,526	$	—	$	148,526
Total Assets									$	117,982	$	148,526	$	—	$	266,508
Liabilities:
CVR Liability									$	—	$	—	$	3,060	$	3,060
Total Liabilities									$	—	$	—	$	3,060	$	3,060

   Fair Value Measurements at December 31, 2017 Using:
   Level 1    Level 2    Level 3    Total
Cash equivalents:

Money market funds
   $ —      $ 24,196    $ —      $ 24,196
Marketable securities:

U.S. Treasury notes
   4,997    —      —      4,997
U.S. government agency bonds
   —      7,694    —      7,694








   $ 4,997    $ 31,890    $ —      $ 36,887


	Fair Value Measurements at December 31, 2021 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
CVR Liability	$	—	$	—	$	3,060	$	3,060
Total Liabilities	$	—	$	—	$	3,060	$	3,060

Money market funds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

On July 6, 2020, the Company issued a non-transferrable contingent value right (“CVR”), which was distributed to stockholders of record as of the close of business on July 6, 2020, and prior to the issuance of any shares to acquire Kiq Bio LLC (“Kiq”) (the “Kiq Acquisition”) or sold to the Private Investment in Public Equity (“PIPE”) investors. Holders of the CVR are entitled to receive common shares and/or cash payments from proceeds received by the Company, if any, related to the disposition of its legacy cell therapy assets for a period of three years from July 2020. In accordance with the terms of the CVR agreement, the payment to CVR holders will be made in shares or cash, depending on the timing of the receipt of the sales proceeds by the Company. For sales proceeds received by the Company prior to December 31, 2020, CVR holders were entitled to receive payment in the form of common shares of the Company. For sales proceeds received by the Company after December 31, 2020 and prior to July 2023, CVR holders are entitled to receive payment in cash.

The Company classifies the CVR as a liability on its condensed consolidated balance sheet. The fair value of the CVR liability was determined using the probability weighted discounted cash flow method to estimate future cash flows associated with the sale of the legacy cell therapy assets, including the Bolt-on Chimeric Receptor (“BOXR”) technology and Autologous Cell Therapy Industrial Automation technology (collectively, the “BOXR Platform”), Antibody-Coupled T cell Receptor technology and other fixed assets based on assumptions at the date of the CVR issuance and each subsequent quarterly period end, less certain permitted deductions. For sales proceeds received by the Company prior to December 31, 2020, the number of common shares to be received by CVR holders was determined by dividing the proceeds received by the Company by the closing price of the Company’s common stock on July 6, 2020 of $8.80. The closing price of the Company’s common stock at each measurement date through February 2021 was used to determine the fair value of the share payments included in the CVR liability. The liability measured at the date of CVR issuance was recorded as a common stock dividend, returning capital to the legacy stockholders of record as of the close of business on July 6, 2020. Changes in fair value of the liability are recognized as a component of Other income (expense) in the condensed consolidated statement of operations and comprehensive loss. The CVR liability was valued based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. On August 28, 2020, the Company sold the BOXR Platform and subsequently sold additional fixed assets, triggering a payment to CVR holders. In November 2020, the Company issued 707,938 shares of common

stock in partial settlement of the CVR liability. In February 2021, the Company issued an additional 212,429 shares of common stock and paid $0.1 million in partial settlement of the CVR liability. Any settlement of the remaining CVR liability will be a cash settlement.

The following table sets forth a summary of the changes in the fair value of the Company’s CVR liability (in thousands):


Balance at December 31, 2020	$	5,531
Change in fair value		(343	)
CVR settlement		(2,128	)
Balance at December 31, 2021	$	3,060
Change in fair value		—
CVR settlement		—
Balance at September 30, 2022	$	3,060

During the three and nine months ended ~~March 31, 2018~~September 30, 2022 and ~~2017,~~2021, there were no transfers between Level 1, Level 2 and Level 3.

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following ~~(in~~(in thousands):


	March 31, 2018		December 31, 2017		September 30, 2022		December 31, 2021
Accrued employee compensation and benefits	$	357	$	1,315	$	4,069	$	3,389
Accrued professional fees		964		980
Accrued external research and development expense		806		478		4,860		1,953
Accrued other		231		180

	$	2,358	$	2,953

Accrued external manufacturing costs						1,536		1,556
Accrued professional and consulting services						2,722		1,077
Other						1,197		235
Total					$	14,384	$	8,210

5. ~~Collaboration Agreement~~Preferred Stock, Series A Non-Voting Convertible Preferred Stock and Common Stock

The ~~Company has a collaboration agreement with Seattle Genetics, entered into in 2015, whereby the parties agreed to jointly develop two product candidates incorporating the~~ Company’s ACTR platform and Seattle Genetics’ antibodies. Under the collaboration agreement, the Company conducts preclinical research and clinical development activities related to the two specified product candidates through Phase I clinical development, and Seattle Genetics provides the funding for those activities. Under the collaboration agreement, the Company recognized revenue of $2.2 million and $1.8 million for the three months ended March 31, 2018 and 2017, respectively, related to research and clinical development activities performed. As of March 31, 2018 and December 31, 2017, deferred revenue of $21.2 million and $15.6 million, respectively, was recorded related to this agreement. As noted in Note 2 above, deferred revenue was increased by $6.2 million as of January 1, 2018 upon adoption of ASC 606. As of March 31, 2018, the aggregate amount of the transaction price allocated to the remaining performance obligation for preclinical research and clinical development activities related to the two specified product candidates through Phase I is estimated to be $76.0 million, which is expected to be recognized as revenue through December 31, 2022.

~~6. Loan and Security Agreement~~

In January 2017, the Company entered into a loan and security agreement (the “Loan Agreement”) with Pacific Western Bank (“PWB”), which provides for term loan borrowings of up to $15.0 million through January 19, 2019. Borrowings under the Loan Agreement bear interest at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 3.75%, and are payable over an interest-only period until January 19, 2019, followed by a~~24-month~~ ~~period of equal monthly payments of principal and interest. All amounts outstanding as of the maturity date of January 19, 2021 become immediately due and payable.~~

~~In connection with the Loan Agreement, the Company agreed to enter into warrant agreements with PWB pursuant to which warrants will be issued to purchase a number of shares of the Company’s~~authorized capital stock ~~equal to 1%~~consists of ~~the amount of each term loan borrowing under the Loan Agreement, divided by the applicable exercise price.~~

No amounts have been borrowed as term loans under the Loan Agreement as of March 31, 2018. Borrowings under the Loan Agreement are collateralized by substantially all of the Company’s assets, except for its intellectual property. Under the Loan Agreement, the Company has agreed to affirmative and negative covenants to which it will remain subject until maturity. These covenants include limitations on the Company’s ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses. There are no financial covenants associated with the Loan Agreement. Events of default under the Loan Agreement include failure to make payments when due, insolvency events, failure to comply with covenants and material adverse effects with respect to the Company.

~~7. Redeemable Convertible Preferred Stock~~

The Company issued Series A redeemable convertible preferred stock (the “Series A preferred stock”) and Series B redeemable convertible preferred stock (the “Series B preferred stock”). The Series A preferred stock and the Series B preferred stock are collectively referred to as the “Preferred Stock”. The Preferred Stock converted to150,000,000 shares of common stock, onpar value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share, 1,000,000 of which are designated as Series A Preferred Stock and 9,000,000 of which shares of preferred stock are undesignated.

Series A Non-Voting Convertible Preferred Stock

On July 6, 2020, the Company filed a ~~1:1.5701314513884 basis upon the closing~~Certificate of Designation of Preferences, Rights and Limitations of the ~~IPO.~~

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~As of each balance sheet date, the~~Series A Non-Voting Convertible Preferred Stock ~~consisted~~(“Series A Preferred Stock”) with the Secretary of State of the ~~following (in thousands, except share amounts):~~

   As of March 31, 2018
   Preferred Stock
Authorized    Preferred
Stock Issued
and
Outstanding    Carrying Value    Liquidation
Preference    Common Stock
Issuable Upon
Conversion
Series A preferred stock
   12,297,276    12,297,276    $ 12,271    $ 12,297    7,832,001
Series B preferred stock
   8,494,131    8,474,574    64,896    65,000    5,397,361










   20,791,407    20,771,850    $ 77,167    $ 77,297    13,229,362










   As of December 31, 2017
   Preferred Stock
Authorized    Preferred
Stock Issued
and
Outstanding    Carrying Value    Liquidation
Preference    Common Stock
Issuable Upon
Conversion
Series A preferred stock
   12,297,276    12,297,276    $ 12,267    $ 12,297    7,832,001
Series B preferred stock
   8,494,131    8,474,574    64,884    65,000    5,397,361










   20,791,407    20,771,850    $ 77,151    $ 77,297    13,229,362

~~Prior to~~State of Delaware (the “Certificate of Designation”) in connection with the ~~closing~~Kiq Acquisition and the PIPE. The Certificate of Designation provides for the ~~IPO, the holders~~issuance of ~~the~~shares of Series A Preferred Stock, ~~had the following rights and preferences:~~par value $0.001 per share.

~~Voting~~

~~The holders~~Holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal, on an as-if-converted-to-common-stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the Series A Preferred Stock does not have voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, the Company will not, without the affirmative vote ~~together with~~of the holders of ~~common stock, on matters submitted to stockholders for~~ a ~~vote. The holders~~majority of the then outstanding shares of the Series A Preferred Stock, ~~are entitled~~(a) alter or change adversely the powers, preferences or rights given to the ~~number of votes equal to the number of common shares into which each such share of~~Series A Preferred Stock, ~~could convert. In addition,~~(b) alter or amend the Certificate of Designation, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A ~~preferred stock, voting exclusively and as a separate class, are entitled~~Preferred Stock, (d) increase the number of authorized shares of Series A Preferred Stock, (e) prior to ~~elect two directors~~the stockholder approval of the ~~Company.~~Conversion Proposal or at any time while at least 40% of the originally issued Series A Preferred Stock remains issued and outstanding, consummate a Fundamental Transaction (as defined in the Certificate of Designation) or (f) enter into any agreement with respect to any of the foregoing. The ~~holders~~Series A Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Each share of Series ~~B preferred stock, voting exclusively and as a separate class, are entitled to elect one director of the Company.~~

~~Conversion~~

~~Each share of~~A Preferred Stock is convertible at any time at the option of the holder ~~at any time after the date~~thereof, into 250 shares of ~~issuance. Each share~~common stock, subject to certain limitations, including that a holder of Series A Preferred Stock ~~will be automatically converted~~is prohibited from converting shares of Series A Preferred Stock into shares of common stock atif, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the applicable conversion ratio then in effect upon the closing of a firm commitment public offering with at least $50.0 million of gross proceeds to the Company. Shares of Series A preferred stock will be automatically converted into shares of common stock at the applicable conversion ratio then in effect upon written consentholder between 4.9% and 19.9%) of the holders of at least 65% of the then-outstanding shares of Series A preferred stock. Shares of Series B preferred stock will be automatically converted into shares of common stock at the applicable conversion ratio then in effect upon written consent of the holders of at least a majority of the then-outstanding shares of Series B preferred stock.

The conversion ratio of each series of Preferred Stock is determined by dividing the Original Issue Price of each series by the Conversion Price of each series. The Original Issue Price is $1.00 per share for Series A preferred stock and $7.67 per share for Series B preferred stock. The Conversion Price at issuance was $1.570131 per share for Series A preferred stock and $12.042908 per share for Series B preferred stock, subject to appropriate adjustment in the event of any stock split, stock dividend, combination or other similar recapitalization and other adjustments as set forth in the Company’s certificate of incorporation, as amended and restated.

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Dividends~~

The holders of Preferred Stock are entitled to receive noncumulative dividends if and when declared by the Company’s board of directors. The Company may not declare, pay or set aside any dividends on shares of any other series of capital stock of the Company, other than dividends on common stock payable in common stock, unless the holders of the Series A and Series B preferred stock first receive, or simultaneously receive, a dividend on each outstanding share of Series A and Series B preferred stock in an amount at least equal to the greater of (i) $0.08 per share in the case of Series A preferred stock and $0.61 per share in the case of Series B preferred stock, each subject to appropriate adjustment in the event of any stock split, stock dividend, combination or other similar recapitalization with respect to such shares, and (ii) (A) in the case of a dividend on common stock or any class or series of stock that is convertible into common stock, that dividend per share of Preferred Stock as would equal the product of (1) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into common stock and (2) thetotal number of shares of common stock issuable upon conversion of each share of Preferred Stock, or (B) in the case of a dividend on any class or series that is not convertible into common stock, at a rate per share of Preferred Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series of capital stock by the Original Issue Price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination of or other similar recapitalization affecting such shares)issued and (2) multiplying such fraction by an amount equal to the Original Issue Price of each series of Preferred Stock. If the Company declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock of the Company, the dividend payable to the holders of the Preferred Stock shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Preferred Stock dividend. Stockholders are not entitled to any accruing dividends. Through March 31, 2018 and December 31, 2017, no dividends were declared or paid.

~~Liquidation~~

~~In the event of any voluntary or involuntary liquidation, dissolution orwinding-up~~ of the Company or Liquidating Event (as described below), the holders of shares of Preferred Stock will receive, in preference to the common stockholders, an amount equal to the greater of (i) the Original Issue Price per share of the respective share of Preferred Stock, plus all dividends declared but unpaid on such shares, or (ii) the amount the holders would receive if the Preferred Stock were converted into common stock prioroutstanding immediately after giving effect to such liquidation event. In the event that the assets available for distribution to the Company’s stockholders are not sufficient to permit payment to the holders of Preferred Stock in the full amount to which they are entitled, the assets available for distribution will be distributed on a pro rata basis among the holders of the Series A and Series B preferred stock. After the payment of all preferential amounts to the holders of the Preferred Stock then, to the extent available, the remaining assets available for distribution shall be distributed among the holders of the common stock ratably based on the number of shares of common stock held by each holder.

~~Unless the holders of at leasttwo-thirds~~ ~~of the then-outstanding shares of Preferred Stock, voting together as a single class on anas-converted~~ basis, elect otherwise, a Liquidating Event shall include a merger or consolidation (other than one in which stockholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring corporation) or a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company.

~~Redemption~~

At any time on or after June 10, 2020, shares of each of the Series A and Series B preferred stock are subject to mandatory redemption by the Company in three equal annual installments beginning 60 days after receipt of a notice of redemption from the holders of at least~~two-thirds~~ ~~of the combined voting power of the holders of outstanding~~conversion. Cumulatively, through September 30, 2022, 82,275 shares of Series A ~~and~~Preferred Stock, or 50.4% of the issued Series BA Preferred Stock, have been converted into 20,568,750 shares of common stock. The 81,050 shares of Series A Preferred Stock outstanding as of September 30, 2022 are convertible into 20,262,500 shares of common stock.

No other classes of preferred stock ~~voting together~~have been designated and no other preferred shares have been issued or are outstanding as ~~a single class, in an amount equal to the Original Issue Price per share~~ of ~~each series of Preferred Stock plus any dividends declared but unpaid thereon.~~September 30, 2022.

8. Common Stock

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are not entitled to receive dividends, unless declared by the board of directors. In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock. The shares to be issued by us in this offering will be, when issued and paid for, validly issued, fully paid and non-assessable.

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~9. Stock-Based Compensation~~

~~2015 Stock Incentive Plan~~

On February 8, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC. The ~~Company’s 2015 Stock Incentive Plan (the “2015 Plan”) provides for~~shelf registration statement allows the Company to ~~grant incentive~~sell from time-to-time up to $200.0 million of common stock, ~~options~~preferred stock, debt securities, warrants or ~~nonqualified stock options, restricted stock, restricted stock~~ units ~~and other equity awards to employees, directors and consultants~~comprised of ~~the Company. The 2015 Plan is administered by the board~~any combination of ~~directors or, at the discretion of the board of directors, by a committee of the board of directors. The board of directors may also delegate to~~these securities, for its own account in one or more ~~officers~~offerings. The terms of any offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering. On May 6, 2022, the Company filed an Amendment to its February 8, 2021 S-3 Registration Statement to terminate the effectiveness of the registration statement and to remove from registration all securities registered but not sold under the registration statement.

Additionally, on February 8, 2021, pursuant to the Form S-3, the Company entered into a Sales Agreement (the “SVB Sales Agreement”) with SVB Leerink LLC (“SVB Leerink”), pursuant to which the ~~power~~Company may issue and sell, from time to ~~grant awards~~time, shares of its common stock having an aggregate offering price of up to ~~employees~~$75.0 million through SVB Leerink as the sales agent. Cumulatively, the Company has sold 3,954,900 shares of common stock under the SVB Sales Agreement with offering prices ranging between $9.25 and ~~certain officers~~$10.30 per share for net proceeds of approximately $38.0 million. The Company terminated the existing SVB Sales Agreement, effective as of May 5, 2022. The Company did not incur any termination penalties as a result of the ~~Company.~~termination of the SVB Sales Agreement. No shares were sold under the SVB Sales Agreement.

On May 6, 2022, the Company filed a shelf registration statement on Form S-3 with the SEC. The ~~exercise prices, vesting and other restrictions are determined~~shelf registration statement allows the Company to sell from time-to-time up to $300.0 million of common stock, preferred stock, debt securities, warrants or units comprised of any combination of these securities, for its own account in one or more offerings. The terms of any offering under the shelf registration statement will be established at the ~~discretion~~time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

Additionally, on May 6, 2022, pursuant to the Form S-3, the Company entered into a Sales Agreement (the “Sales Agreement”) with Guggenheim Securities, LLC (“Guggenheim Securities”), pursuant to which the Company may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $75.0 million through Guggenheim Securities, as the sales agent. As of September 30, 2022, no shares have been sold under the Sales Agreement.

On June 13, 2022, the Company completed an underwritten public offering of 17,899,698 shares of its common stock at a public offering price of $8.25 per share (including the exercise in full by the underwriters of their 30-day option to purchase up to 2,730,000 additional shares of common stock) and, in lieu of common stock to certain investors, pre-funded warrants to purchase 3,030,302 shares of its common stock at a purchase price of $8.24 per underlying share. The net proceeds from the offering were approximately $161.9 million, after deducting the underwriting discounts and commissions of $10.4 million and offering expenses of $0.4 million.

Each pre-funded warrant entitles the holder to purchase shares of common stock at an exercise price of $0.01 per share and is exercisable at any time beginning on the date of issuance. These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. Per the terms of the ~~board~~warrant agreement, a holder of ~~directors, or its committee~~the outstanding warrant is not entitled to exercise any portion of the pre-funded warrant if, ~~so delegated. Stock options granted under~~upon giving effect to such exercise, would cause the ~~2015 Plan with service-based vesting conditions generally vest over four years and expire after ten years.~~

~~The total~~aggregate number of shares of common stock ~~that may~~beneficially owned by such holder (together with its affiliates and any other person whose beneficial ownership of common stock would be aggregated with the holder) to exceed 9.99% of the total number of then issued and outstanding shares of common stock, as such percentage ownership is determined in accordance with the terms of the pre-funded warrant and subject to such holder’s rights under the ~~2015~~pre-funded warrant to increase or decrease such percentage to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from such holder. As of September 30, 2022, 2,424,242 pre-funded warrants have been exercised.

6. Stock-Based Compensation

2018 Stock Option and Incentive Plan ~~was 4,144,876 shares as of March 31, 2018. Upon effectiveness of the~~

The Company’s 2018 Stock Option and Incentive Plan, ~~the (“2018~~(the “2018 Plan”) in March 2018, the remaining 1,041,700 shares available under the 2015 Plan became available for issuance under the 2018 Plan and no future issuance will be made under the 2015 Plan. Additionally, outstanding options under the 2015 Plan that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan.

The exercise price for stock options granted is not less than the fair value of common shares as determined by the board of directors as of the date of grant. The Company’s board of directors values the Company’s common stock, taking into consideration its most recently available valuation of common stock performed by third parties as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant.

~~2018 Stock Option and Incentive Plan~~

~~On March 16, 2018, the Company’s stockholders approved the 2018 Plan,~~, which became effective on March 27, ~~2018. The~~ 2018, ~~Plan~~ provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights. The number of shares initially reserved for issuance under the 2018 Plan ~~is 2,800,721 plus~~was 700,180. Additionally, the ~~1,041,700~~ shares of common stock ~~remaining~~that remained available for issuance under the previously outstanding 2015 Stock Incentive Plan (the “2015 Plan”) became available under the 2018 Plan. The number of shares reserved ~~shall be cumulatively increased~~for the 2018 Plan automatically increases on ~~January 1, 2019 and~~ each January 1 ~~thereafter~~ by 4%4% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or a lesser number of shares determined by the Company’s board of directors. The number of authorized shares reserved for issuance under the 2018 Plan was increased by 1,752,237 shares effective as of January 1, 2022. The shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2018 Plan or the 2015 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

On June 16, 2021, at the Company’s 2021 annual stockholder meeting, the Company’s stockholders approved the amendment and restatement of the 2018 Stock Plan to increase the number of shares of common stock issuable under the 2018 Plan by 6,000,000 shares. Upon stockholder approval, in accordance with ASC 718- Compensation- Stock Compensation, a grant date was established for accounting purposes with respect to 3,402,768 options previously granted to employees and non-employee directors during the year ended December 31, 2021, which were subject to stockholder approval of the amendment and restatement of the 2018 Plan.

As of ~~March 31, 2018, 3,065,350~~September 30, 2022, 1,034,467 shares ~~remained~~of common stock remain available for ~~future~~ issuance under the 2018 Plan.

Inducement Plan

On October 22, 2020, the board of directors adopted the Cogent Biosciences, Inc. 2020 Inducement Plan (the “Inducement Plan”). The board of directors also adopted a form of non-qualified stock option agreement for use with the Inducement Plan. A total of 3,750,000 shares of common stock have been reserved for issuance under the Inducement Plan, subject to adjustment for stock dividends, stock splits, or other changes in Cogent’s common stock or capital structure. On November 5, 2020, the Company filed a Registration Statement on Form S-8 related to the 3,750,000 shares of its common stock reserved for issuance under the Inducement Plan. As of September 30, 2022, 728,995 shares of common stock remain available for issuance under the Inducement Plan.

2018 Employee Stock Purchase Plan

~~On March 16, 2018, the~~The Company’s ~~stockholders approved the~~ 2018 Employee Stock Purchase Plan (the “ESPP”)~~, which~~ became effective on March 28, ~~2018. A~~2018, at which time a total of ~~314,000~~78,500 shares of common stock were reserved for ~~issuance under this plan.~~issuance. In addition, the number of shares of common stock that may be issued under the ESPP ~~will~~ automatically ~~increase~~increases on ~~January 1, 2019, and~~ each January 1 ~~thereafter~~ through January 1, 2027, by the least of (i) ~~500,000~~125,000 shares of common stock, (ii) 1%1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or (iii) such lesser number of shares as determined by the ESPP administrator.

~~Stock Option Issuances~~

~~During~~ The number of authorized shares reserved for issuance under the ~~three months ended March 31, 2018, the Company granted options~~ESPP was increased by 125,000 shares effective as of January 1, 2022. In January 2022, 18,995 shares were issued to employees ~~consultants and directors~~under the ESPP. In July 2022, 30,005 shares were issued to employees under the ESPP. As of September 30, 2022, 412,919 shares remain available for issuance under the ~~purchase of 777,071 shares of common stock with exercise prices of $12.00 per share and a weighted average grant-date fair value of $6.28 per share.~~ESPP.

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Stock-Based Compensation

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss ~~(in~~(in thousands):


	Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2022		2021		2022		2021
Research and development expenses	$	401	$	260	$	2,049	$	1,436	$	6,080	$	2,650
General and administrative expenses		78		40		2,573		2,027		7,251		5,184

Total	$	479	$	300	$	4,622	$	3,463	$	13,331	$	7,834

As of ~~March 31, 2018,~~September 30, 2022, total unrecognized compensation cost related to the unvested stock-based ~~awards~~options was ~~$9.8~~$49.0 million, which is expected to be recognized over a weighted average period of ~~3.0~~2.74 years.

7. Commitments and Contingencies

~~10. Income Taxes~~Operating Leases

~~2017 U.S. Tax Reform~~Corporate Headquarters- Waltham, MA

On ~~December 22, 2017,~~March 19, 2022, the ~~Tax Cuts~~Company and ~~Jobs Act~~Cimpress USA Incorporated (the ~~“TCJA”~~“Cimpress”) ~~was signed~~entered into ~~United States law.~~a sublease agreement (the “Waltham Sublease”) pursuant to which the Company subleases approximately 17,749 square feet of office space in Waltham, MA, which serves as the Company’s corporate headquarters. The ~~TCJA includes~~Waltham Sublease became effective on May 5, 2022.

The Waltham Sublease has a ~~number~~term of ~~changes~~four years and four months, commencing June 1, 2022 and expiring September 30, 2026. The Company will pay Cimpress base rent at an initial rate of $42.50 per square foot per year. Rent will be payable in equal monthly installments and subject to ~~existing tax law, including, among other things,~~$1.00 per square foot annual increases over the term. Additionally, the Company is responsible for reimbursing Cimpress for the Company’s share of the building’s property taxes and operating expenses. In connection with the Waltham Sublease, the Company provided a ~~permanent reduction~~cash security deposit to the landlord in an amount of $0.4 million which is recorded in Other Assets in the ~~federal corporate income tax rate from 34% to 21%, effective~~condensed consolidated balance sheet as of ~~January 1, 2018,~~September 30, 2022.

The lease commencement date occurred in May 2022, following landlord consent, as the Company gained access to the space under the terms of the lease. The Company has recorded a right-of-use asset and lease liability for this lease component of $2.9 million at the lease commencement date.

Research Facility- Boulder, CO

On July 6, 2021, the Company entered into a lease agreement (the “Original Lease”) pursuant to which the Company leases approximately 38,075 square feet (the “Initial Premises”) in Boulder, CO, which will include office and laboratory space. Subsequently, on March 29, 2022, the Company entered into the First Amendment to the lease agreement (the “First Amendment” and together with the Original Lease, the “Boulder Lease”) pursuant to which the Company leases approximately 6,582 square feet of additional office space on the second floor (the “Expansion Premises”).

Per the terms of the Original Lease, the landlord will contribute an aggregate of approximately $6.9 million toward the cost of landlord assets (the “Improvements”), as well as ~~limitation~~an additional amount of up to approximately $2.3 million in the form of a tenant improvement loan at an annual interest rate of 6%. Any monies borrowed under the tenant improvement loan are required to be repaid over the Boulder Lease term. Additionally, under the terms of the ~~deduction for net operating losses to 80%~~First Amendment, the landlord will provide an additional tenant improvement allowance (the “Additional Allowance”) of ~~annual taxable income and elimination~~$0.6 million, of ~~net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may~~which $0.3 million will be ~~carried forward indefinitely). The tax rate change resulted in (i) a reduction~~used in the ~~gross~~Initial Premises toward the cost of landlord assets. The remaining $0.3 million Additional Allowance is to be used for work to be performed in the Expansion Premises for the construction of lessee assets. The Company incurred net construction costs of approximately $7.0 million for the development of the Initial Premises at the Boulder location.

The Boulder Lease has an initial term of 12 years with the option to extend for three successive five-year terms.Boulder Lease payments will begin in June 2023 after an initial free rent period. Rent will be payable in equal monthly installments and subject to annual increases over the term. Additionally, the Company is responsible for reimbursing the landlord for its share of the building’s property taxes and operating expenses. The Boulder Lease is an operating lease. In connection with the Boulder Lease, the Company provided a cash security deposit to the landlord in an amount of $0.7 million which is recorded in Other Assets in the ~~Company’s deferred tax assets recorded~~condensed consolidated balance sheet as of ~~December 31, 2017, without an impact on~~September 30, 2022.

The Company has recorded the ~~net amount~~initial right-of-use assets and lease liabilities for the lease components of ~~its deferred tax assets, which are recorded with a full valuation allowance, and (ii) no income tax expense or benefit being recognized~~$22.3 million as of the ~~enactment date of the TCJA.~~lease commencement dates.

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, the Company considers the accounting for the effect of the TCJA to be provisional in accordance with SAB 118 at March 31, 2018.Former Corporate Headquarters- Cambridge, MA

~~Income Taxes~~

During the three months ended March 31, 2018 and 2017, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each year due to its uncertainty of realizing a benefit from those items. The Company has provided a valuation allowance for the full amounts of its net deferred tax assets because, at March 31, 2018 and December 31, 2017, it was more likely than not that any future benefit from deductible temporary differences and net operating loss and tax credit carryforwards would not be realized.

As of March 31, 2018 and December 31, 2017, the Company had not recorded any amounts for unrecognized tax benefits. The Company files income tax returns in the U.S. and Massachusetts. The statute of limitations for assessment by the Internal Revenue Service and Massachusetts tax authorities remains open for all years since 2014. No federal or state tax audits are currently in process.

~~11. Commitments and Contingencies~~

~~Operating Leases~~

The Company leases ~~its facility~~office and laboratory space in Cambridge, MA under anon-cancelable operating lease (the “Cambridge Lease”) that expires in April ~~2023.~~2023.

In August 2020, the Company entered into a sublease (the “Cambridge Sublease Agreement”) for a significant portion of the leased premises for the remaining term of the lease. Under the terms of the Cambridge Sublease Agreement, the sublessee leased approximately 70% of the facility and is responsible for the corresponding percentage of operating lease costs and variable lease costs. Variable lease costs include common area maintenance and other operating charges.

The Company recorded a right-of-use impairment charge of $0.4 million during the three and nine months ended September 30, 2022, following the move of the Corporate Headquarters from Cambridge, MA to Waltham, MA.

The elements of the lease expense, net of sublease income, were as follows (in thousands):


	Nine Months Ended September 30, 2022
Lease cost
Operating lease cost	$	7,286
Variable lease cost (1)		736
Sublease Income		(1,962	)
Total lease cost	$	6,060

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	8,022
Weighted average remaining lease term		10.70
Weighted average discount rate		8.07	%

(1)

The variable lease costs for the nine months ended September 30, 2022 include common area maintenance and other operating charges.

Future minimum lease payments under the Cambridge and Boulder operating leases commenced as of September 30, 2022 are as follows (in thousands):


Year Ending December 31,
2022 (remaining 3 months)		2,510
2023		2,544
2024		2,780
2025		2,841
2026		2,697
Thereafter		19,678
Total future minimum lease payments		33,050
Less: imputed interest		12,706
Less: tenant improvement allowance receivable		263
Total operating lease liability	$	20,081
Included in the condensed consolidated balance sheet:
Current operating lease liability	$	2,014
Operating lease liability, net of current portion		18,067
Total operating lease liability	$	20,081

Under the terms of the Cambridge Lease, the Company ~~secured~~issued a ~~$1.3~~$1.3 million letter of credit to the landlord as ~~security~~collateral for ~~its~~the leased facility. The underlying

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

cash ~~securing~~collateralizing this letter of credit has been classified as~~non-current~~ current restricted cash in the accompanying condensed consolidated balance sheets. ~~The~~This is a refundable deposit and not a lease ~~includes annual rent escalations, which are accrued, such that rent expense is recognized on a straight-line basis over~~payment. Under the terms of ~~occupancy.~~

~~The following table summarizes~~ the ~~future minimum payments due under~~Cambridge Sublease Agreement, the ~~operating leases as~~sublessee obtained a letter of ~~March 31, 2018 (in thousands):~~

Year Ending December 31,

2018 (nine months ending December 31)
   $ 1,378
2019
   1,878
2020
   1,933
2021
   1,989
2022
   2,046
Thereafter
   689


   $ 9,913

~~Rent expense~~credit for $1.3 million for the ~~three months ended March 31, 2018 and 2017 was $0.4 million and $0.4 million, respectively.~~benefit of the Company. This has been excluded from the undiscounted cash flows above.

License Agreements

Plexxikon License Agreement

In ~~January 2017,~~July 2020, the Company ~~entered into a12-month~~ ~~sublease agreement with a tenant for up~~obtained an exclusive, sublicensable, worldwide license (the “License Agreement”) to ~~2,500 square feet~~certain patents and other intellectual property rights to research, develop and commercialize bezuclastinib. Under the terms of ~~general office and laboratory space at its headquarters. In December 2017,~~ the ~~Company entered into a new12-month~~ sublease agreement with a tenant for approximately 5,000 square feet of general office and laboratory space at its headquarters. The Company recognized $0.2 million and less than $0.1 million received under the subleases as other income in the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2017, respectively.

License Agreement,

~~Under its license agreement with National University of Singapore and St. Jude Children’s Research Hospital, Inc. (collectively the “Licensors”) entered into in 2014,~~ the Company is ~~obligated~~required to pay ~~license maintenance fees on each anniversary~~Plexxikon Inc. (“Plexxikon”) aggregate payments of up to $7.5 million upon the satisfaction of certain clinical milestones and up to $25.0 million upon the satisfaction of certain regulatory milestones. During the second quarter of 2022, as a result of the ~~effective date~~Company’s review of the ~~agreement that escalate from less than $0.1 million for each~~progression of the Peak study and discussions with Plexxikon, the first ~~seven years~~clinical milestone was deemed to ~~$0.1~~have been achieved, resulting in payment of $2.5 million ~~on the eighth anniversary and each year thereafter.~~ to Plexxikon in June 2022. As of September 30, 2022, no other milestone payments have been made or accrued.

The Company is also ~~obligated~~required to make aggregate milestone payments of up to 5.5 million Singapore dollars (equivalent to approximately $4.2 million as of March 31, 2018) upon the achievement of specified clinical and regulatory milestones and to pay Plexxikon tiered royalties ranging ~~in the low single-digit percentages~~from a low-single digit percentage to a high-single digit percentage on annual net sales of products. These royalty obligations last on a product-by-product basis and country-by-country basis until the latest of (i) the date on which there is no validate claim of a licensed ~~products sold by~~Plexxikon patent covering a subject product in such country or (ii) the 10th anniversary of the date of the first commercial sale of the product in such country. In addition, if the Company ~~or its sublicensees. The royalties are payable on aproduct-by-product~~ ~~andcountry-by-country~~ ~~basis, and may be reduced in specified circumstances. Additionally,~~sublicenses the rights under ~~certain circumstances,~~the License Agreement, the Company is ~~obligated~~required to pay ~~the Licensors~~ a certain percentage of ~~amounts received~~the sublicense revenue to Plexxikon ranging from ~~sublicensees.~~mid-double digit percentages to mid-single digit percentages, depending on whether the sublicense is entered into prior to or after certain clinical trial events.

The license agreement will expire on acountry-by-country and licensed product-by-licensed product basis until the later of the last to expire of the patents ~~and patent applications~~ covering such licensed products or services or the 10-year anniversary of the date of first commercial sale of the licensed product ~~or service.~~in such country. The ~~Licensors~~Company may terminate the license agreement within 6030 days after written notice in the event of a ~~breach of contract.~~material breach. The ~~Licensors~~Company may also terminate the agreement upon written notice in the event of the Company’s bankruptcy, liquidation or insolvency. In addition, the Company has the right to terminate this agreement in its entirety at will upon 90 days’ advance written notice to the Licensors. However, if the Company has commenced the commercialization of licensed products, the Company can only terminate at will if it ceases all development and commercialization of licensed products.Plexxikon.

~~Manufacturing Commitment~~

~~As of March 31, 2018, the Company hadnon-cancelable~~ ~~minimum purchase commitments under contract manufacturing agreements for payments totaling $0.9 million over the following 12 months.~~

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company ~~does~~is not ~~believe that the outcome~~aware of any claims under indemnification arrangements that will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of ~~March 31, 2018~~September 30, 2022 or its consolidated financial statements as of December 31, ~~2017.~~2021.

Legal Proceedings

The Company is not currently party to any material legal proceedings. At each reporting date, the Company evaluates whether or not 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. The Company expenses as incurred the costs related to such legal proceedings.

8. Net Loss Per Share

Basic and diluted net loss per ~~share attributable to~~ common ~~stockholders~~share was calculated as follows ~~(in~~(in thousands, except share and per share amounts):


	Three Months Ended March 31,						Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2022			2021			2022			2021
Numerator:
Net loss	$	(6,735	)	$	(5,939	)	$	(35,062	)	$	(19,084	)	$	(100,623	)	$	(47,361	)
Accretion of redeemable convertible preferred stock to redemption value		(16	)		(16	)

Net loss attributable to common stockholders	$	(6,751	)	$	(5,955	)	$	(35,062	)	$	(19,084	)	$	(100,623	)	$	(47,361	)

Denominator:
Weighted average common shares outstanding, basic and diluted		10,204,591			10,190,228			69,576,359			39,848,943			54,780,041			37,741,526

Net loss per share attributable to common stockholders, basic and diluted	$	(0.66	)	$	(0.58	)

Net loss per common share, basic and diluted							$	(0.50	)	$	(0.48	)	$	(1.84	)	$	(1.25	)

~~UNUM THERAPEUTICS INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive and would result in a reduction to ~~reduce the~~ net loss per share. ~~Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.~~ The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated above because including them would have had an anti-dilutive effect:


	March 31,				September 30,
	2018		2017		2022		2021
Redeemable convertible preferred shares (as converted to common stock)		13,229,362		13,229,362
Stock options to purchase common stock		3,873,879		2,549,808		12,471,244		8,156,538
Series A Preferred Stock						20,262,500		25,822,250
						32,733,744		33,978,788
		17,103,241		15,779,170

~~13.~~

In accordance with ASC Topic 260, Earnings Per Share, the outstanding pre-funded warrants are included in the computation of basic and diluted net loss per share because the exercise price is negligible ($0.01 per share) and they are fully vested and exercisable at any time after the original issuance date.

The Company has 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 apre-tax basis. ~~As currently established, the Company is not required to make and to date has not made any contributions to the~~The 401(k) ~~Plan. The Company did not make any~~Plan allows for discretionary matching contributions ~~during~~of 100% of the first 4% of elective contributions, which vest immediately. Contributions under the plan were approximately $0.1 million and $0.5 million for the three and nine months ended ~~March 31, 2018 or 2017.~~

~~14. Subsequent Events~~

On April 3, 2018, the Company completed an IPO of its common stock, and issued and sold 5,770,000 shares of common stock at a public offering price of $12.00 per share, resulting in net proceeds of $64.4 million after deducting underwriting discounts and commissions but before deducting offering costs.

On April 3, 2018, concurrent with the IPO, the Company completed the sale of $5.0 million of shares of common stock at the public offering price of $12.00 per share, or 416,666 shares, to Seattle Genetics in a concurrent private placement. These shares are not registeredSeptember 30, 2022, respectively. Contributions under the ~~Securities Act~~plan were approximately $0.1 million and $0.3 million for the three and nine months ended September 30, 2021, respectively.

Item 2. Management’s Discussion and Analysis of ~~1933, as amended,~~Financial Condition and ~~are subject to a180-daylock-up~~ ~~agreement with the underwriters~~Results of the IPO. The concurrent private placement was subject to certain closing conditions. The Company received the full proceeds from the sale and did not pay any underwriting discounts or commissions with respect to the shares of common stock that were sold in the concurrent private placement.Operations.

Upon closing of the IPO on April 3, 2018, the Company’s outstanding redeemable convertible preferred stock automatically converted into shares of common stock (see Note 7). Upon conversion of the redeemable convertible preferred stock, the Company reclassified the carrying value of the Preferred Stock to common stock and additional~~paid-in~~ ~~capital.~~

On April 25, 2018, in connection with the IPO, the Company issued and sold an additional 215,000 shares of its common stock at the IPO price of $12.00 per share, less underwriting discounts and commissions, pursuant to the underwriters’ partial exercise of their option to purchase additional shares of common stock, resulting in additional net proceeds to the Company of approximately $2.4 million after deducting underwriting discounts and commissions.

~~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 should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report onForm 10-Q and our final prospectus for our initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, or the Securities Act, with the Securities and Exchange Commission, or SEC,Annual Report on ~~March 29, 2018.~~Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. AsOur actual results may differ materially from those anticipated in these forward-looking statements as a result of ~~many~~certain factors, including but not limited to those ~~factors~~ set forth inunder the caption “Risk Factors” ~~section of~~in this Quarterly Report on Form~~10-Q,~~ ~~our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.~~ 10-Q.

We are a ~~clinical-stage biopharmaceutical~~biotechnology company focused on developing precision therapies for genetically defined diseases. Our approach is to design rational precision therapies that treat the underlying cause of disease and improve the lives of patients. Our lead drug candidate, bezuclastinib, is designed to target exon 17 mutations found within the KIT receptor tyrosine kinase, including KIT D816V. When KIT D816V remains in a perpetual ‘on’ state it causes mast cells, a type of white blood cell, to accumulate in various internal organs including the bone marrow. The result is an orphan disease called Systemic Mastocytosis (“SM”). Exon 17 mutations have also been found in advanced Gastrointestinal Stromal Tumors (“GIST”), which have a strong dependence on oncogenic KIT signaling. Bezuclastinib is a highly selective and potent KIT inhibitor with the potential to provide a powerful new treatment option for patients with both of these diseases. In addition to bezuclastinib, the Cogent Research Team is developing a portfolio of novel targeted therapies to help patients fighting serious, genetically driven diseases initially targeting FGFR2 and ErbB2.

Bezuclastinib is a selective tyrosine kinase inhibitor that is designed to potently inhibit the KIT D816V mutation as well as other mutations in KIT exon 17. KIT D816V is responsible for driving systemic mastocytosis, a serious disease caused by unchecked proliferation of mast cells. Exon 17 mutations are also found in patients with GIST, a type of cancer with strong dependence on oncogenic KIT signaling

We are pursuing the development of bezuclastinib in patients living with GIST based on our study of more than 50 advanced solid tumor and ~~commercialization~~GIST patients in a Phase 1/2 clinical trial, with the vast majority of ~~novel immunotherapy products designed to harness the power of a patient’s immune system to cure cancer. Our proprietary technology, called antibody-coupled T cell receptor (ACTR),~~those patients living with advanced GIST. GIST is a ~~universal, engineered cell therapy that~~disease frequently driven by KIT mutations, and resistance to currently available therapeutics is ~~intended to be used~~frequently associated with the emergence of other KIT mutations. Anti-tumor activity for bezuclastinib was observed in both single agent and combination settings, including in combination with sunitinib, an approved treatment option for GIST patients. Clinical data from this trial have been published in the Journal of American Medical Association and have been presented at several scientific conferences, including most recently by Cogent at the 2020 annual Connective Tissue Oncology Society (“CTOS”) meeting, and previously by Plexxikon Inc. (“Plexxikon”), a ~~wide range~~member of ~~tumor-specific antibodies~~the Daiichi Sankyo Group, at the 2018 annual American Society of Clinical Oncology meeting and the 2017 annual CTOS meeting. Within the group of 15 heavily pre-treated GIST patients who received the combination of bezuclastinib and sunitinib, and who had not received prior treatment with bezuclastinib, the confirmed objective response rate was twenty percent, including two partial responses and one complete response, while the estimated median progression free survival (“mPFS”) for this group was twelve months. Four subjects continued to ~~target different~~receive bezuclastinib via individual patient INDs beyond the conclusion of the trial. In October 2021, we presented preclinical data in a virtual poster at the 2021 AACR-NCI-EORTC Virtual International Conference on Molecular Targets and Cancer Therapeutics that identified bezuclastinib as a differentiated, potent and selective KIT mutant inhibitor with unique selectivity for KIT D816V and minimal evidence of brain penetration that avoids targeting PDGFR isoforms. In April 2022, we presented additional preclinical data at the 2022 American Associated for Cancer Research annual meeting (“AACR”) demonstrating that bezuclastinib potently inhibits A loop-mutations exquisitely selective against other closely related kinases, and differentiates bezuclastinib by its lack of brain penetration. These data support that bezuclastinib inhibits KIT downstream signaling and may drive tumor ~~types. Our product candidates~~regressions at clinically achievable doses.

We are ~~composed~~continuing the development bezuclastinib in GIST in our PEAK study. PEAK is our randomized open-label, global Phase 3 clinical trial designed to evaluate the safety, tolerability, and efficacy of ~~ACTR T cellsco-administered~~bezuclastinib in combination with sunitinib compared to sunitinib alone in patients with locally advanced, unresectable or metastatic GIST who have received prior treatment with imatinib. The FDA has granted orphan drug designation to bezuclastinib for the treatment of GIST.

In November 2021, through a partnership with Serán Biosciences, we announced the development of an optimized formulation of bezuclastinib, which was used in the PEAK lead-in study. Based on the data from the PEAK lead-in study we have initiated the randomized portion of PEAK using a 600 mg dose of a new formulation of bezuclastinib, which in the lead-in portion of the study demonstrated clinical exposure equivalent to the 1,000 mg original formulation used in our GIST Phase 1/2 clinical trial. Initial safety and pharmacokinetic data from the PEAK lead-in study will be presented at the CTOS annual meeting in November 2022. We expect to present initial efficacy data from the PEAK lead-in study in the first half of 2023.

Along with the development of bezuclastinib in GIST, we are continuing the development of bezuclastinib in patients living with Advanced Systemic Mastocytosis (“AdvSM”) and Non-Advanced Systemic Mastocytosis (“Non-AdvSM”). The vast majority of AdvSM and Non-AdvSM patients have a KIT D816V mutation. Patients with AdvSM have a significantly diminished lifespan with a median survival of less than 3.5 years. For patients with Non-AdvSM, there are no available approved therapies, and ~~commercially available antibodies~~while their lifespan is not impacted by the disease, these patients suffer from a poor quality of life and new treatment options are badly needed.

APEX is our global, open-label, multi-center, Phase 2 clinical trial in patients with AdvSM evaluating the safety, efficacy, pharmacokinetic, and pharmacodynamic profiles of bezuclastinib. In June 2022, we reported positive initial clinical data from the ongoing APEX trial at the 2022 European Hematology Association Annual Congress. As of the data cutoff date of May 24, 2022, 11 out of 11 patients treated with bezuclastinib achieved at least a 50% reduction in serum tryptase, with a median reduction of 89%, regardless of prior KIT D816V inhibitor treatment; 8 of 8 bone marrow biopsy-assessed patients achieved at least a 50% bone marrow mast cell reduction and decreases in blood KIT D816V variant allele fraction. Bezuclastinib was generally well-tolerated at all doses and all patients remained on study. We believe that this early data demonstrates a favorable initial safety and tolerability profile with no reported periorbital or ~~antibodies~~peripheral edema, cognitive effects or intracranial bleeding events. The majority of adverse events were Grade 1/2 and seen in ~~preclinical~~no more than one patient with one serious adverse event and no Grade 4 events reported. We plan to present updated APEX clinical data in an oral presentation at the American Society of Hematology Annual Meeting in December 2022.

SUMMIT is our randomized, double-blind, placebo-controlled, global multi-center Phase 2 clinical trial for patients with Non-AdvSM. The study is designed to evaluate the safety and efficacy of bezuclastinib in patients with moderate to severe Indolent Systemic Mastocytosis or Smoldering Systemic Mastocytosis. Based on the performance of bezuclastinib’s new formulation in the PEAK lead-in trial, as well as in a healthy normal volunteer study, the SUMMIT trial protocol will be amended to allow for the new formulation to be introduced during the dose exploration phase. We expect to report initial data from the SUMMIT trial in the second half of 2023.

Worldwide rights to develop and commercialize bezuclastinib are exclusively licensed from Plexxikon. Under the terms of the license agreement, Plexxikon received an upfront payment and is eligible for additional development milestones of up to $7.5 million upon the satisfaction of certain clinical ~~development. Our vision~~milestones and up to $25.0 million upon the satisfaction of certain regulatory milestones. In April 2022, as a result of our review of the progression of the Peak study and discussions with Plexxikon, the first clinical milestone was deemed to have been achieved, triggering a payment of $2.5 million to Plexxikon in Q2 2022.

Patents protecting bezuclastinib include composition of matter claims which have been issued in the US and other key territories and provide exclusivity through 2033 and potentially beyond through patent term extensions. In addition, we intend to file a provisional patent application seeking to protect our new formulation of bezuclastinib, which could potentially provide exclusivity through at least 2043.

During the second quarter of 2021, we announced the formation of the Cogent Research Team, a highly experienced discovery and research group. Based in Boulder, Colorado, the Cogent Research Team is focused on pioneering best-in-class, small molecule therapeutics to ~~use~~expand our ~~ACTR platform to transform cancer treatment~~pipeline and deliver ~~patient cures~~novel precision therapies for patients living with unmet medical needs. Our research team is building a pipeline of small molecule inhibitors, with our first efforts aimed toward targeting currently undrugged mutations in ~~many different hematologic~~fibroblast growth factor receptor ("FGFR"). FGFR mutations are well-established oncogenic drivers in multiple diseases, but approved medicines fail to capture the full landscape of FGFR altered tumor types, with FGFR1-mediated hyperphosphatemia serving as the most common dose-limiting toxicity for pan-FGFR inhibitors. Preclinical data presented at EORTC-NCI-AACR in October of 2022, detailed our next-generation fibroblast growth factor receptor 2 ("FGFR2") program. The current series retains potency across all primary, gatekeeper and molecular brake resistance mutations. The disclosure includes an overview of ongoing optimization of the Cogent lead series, pharmacokinetic and pharmacodynamic assessment of an FGFR1-sparing novel molecule, as well as robust efficacy in model of FGFR2 clinical resistance (N549K). We remain on track for an IND in 2023 for a potentially best-in-class, FGFR1-sparing, pan-FGFR2 mutation tyrosine kinase inhibitor with IND enabling studies in early 2023.

We are also advancing a novel, ErbB2 mutant program, which is focused on actionable and underserved mutations in a variety of solid tumor ~~cancers, improving upon current cell~~indications. Currently available oral ErbB2 inhibitors struggle to provide broad mutant coverage while sparing EGFR activity. Our exemplar molecule demonstrates robust cellular inhibition of all key resistance and primary driver mutations, while sparing wild type EGFR target engagement. Preclinical data presented at EORTC-NCI-AACR in October of 2022, focused on a single advanced exemplar compound, which demonstrated dose ascendable pharmacokinetics, robust tumor phospho-ErbB2 suppression (L755S), and superior tumor growth inhibition when compared to the clinical competitor tucatinib.

For both FGFR and ErBB2, we see an opportunity to provide a more robust molecular response compared to existing therapies.

~~In our ongoing Phase I clinical trial using our lead ACTR construct, ACTR087, to treat adult patients with relapsed or refractorynon-Hodgkin~~ lymphoma (r/r NHL), we have demonstrated clinical proof of concept, as evidenced by ACTR T cell expansion and persistence, a favorable tolerability profile at the first dose level, and anti-tumor activity. We recently completed patient enrollment into the dose escalation phase of this trial and are advancing towards testing in an expanded patient cohort using an optimized dose of ACTR087 to support potential registration trials.

Since our inception in 2014, we have focused significant efforts and financial resources on ~~building our ACTR platform,~~ establishing and protecting our intellectual property portfolio, conducting research and development of our product candidates, manufacturing drug product material for use in preclinical studies and clinical trials, staffing our company, and raising capital. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from the sales of preferred stock and payments received under our collaboration agreement with Seattle Genetics, Inc. (Seattle Genetics). On April 3, 2018, we completed our initial public offering (IPO) of our common stock and issued and sold 5,770,000 shares of our common stock at a public offering price of $12.00 per share, resulting in net proceeds of approximately $64.4 million after deducting underwriting discounts and commissions but before deducting offering costs. In addition, we completed a concurrent private placement of $5.0 million of shares of common stock at the public offering price of $12.00 per share, or 416,666 shares, with Seattle Genetics (the Concurrent Private Placement).

In connection with our IPO, we issued and sold an additional 215,000 shares of our common stock in April 2018 pursuant to the underwriters’ partial exercise of their option to purchase additional shares of common stock at the public offering price of $12.00 and received additional net proceeds of $2.4 million after deducting underwriting discounts and commissions.

~~Since our inception, we have incurred significant operating losses.~~ Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. ~~For~~Our net losses were $100.6 million for the ~~three~~nine months ended ~~March 31, 2018, we reported a~~September 30, 2022 compared to net ~~loss~~losses of ~~$6.7 million.~~$47.4 million for the nine months ended September 30, 2021. As of ~~March 31, 2018,~~September 30, 2022, we had an accumulated deficit of ~~$64.3~~$371.6 million. We expect to continue to incur significant expenses and ~~increasing~~ operating losses for at least the next several years. We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. If we obtain regulatory approval for any of our product candidates and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing, and distribution. ~~Further, as a result of the IPO, we expect to incur additional costs associated with operating as a public company.~~

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can 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 marketing, distribution, or licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of ~~March 31, 2018,~~September 30, 2022, we had cash, cash equivalents and marketable securities of ~~$32.4 million and available borrowings under~~$289.1 million. Based on our ~~loan and security agreement of $15.0 million. We~~current plans, we expect that our current cash, cash equivalents and marketable securities ~~including net proceeds we received from the completion of our IPO and Concurrent Private Placement in April 2018,~~ will be sufficient to fund our operating expenses and capital expenditure requirements ~~through at least December 2019, without considering available borrowings~~into 2025.

In March 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus, or COVID-19, as a pandemic, which has spread throughout the United States and worldwide. We could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the recent outbreak of COVID-19 or variants thereof. We continue to monitor the pandemic and have taken steps 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 COVID-19 pandemic. The spread of COVID-19 has caused us to modify our business practices, including implementing a work-from-home policy for all employees who are able to perform their duties remotely and restricting all nonessential travel, and 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 our employees, the patients we serve and other business partners in light of COVID-19. Given the fluidity of the COVID-19 pandemic however, we do not yet know the full extent of the potential impact of COVID-19 on our business operations. The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic, outbreak, or other public health crisis and actions taken to contain or prevent the further spread, among others. Accordingly, we cannot predict with certainty the extent to which our business, financial condition and results of operations will be affected. We will continue to work diligently with our partners and stakeholders to continue advancing our product candidate under regulatory review as well as in our ~~loan~~clinical studies to the extent safe to do so for patients, caregivers and ~~security agreement. See “—Liquidity~~healthcare practitioners, and ~~Capital Resources”.~~ensuring the continuity of our manufacturing and supply chain.

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the near future. If our development efforts for our product candidates are successful and result in regulatory approval or additional license or collaboration agreements with third parties, we may generate revenue

in the future from a combination of product sales or payments from additional collaboration or license agreements that we may enter into with third parties. We expect that our revenue for the next several years will be derived primarily from a collaboration we entered into with Seattle Genetics in June 2015 as well as any additional collaborations that we may enter into in the future. We cannot provide assurance as to the timing of future milestone or royalty payments or that we will receive any of these payments at all.

The Company has a collaboration agreement with Seattle Genetics whereby the parties agreed to jointly develop two product candidates incorporating our ACTR platform and Seattle Genetics’ antibodies. Under the collaboration agreement, the Company conducts preclinical research and clinical development activities related to the two specified product candidates through Phase I clinical development, and Seattle Genetics provides the funding for those activities.

Effective January 1, 2018, we adopted a new revenue recognition standard, which changed the manner in which we recognize revenue from our collaboration agreement with Seattle Genetics. Under the new standard, we recognize revenue from the collaboration agreement using the~~cost-to-cost~~ ~~method, which we believe best depicts the transfer of control to the customer, in contrast to recognizing revenue on a straight-line basis over the estimated58-month~~ ~~performance period under the previous standard.~~

Under the collaboration agreement with Seattle Genetics, we recognized revenue of $2.2 million and $1.8 million for the three months ended March 31, 2018 and 2017, respectively, related to the upfront payment received from Seattle Genetics under our collaboration agreement as well as reimbursements of research and development costs.

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:

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 related goods are delivered or the services are performed.

~~Our~~Certain of our direct ~~external~~ research and development expenses are tracked on aprogram-by-program basis and consist of costs, such as fees paid to consultants, contractors, CMOs, and CROs in connection with our discovery, preclinical and clinical development activities. We do not allocate employee costs, costs associated with the manufacture of bezuclastinib, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified. ~~The table below summarizes our research and development expenses incurred by development program:~~

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will increase substantially in connection with our planned clinical and preclinical development activities in the near term and in the future. At this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following:

A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any of our product candidates.

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services. We anticipate that our general and administrative expenses will increase in the future as ~~we increase our headcount~~a result of the costs associated with the expansion of operations to support our ~~continued research activities~~on-going discovery, preclinical and development of our product candidates. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.clinical activities.

Interest income consists of interest earned on our cash equivalents and marketable securities balances. ~~Our interest income has not been significant due to low interest earned on invested balances.~~

Other income ~~net~~ consists of miscellaneous income and expense unrelated to our core operations, primarily income from subleasing a portion of our headquarters facilities.

Since our inception, we have not recorded any ~~income~~current or deferred tax ~~benefits~~benefit for the net losses we have incurred in each year or for our ~~earned~~ research and development tax credits generated, as we believe, based upon the weight of available evidence, that it is more likely than not that ~~all of~~ our net operating loss carryforwards and tax credits will not be realized. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2021. We reevaluate the utilization of net operating loss carryforwards and tax credits at each reporting period. As of December 31, ~~2017,~~2021, we had U.S. federal and state net operating loss carryforwards of ~~$29.8~~$128.8 million and ~~$31.0~~$47.1 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2035. Of the federal net operating loss carryforwards at December 31, 2021, $125.5 million is available to be carried forward indefinitely but we are permitted to offset a maximum of 80% of taxable income per year. As of December 31, ~~2017,~~2021, we also had U.S. federal and state research and development tax credit carryforwards of ~~$2.7~~$3.1 million and ~~$1.0~~$0.8 million, respectively, which may be available to offset future income tax liabilities and begin to expire in ~~2034~~2040 and ~~2029,~~2035, respectively.

Utilization of the U.S. federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to annual limitation under Section 382 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period.

We have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date.

Comparison of the Three Months Ended ~~March 31, 2018~~September 30, 2022 and ~~2017~~2021

The following table summarizes our results of operations for the three months ended ~~March 31, 2018~~September 30, 2022 and ~~2017:~~2021:

The following table summarizes our research and development expenses for the three months ended ~~March 31, 2018~~September 30, 2022 and ~~2017 of $2.2 million and $1.8 million, respectively, was due to the recognition of the upfront payment received from Seattle Genetics under our collaboration agreement as well as reimbursements of~~2021:

Total research and development ~~costs~~expense increased by Seattle Genetics over the performance period. Effective January 1, 2018, we adopted the new revenue recognition standard, which changed the manner in which we recognize revenue from our collaboration agreement with Seattle Genetics. Under the new standard, we recognize revenue from the collaboration agreement by applying the~~cost-to-cost~~ ~~method, in contrast to recognizing revenue on a straight-line basis over the estimated58-month~~ ~~performance period under the previous standard.~~

~~Research and development expenses were $8.1~~$15.1 million for the three months ended ~~March 31, 2018,~~September 30, 2022 compared to ~~$7.0~~the three months ended September 30, 2021 and the increase was driven by higher external research and development costs associated with the manufacture and development of bezuclastinib, including costs associated with the APEX, SUMMIT and PEAK trials, and the continued development of our research pipeline. Additionally, there was an increase in unallocated expenses driven by higher personnel costs due to an increase in headcount, including stock-based compensation expense which increased by $0.6 million for the three months ended ~~March 31, 2017. The decrease in direct external costs related~~September 30, 2022 compared to our ACTR087 used in combination with rituximab program of $0.7 million was primarily due to a decrease in consulting and manufacturing costs as there was no production activity in the first quarter of 2018, which was partially offset by an increase in clinical trial costs during the period. The increase in direct external costs incurred for our ACTR707 used in combination with rituximab program primarily related to an increase in clinical trial costs and manufacturing costs related to our Phase I clinical trial, which commenced in the fourth quarter of 2017. The increase in direct

~~external costs incurred for our ACTR087 used in combination withSEA-BCMA~~ ~~program primarily related to increased clinical trial costs related to our Phase I clinical trial which commenced in the first quarter of 2018. We are developing our ACTR087 used in combination withSEA-BCMA~~ ~~product candidate in conjunction with Seattle Genetics.~~

~~The increase in personnel-related costs of $0.3 million included in unallocated expenses was due to an increase in headcount in our regulatory function. Personnel-related costs for~~ the three months ended ~~March 31, 2018 and 2017 included stock-based compensation expense of $0.4 million and $0.3 million, respectively. The increase in laboratory~~September 30, 2021. This is further driven by increased lab supplies ~~facility-related,~~ and other ~~costs of $0.4 million was primarily due to increased~~ facilities costs ~~related~~ to ~~scaling our manufacturing processes and increased consultant costs supporting all~~support the build-out of ~~our programs, partially offset by a decrease in laboratory animal costs.~~the Cogent Research Team.

General and administrative expenses for the three months ended ~~March 31, 2018~~September 30, 2022 were ~~$1.1~~$6.9 million, compared to ~~$0.9~~$5.0 million for the three months ended ~~March 31, 2017.~~September 30, 2021. The increase in general and administrative expenses was primarily due to ~~increased accounting, audit and consulting fees and~~higher personnel costs driven by an increase in ~~personnel-related costs resulting from headcount-related changes.~~headcount, including stock-based compensation expense which increased by $0.5 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Interest income for the three months ended ~~March 31, 2018 and 2017~~September 30, 2022 was ~~$0.1 million for each period, respectively.~~

~~Other income, net for the three months ended March 31, 2018 was $0.2~~$1.5 million, compared to ~~less than~~ $0.1 million for the three months ended ~~March 31, 2017.~~September 30, 2021 . The increase is due to higher average invested balances in ~~other~~cash equivalents and marketable securities.

Other income, net was ~~primarily~~$0.3 million in the three months ended September 30, 2022, compared to $0.6 million for the three months ended September 30, 2021. Other income represents sublease income recognized resulting from the sublease of a portion of our former corporate headquarters space, partially offset by the right-of-use asset impairment charge recorded for this space.

There was no change in fair value of the CVR liability for the three months ended September 30, 2022. Any settlement of the remaining liability will be a cash settlement.

The following table summarizes our results of operations for the nine months ended September 30, 2022 and 2021:

The following table summarizes our research and development expenses for the nine months ended September 30, 2022 and 2021:

Total research and development expense increased by $49.5 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 and the increase was driven by higher external research and development costs associated with the manufacture and development of bezuclastinib, including costs associated with the APEX, SUMMIT and PEAK trials, and the continued development of our research pipeline. Additionally, there was an increase in unallocated expenses driven by higher personnel costs due to an increase in headcount, including stock-based compensation expense which increased by $3.4 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This is further driven by increased lab supplies and other facilities costs to support the build-out of the Cogent Research Team.

General and administrative expenses for the nine months ended September 30, 2022 were $19.2 million, compared to $14.5 million for the nine months ended September 30, 2021. The increase in general and administrative expenses was primarily due to higher personnel costs driven by an increase in headcount, including stock-based compensation expense which increased by $2.1 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Interest income for the nine months ended September 30, 2022 was $1.9 million, compared to $0.4 million for the nine months ended September 30, 2021. The increase is due to higher average invested balances in cash equivalents and marketable securities.

Other income, net was $1.6 million in the nine months ended September 30, 2022, compared to $1.8 million for the nine months ended September 30, 2021. Other income represents sublease income asrecognized resulting from the sublease ~~in effect for the three months ended March 31, 2018 for~~of a portion of our ~~facilities~~former corporate headquarters space, partially offset by the right-of-use asset impairment charge recorded for this space.

There was no change in fair value of the CVR liability for the nine months ended September 30, 2022. Any settlement of the remaining liability will be a ~~larger amount of space compared to the prior period.~~cash settlement.

We have incurred certain costs related to the COVID-19 outbreak as a result of taking necessary precautions for essential personnel to operate safely both in person as well as remotely. Costs incurred include items like incremental payroll costs, consulting support, IT infrastructure and facilities related costs. The estimated impact of COVID-19 is currently unknown. The final impact may vary based on the duration of the current social and economic conditions. To the extent the COVID-19 pandemic continues, it may materially impact our financial condition, liquidity or results of operations in the future. We do not currently believe the accumulated costs will present a material impact to our financial liquidity or position.

Since our inception, we have incurred significant operating losses. We have generated limited revenue to date from funding arrangements with our former collaboration partner. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. ~~Through March 31, 2018, we~~We have historically funded our operations primarily through the public offering and private placement of our securities and consideration received from our collaborative agreements.

On May 6, 2022, we filed a shelf registration statement on Form S-3 with the SEC. The shelf registration statement allows us to sell from time-to-time up to $300.0 million of common stock, preferred stock, debt securities, warrants or units comprised of any combination of these securities, for our own account in one or more offerings. The terms of any offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

Additionally, on May 6, 2022, pursuant to the Form S-3, we entered into a Sales Agreement (the “Sales Agreement”) with Guggenheim Securities, LLC (“Guggenheim Securities”), pursuant to which we may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to $75.0 million through Guggenheim Securities, as the sales agent. As of September 30, 2022, no shares have been sold under the Sales Agreement.

On June 13, 2022, we completed an underwritten public offering of 17,899,698 shares of our common stock at a public offering price of $8.25 per share (including the exercise in full by the underwriters of their 30-day option to purchase up to 2,730,000 additional shares of common stock) and, in lieu of common stock to certain investors, pre-funded warrants to purchase 3,030,302 shares of our common stock at a purchase price of $8.24 per underlying share. The net proceeds from the ~~sales of preferred stock of $77.3~~offering were approximately $161.9 million, after deducting the underwriting discounts and ~~payments received under a collaboration agreement of $33.3 million.~~ commissions and estimated offering expenses.

As of ~~March 31, 2018,~~September 30, 2022, the Company has 90,726,532 shares outstanding on a fully diluted and as-converted basis, including the 69,857,972 shares of common stock outstanding, the 606,060 pre-funded warrants that are exercisable for shares of common stock, and the 81,050 shares of Series A Preferred stock, which are convertible into 20,262,500 shares of common stock.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of ~~$32.4~~$289.1 million, which we believe will be sufficient to fund our operating expenses and ~~available borrowings under our loan and security agreement of $15.0 million.~~capital expenditure requirements into 2025.

On April 3, 2018, we completed our IPO, and issued and sold 5,770,000 shares of common stock at a public offering price of $12.00 per share, resulting in net proceeds of $64.4 million after deducting underwriting discounts and commissions but before deducting offering costs. We also completed the Concurrent Private Placement and sold 416,666 shares of common stock at a public offering price of $12.00 per share, resulting in gross proceeds of $5.0 million. On April 25, 2018, we issued and sold an additional 215,000 shares of our common stock at the IPO price of $12.00 per share pursuant to the underwriters’ partial exercise of their option to purchase additional shares of common stock, resulting in additional net proceeds of $2.4 million after deducting underwriting discounts and commissions.

The following table summarizes our sources and uses of cash for each of the periods presented:

During the ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2022, operating activities used ~~$8.0~~$89.2 million of cash, primarily resulting from our net loss of ~~$6.7~~$100.6 million and ~~from~~ net cash used byin changes in our operating assets and liabilities of ~~$2.0~~$6.0 million, partially offset by net~~non-cash~~ noncash charges of ~~$0.8~~$17.4 million. Net cash used byin changes in our operating assets and liabilities for the ~~three~~nine months ended ~~March 31, 2018~~September 30, 2022 consisted primarily of a ~~$0.8 million increase in accounts receivable, a $0.7~~$3.1 million increase in prepaid expenses ~~and~~ other current assets, a ~~$0.6 million decrease in deferred revenue and a $0.4~~$1.0 million increase in other assets, and a $8.3 million decrease in the operating lease liability partially offset by a ~~$0.4~~$6.4 million increase in accounts payable and accrued expenses and other current liabilities.

During the ~~three~~nine months ended ~~March 31, 2017,~~September 30, 2021, operating activities used ~~$7.3~~$38.0 million of cash, primarily resulting from our net loss of ~~$5.9~~$47.4 million, ~~and~~partially offset by net cash ~~used~~provided by changes in our operating assets and liabilities of ~~$1.9~~$1.8 million ~~partially offset~~and by net~~non-cash~~ noncash charges of ~~$0.6~~$7.6 million. Net cash ~~used~~provided by changes in our operating assets and liabilities for the ~~three~~nine months ended ~~March 31, 2017~~September 30, 2021 consisted primarily of a ~~$0.9~~$5.9 million ~~decrease in deferred revenue, a $0.8 million decrease~~increase in accounts payable and accrued expenses and other current liabilities, and a ~~$0.2~~$1.3 million decrease in the right-of-use asset, partially offset by a $1.9 million increase in prepaid expenses and other current ~~assets.~~assets, a $2.0 million increase in other assets and a $1.5 million decrease in the operating lease liability.

In June 2015, we received an upfront payment of $25.0 million from Seattle Genetics under our collaboration agreement. At that time, we recorded the $25.0 million as deferred revenue, to be subsequently recognized as revenue over our period of performance. Changes in deferred revenue in all periods were due to the initial recording of and increases to the amount of deferred revenue from payments from Seattle Genetics for reimbursements of research and development costs as well as the subsequent recognition as revenue of a portion of the deferred revenue.

Changes in accounts payable, accrued expenses, and prepaid expenses in all periods were generally due to growth in our business, the advancement of our product candidates, and the timing of vendor invoicing and payments.

During the ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2022, net cash ~~provided by~~used in investing activities was ~~$5.9~~$153.1 million ~~consisting~~which consisted of ~~maturities and sales of marketable securities of $6.0 million, partially offset by~~ purchases of property and equipment ~~of $0.1 million.~~and marketable securities.

During the ~~three~~nine months ended ~~March 31, 2017,~~September 30, 2021, net cash used byin investing activities was ~~$0.8~~$1.3 million ~~consisting~~which consisted primarily of ~~purchases of marketable securities of $4.5 million and~~ purchases of property and ~~equipment of $0.3 million, partially offset by maturities and sales of marketable securities of $4.0 million.~~equipment.

During the ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2022, net cash ~~used~~provided by financing activities was ~~$0.5~~$163.2 million, ~~consisting~~which consisted of $161.9 million in proceeds from the ~~payment~~issuance of common stock and pre-funded warrants in an underwritten public offering, net of paid offering costs, ~~related to~~proceeds from the ~~2018 equity financing~~issuance of ~~$0.6 million, partially offset by~~common stock under the Employee Stock Purchase Plan, proceeds from the issuance of common stock upon stock option exercises and proceeds from pre-funded warrant exercises.

During the nine months ended September 30, 2021, net cash used in financing activities was $0.1 million, which consisted of ~~less than $0.1 million.~~

~~Loan~~the proceeds from the issuance of common stock upon stock option exercises and ~~Security Agreement~~

~~In January 2017, we entered into a loan and security agreement (the Loan Agreement) with Pacific West Bank (PWB), which provides for term loan borrowings~~from the issuance of ~~up to $15.0 million through January 19, 2019. Borrowings~~common stock under the Loan Agreement bear interest at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 3.75%, and are payable over an interest-only period until January 19, 2019, followed by a~~24-month~~ ~~period of equal monthly payments of principal and interest. All amounts outstanding as of the maturity date of January 19, 2021 become immediately due and payable.~~Employee Stock Purchase Plan.

In connection with the Loan Agreement, we agreed to enter into warrant agreements with PWB pursuant to which warrants will be issued to purchase a number of shares of our capital stock equal to 1% of the amount of each term loan borrowing under the Loan Agreement, divided by the applicable exercise price.

~~No amounts had been borrowed as term loans under the Loan Agreement as of March 31, 2018.~~

Borrowings under the Loan Agreement are collateralized by substantially all of our assets, except for our intellectual property. Under the Loan Agreement, we have agreed to affirmative and negative covenants to which we will remain subject until maturity. These covenants include limitations on our ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses. There are no financial covenants associated with the Loan Agreement. Events of default under the Loan Agreement include failure to make payments when due, insolvency events, failure to comply with covenants, and material adverse effects with respect to us.

We expect our expenses to increase ~~substantially~~ in connection with our ongoing activities, particularly as we advance the ~~preclinical activities~~clinical development of our current and ~~clinical trials for our~~any future product candidates ~~in development. In addition, as a result of the IPO, we expect to incur~~and conduct additional ~~costs associated with operating as a public company.~~research, development and preclinical activities. The timing and amount of our operating expenditures will depend largely on:

~~As of March 31, 2018,~~Based on our current plans, we ~~had~~believe that our existing cash, cash equivalents and marketable securities of ~~$32.4~~$289.1 million ~~and available borrowings under our Loan Agreement~~as of ~~$15.0 million. We expect that our cash, cash equivalents and marketable securities, including net proceeds we received from the completion of our IPO and Concurrent Private~~

~~Placement in April 2018,~~September 30, 2022 will ~~be sufficient~~enable us to fund our operating expenses and capital expenditure requirements ~~through at least December 2019, without considering available borrowings under our Loan Agreement.~~into 2025. We have based this estimate on assumptions that may prove to be wrong, and we could ~~utilize~~exhaust our available capital resources sooner than we expect. The Company will require additional funding to complete the critical activities planned to support ongoing research and development programs.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ~~your~~existing ownership ~~interest~~interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect ~~your~~the rights ~~as a~~of common ~~stockholder.~~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 drug candidates that we would otherwise prefer to develop and market ourselves.

~~During~~There have been no material changes in our critical accounting policies during the three months ended ~~March 31, 2018, there were no material changes~~September 30, 2022, as compared to ~~our contractual obligations and commitments from~~ those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on March 29, 2018.

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We believe that of our critical accounting policies described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our ~~final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC~~Annual Report on ~~March 29, 2018, the following involve the most judgment and complexity:~~Form 10-K.

Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting policies from those described in our final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on March 29, 2018.

We did not have during the periods presented, and we do not currently have, anyoff-balance sheet arrangements, as defined in the rules and regulations of the SEC.

A description of our material cash requirements, including commitments for capital expenditures, is described above and disclosed in Note 7 to our condensed consolidated financial statements
appearing elsewhere in this Quarterly Report.

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

As of March 31, 2018, we had cash, cash equivalents, and marketable securities of $32.4 million, which consisted of cash, money market funds, U.S. Treasury notes, and U.S. government agency bonds. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.

~~As of March 31, 2018, we had no debt outstanding and are therefore are not subject to interest rate risk related to debt.~~

The Jumpstart Our Business Startups Act of 2012 ~~(JOBS Act)~~(“JOBS Act”) permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

We are a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, for this reporting period and are not required to provide the information required under this item.

Our management, with the participation of our Chief Executive Officer and ~~our~~ President and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31, 2018.~~September 30, 2022. The term “disclosure controls and procedures,” as defined in Rules13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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 the evaluation of our disclosure controls and procedures as of ~~March 31, 2018,~~September 30, 2022, our Chief Executive Officer and ~~President and~~our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

No change in our internal control over financial reporting (as defined in Rules13a-15(f) and15d-15(f) under the Exchange Act) occurred during the three months ended ~~March 31, 2018~~September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We are not currently subject to any material legal proceedings. From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Regardless of the outcome, litigation can have a material adverse effect on us because of defense and settlement costs, diversion of management resources, and other factors.

~~Investing~~The following risk factors and other information included in this Quarterly Report on Form 10-Q should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our ~~common stock involves a high degree of risk.~~business operations. You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form10-Q, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as our other filings with the Securities and Exchange Commission, before deciding whether to invest in our common stock. ~~The occurrence of~~If any of the ~~events or developments described below could harm~~following risks occur, our business, financial condition, results of operations and future growth ~~prospects. In such an event, the market price of our common stock~~prospects could ~~decline~~be materially and ~~you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.~~adversely affected.

Risks Related to the Discovery and Development of Our ~~Business and Industry~~Drug Candidates

~~We have incurred net losses in every year since our inception and anticipate that we will continue to incur net losses in the future.~~

We are a clinical-stage biopharmaceutical company with a limited operating history. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception in March 2014. Our net loss was $6.7 million for the three months ended March 31, 2018 and $25.5 million for the year ended December 31, 2017. As of March 31, 2018, we had an accumulated deficit of $64.3 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, product candidates.

Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

~~Our ACTR T cell product candidates represent a novel approach to cancer treatment, which creates significant challenges for us.~~

Our ACTR T cell product candidates involve (1) harvesting T cells from the patient’s blood via leukapheresis, (2) genetically engineering the T cells to incorporate the ACTR transgene, (3) expanding the number of engineered T cells to the desired dose level and (4) infusing the engineered ACTR T cells back into the patient with or following the administration of the antibody. Advancing this novel and personalized investigational therapy creates significant challenges for us, including:

In developing our product candidates we have not exhaustively explored different options in the design of the ACTR construct and in the method for manufacturing ACTR T cells. We may find our existing ACTR T cells and manufacturing process may be substantially improved with future design or process changes, necessitating development of new backup ACTR constructs and further clinical testing and delaying launch of our first products. For example:

Our business is highly dependent on the success of ~~ACTR087 used~~our bezuclastinib program and our ability to discover and develop additional product candidates. We may not be successful in ~~combination with rituximab~~our efforts to develop bezuclastinib or ~~ACTR707 used in combination with rituximab,~~expand our ~~lead product candidates, and other ACTR-antibody combinations that we may develop.~~pipeline of drug candidates.

Our business and future success depend on our ability to develop, obtain regulatory approval offor and then successfully commercialize ~~one of our~~bezuclastinib and any other product candidates ~~such as ACTR087 used in combination with rituximab and other product combinations~~ that we ~~develop using antibodies in combination with ACTR087~~may discover and develop. We are pursuing clinical development of bezuclastinib to target SM and GIST through our APEX, SUMMIT and PEAK clinical trials. There is no guarantee that any or ~~ACTR707. All~~all of these trials will be successful. Even if our ~~product candidates, including ACTR087 used in combination with rituximab and ACTR 707 used in combination with rituximab,~~trials are ~~in the early stages of development and~~successful, bezuclastinib will require ~~additional clinical andnon-clinical~~ ~~development,~~ regulatory review and approval, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we ~~can~~are able to generate any revenue from product ~~sales.~~sales, if ever.

Through the development of the research team, we are also working to build a pipeline of other product candidates. Researching, developing, obtaining regulatory approval for and commercializing additional product candidates will require substantial additional funding beyond the net proceeds from the public offering and private placement of our securities and consideration received from our collaborative agreements and is prone to the risks of failure inherent in medical product development. Even if we are successful in continuing to build and expand our pipeline, we cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development process, or that any such product candidates will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives.

If unacceptable side effects are identified during the development of our drug candidates, we may need to abandon or limit such development.

If our drug candidates are associated with unacceptable side effects in preclinical or clinical trials or have characteristics that are unexpected, we may need to abandon their development, limit development to more narrow uses or subpopulations in which the unacceptable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective or highlight these risks, side effects, or other characteristics in the approved product label. In pharmaceutical development, many drugs that initially show promise in early-stage testing for treating cancer may later be found to cause side effects that prevent further development of the drug. Currently marketed therapies for the treatment of cancer are generally limited to some extent by their toxicity. In addition, ~~because ACTR087~~some of our drug candidates would be chronic therapies or used in pediatric populations, for which safety concerns may be particularly important. Use of our drug candidates as monotherapies may also result in adverse events consistent in nature with other marketed therapies. In addition, if used in combination with ~~rituximab~~other therapies in the future, our drug candidates may exacerbate adverse events associated with the therapy. If unexpected side effects are identified during development, we may be required to develop a Risk Evaluation and ~~ACTR707 used~~Mitigation Strategy (“REMS”) to mitigate those serious safety risks, which could impose significant distribution and/or use restrictions on our products.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

The development and commercialization of new pharmaceutical and biotechnology products is highly competitive. We face competition with respect to our current clinical-stage drug candidates and will face competition with respect to any drug candidates that we may seek to develop or commercialize in ~~combination~~the future, from major pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing our drug candidates. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have superior dosing regimens, have fewer or less severe side effects, are approved for broader indications or patient populations, are approved for specific sub-populations, are more convenient or are less expensive than bezuclastinib or any other products that we may develop. Our competitors also may obtain FDA or other marketing approval for their products more rapidly than any approval we may obtain for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining marketing approvals, and marketing and selling approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

We may choose not to develop a potential product candidate, or we may suspend, deprioritize or terminate one or more discovery programs or preclinical or clinical product candidates or programs.

At any time and for any reason, we may determine that one or more of our discovery programs or preclinical or clinical product candidates or programs does not have sufficient potential to warrant the allocation of resources toward such program or product candidate. Accordingly, we may choose not to develop a potential product candidate or elect to suspend, deprioritize or terminate one or more of our discovery programs or preclinical or clinical product candidates or programs. If we suspend, deprioritize or terminate a program or product candidate in which we have invested significant resources, we will have expended resources on a program or product candidate that will not provide a full return on our investment and may have missed the opportunity to have allocated those resources to potentially more productive uses, including existing or future programs or product candidates.

We may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, but we may not realize any resulting benefits.

We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with ~~rituximab are~~third parties that we believe will complement or augment our ~~two most advanced~~development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. In particular, we may seek to enter into collaborations with our bezuclastinib program and other collaborations to progress the clinical development of the bezuclastinib program. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business.

We may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because ~~all~~they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our ~~other~~ product candidates as having the requisite potential to demonstrate safety and efficacy and obtain marketing approval. Further, collaborations involving our product candidates are subject to numerous technical, business, and legal risks.Even if we are successful in entering into a collaboration with respect to the development and/or commercialization of one or more product candidates, there is no guarantee that the collaboration will be successful.

The incidence and prevalence for target patient populations of our drug candidates have not been established with precision. If the market opportunities for our drug candidates are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our revenue potential and ability to achieve profitability will be adversely affected.

The precise incidence and prevalence for GIST and SM are unknown. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our drug candidates, are based on estimates, which are inherently uncertain. The total addressable market opportunity for bezuclastinib , and any other drug candidates we may produce will ultimately depend upon, among other things, the diagnosis criteria included in the final label for our ~~ACTR platform, if either of~~future approved drugs for sale for these product candidates encounters safety, efficacy, or manufacturing problems, developmental delays, regulatory, or commercialization difficulties or other problems, our development plans and business would be significantly harmed. For example, our Phase I clinical trial for ACTR087 used in combination with rituximab was placed on clinical hold in December 2017 pending submission of certain information relating to the trial. The clinical hold was removed in February 2018, following review of this informationindications, acceptance by the ~~FDA.~~

The commercial success of any future approved drugs, including bezuclastinib, will depend upon the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community.

~~Our~~If bezuclastinib and any future approved drugs do not achieve an adequate level of acceptance by physicians, patients, third-party payors, and others in the medical community, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of bezuclastinib and of any current or future drug candidates, if approved for commercial sale, will depend on a number of factors, including the availability, perceived advantages, and relative cost, safety, and efficacy of alternative and competing treatments; and the prevalence and severity of any side effects, adverse reactions, misuse, or any unfavorable publicity in these areas, in particular compared to alternative treatments. Even if a potential drug displays a favorable efficacy and safety profile in preclinical and clinical studies, market acceptance of the drug will not be known until after it is launched.

Clinical trials are expensive, time-consuming, and difficult to design and implement.

Human clinical trials ~~may fail~~are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. We are unable to predict when or if our drug or any of our drug candidates will prove effective or safe in humans or will obtain marketing approval. Before obtaining marketing approval from regulatory authorities for the sale of any drug candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate ~~adequately~~ the safety and efficacy of ~~any~~our drug candidates in humans. A failure of ~~our product candidates, which would prevent~~one or ~~delay regulatory approval and commercialization.~~

Before obtaining regulatory approvals for the commercial sale of our product candidates, including ACTR087 used in combination with rituximab and other product candidates that we develop using antibodies in combination with ACTR087 and ACTR707, we must demonstrate through lengthy, complex and expensive preclinical testing andmore clinical trials that our product candidates are both safe and effective for use in each target indication. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any ~~time during the clinical trial process, and, because our product candidates are in an early~~ stage of ~~development, there is a high risk of failure and we may never succeed in developing marketable products.~~testing. The ~~results~~outcome of preclinical ~~studies~~testing and early clinical trials ~~of our product candidates~~ may not be predictive of the success of later clinical trials, interim or preliminary results of ~~later-stage~~a clinical trial do not necessarily predict final results, and results for one indication may not be predictive of the success in additional indications. In particular, the small number of patients in our early clinical trials may make the results of these trials less predictive of the outcome of later clinical trials. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through ~~clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial~~ clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy, insufficient durability of efficacy, or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence clinical trials are never approved as products.

~~Any~~We may experience numerous unforeseen events during, or as a result of, clinical trials that ~~we may conduct may not demonstrate the efficacy and safety necessary~~could delay or prevent our ability to obtain ~~regulatory~~marketing approval ~~to market~~or commercialize our drug or drug candidates.Our product ~~candidates. If the results of our ongoing~~development costs will increase if we experience delays in preclinical studies or ~~future~~ clinical trials ~~are inconclusive with respect to the efficacy of our product candidates, if we do not meet the clinical endpoints with statistical and clinically meaningful significance,~~ or ~~if there are safety concerns associated with our product candidates, we may be prevented or delayed~~ in obtaining marketing ~~approval for such product candidates. In some instances, there can be significant variability in safety~~approvals. We do not know whether any of our planned preclinical studies or ~~efficacy results between different~~ clinical trials ~~of the same product candidate due~~will begin on a timely basis or at all, will need to ~~numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the~~be restructured, or will be completed on schedule, or at all. Significant preclinical study or clinical trial ~~protocols and the rate of dropout among clinical trial participants.~~

~~We designed our Phase I clinical trial of ACTR087 used in combination with rituximab, calledATTCK-20-2,~~ primarily to assess safety and efficacy in adult patients with r/r NHL. The preliminary results from the Phase I clinical trial of ACTR087 used in combination with rituximab may not be indicative of the final analysis of this Phase I clinical trial, especially given the small number of patients that we plan to dose in the trial. In addition, the Phase I results may not predict results fordelays also could shorten any further clinical testing of ACTR087 used in combination with rituximab or other product candidates that we have developed, or may develop in the future, using antibodies in combination with ACTR087 and ACTR707 or in different indications.

~~Additionally, as of the most recent data cutoff date of March 7, 2018, approximately 12% (two out of 17) of ACTR087 treated patients inATTCK-20-2~~ experienced ACTR087-related severe cytokine release syndrome (CRS) and 6% (one out of 17) of patients experienced ACTR087-related neurotoxicity, which was fatal. Of the two events of CRS, one patient subsequently experienced a fatal case of enterococcal sepsis considered related to ACTR087 and one patient subsequently experienced a fatal case of sepsis considered not related to ACTR087. These events resulted in the FDA placing this trial on clinical hold in December 2017 pending submission of certain information relating to the~~ATTCK-20-2~~ ~~clinical trial. The clinical hold was removed in February 2018, following review of this information by the FDA. Several protocol and dosing changes were made in early 2018,~~periods during which we ~~expect~~may have the exclusive right to reduce the incidence of severe adverse events and better manage those events that do occur. If severe safety events are observed in patients treated in the future in spite of the modifications outlined above, the FDA may determine, at any time, that there is an unacceptable safety risk for patients and we may be requiredcommercialize our drug candidates or allow our competitors to ~~stop the trial prior~~bring products to ~~its completion or our ongoing clinical trials may be halted or put on further clinical holds prior to completion.~~

In addition, even if the trials are successfully completed, clinical data are often susceptible to varying interpretations and analyses, and we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results asmarket before we do and ~~more trials could be required before we submit~~impair our ~~product~~ability to successfully commercialize our drug candidates ~~for approval. For instance, although~~and may harm our ~~lead product candidates will be dosed in refractory patients with antibodies that the patients have already received, we plan to test future product candidates in patients that have never received theco-administered~~ ~~antibody in prior treatment~~business and ~~with antibodies that have never been independently evaluated for safety or efficacy. As a result,~~

it may be difficult to demonstrate that the ACTR construct, rather than the antibody alone, is causing an observed effect. We cannot guarantee that the FDA will view the ACTR construct as having efficacy even if positive results are observed in these clinical trials. To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, approval of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.operations.

~~We cannot guarantee that our product candidates will show any functionality in the solid tumor environment.~~

While we plan to develop product candidates for use in solid tumor cancers, including ACTR707 used in combination with trastuzumab for HER2+ cancers, we cannot guarantee that our product candidates will show any functionality in the solid tumor environment. The cellular environment in which solid tumor cancers exist is inimical to T cells due to several factors including: (1) immunosuppressive cells (e.g., regulatory T cells (Tregs), myeloid derived suppressor cells (MDSCs)), (2) immunosuppressive enzymes and signaling molecules (e.g., IDO1,~~TGF-beta),~~ (3) limited nutrients (e.g., oxygen, glucose), and (4) toxic metabolites (e.g., reactive oxygen species, lactic acid). Together, these factors can limit the ability of T cells, including ACTR T cells, both to penetrate into the solid tumor and to function properly once there. As a result of these and other solid tumor challenges, our product candidates may not demonstrate efficacy in solid tumors. For example, our ACTR-based product candidates may not be able to access the solid tumor, and even if they do, they may not be able to exert anti-tumor effects in an immunosuppressive tumor microenvironment. In addition, the safety profile of our product candidates may differ in a solid tumor setting. If we are unable to make our product candidates function in solid tumor cancers, our development plans and business may be significantly harmed.

Since the number of patients that we have dosed ~~or plan~~ to ~~dose,~~date in our ~~ongoing or planned Phase I~~ clinical trials is small, the results from such clinical trials ~~once completed,~~ may be less reliable than results achieved in larger clinical ~~trials, which may hinder our efforts to obtain regulatory approval for our product candidates.~~trials.

A study design that is considered appropriate for regulatory approval includes a sufficiently large sample size with appropriate statistical power, as well as proper control of bias, to allow a meaningful interpretation of the results. In our ongoing Phase I clinical trial of ACTR087 used in combination with rituximab, for example, we have analyzed the dose-limiting toxicities of ACTR087 used in combination with rituximab in only 17 patients with r/r NHL so far, 12 of whom were evaluable for anti-tumor effects. The preliminary results of trials with smaller sample sizes ~~such as our ongoing Phase I clinical trial for ACTR087 used in combination with rituximab,~~ can be disproportionately influenced by the impact the treatment had on a few individuals, which limits the ability to generalize the results across a broader community, thus making the study results less reliable than studies with a larger number of patients. As a result, there may be less certainty that such product candidates would achieve a statistically significant effect in any future clinical trials. ~~If we conduct~~In our current and any future clinical trials, we may not achieve a statistically significant result or the same level of statistical significance, if any, that we may ~~see~~have seen in prior clinical trials or preclinical studies.

As difficulties arise enrolling patients in our clinical trials, clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. As an example, clinical trial site start-up and patient enrollment in our Phase I2 SUMMIT trial has been slower than originally forecast. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. The enrollment of patients depends on many factors, including: the patient eligibility criteria defined in the protocol; the size of the patient population required for analysis of the trial’s primary endpoints; and our ability to recruit clinical trial ~~once~~investigators with the appropriate competencies and experience.

In addition, our clinical trials compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition reduces the number and types of patients available to us because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Additional delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing and planned clinical trials.

Interim, “top-line” and preliminary data from our clinical trials that we ~~complete~~announce or publish from time to time may change as more patient data become available, may be interpreted differently if additional data are disclosed, and are subject to audit and verification procedures that could result in material changes in the ~~trial.~~final data.

From time to time, we may publicly disclose preliminary or “top-line” data from our clinical trials, which may be based on a preliminary analysis of then-available data in a summary or “top-line” format, and the results andrelated findings may change as more patient data become available, may be interpreted differently if additional data are disclosed at a later time and are subject to audit and verification procedures that could result in material changes in the final data. If additional results from our clinical trials are not viewed favorably, our ability to obtain approval for and commercialize our drug candidates, our business, operating results, prospects, or financial condition may be harmed and our stock price may decrease.

We may not be able to file investigational new drug applications ~~(INDs)~~(“IND”s) or IND amendments or clinical trial authorization applications (“CTA”s) to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA or other regulatory authorities may not permit us to proceed.

~~We expect to submit an IND for ACTR707 used in combination with trastuzumab in 2018. However, our~~Our timing of filing INDs or CTAs on ~~the~~our product ~~candidate~~candidates is dependent on further research. We cannot be sure that submission of an IND or CTA will result in the FDA or other regulatory authority allowing further clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to existing INDs.

We have limited experience as a company conducting clinical ~~trials or managing a manufacturing facility for our product candidates.~~trials.

We have limited experience as a company in conducting clinical trials. In part because of this lack of experience, we cannot be certain that our ongoing clinical trials will be completed on time or if the planned clinical trials will begin or be completed on time, if at all. ~~Large-scale trials would require significant additional financial~~

Our updated bezuclastinib formulation is unproven and ~~management resources and reliance on third-party~~may not work as intended in clinical ~~investigators, contract research organizations (CROs), or consultants. Relying on third-party clinical investigators or CROs may force us~~trials.

In November 2021 we announced an updated formulation of bezuclastinib which is intended to ~~encounter delays that are outside~~reduce the number of daily tablets required, thereby potentially improving the overall patient experience. This formulation is currently being used in our ~~control.~~

~~In the future, we also intend to operate our own manufacturing facility, which will require significant resources, and we have limited experience~~PEAK trial, as well as a ~~company in expanding or managing a manufacturing facility. In part because of this lack of experience, we cannot be certain that our manufacturing facility will be completed on time, if at all, or if~~Phase 1 clinical study evaluating the ~~planned clinical trials will begin or be completed on time, if at all. In part because of our inexperience, we may have unacceptable or inconsistent product quality success rates~~pharmacokinetics, relative bioavailability and yields, and we may be unable to maintain adequate quality control, quality assurance and qualified personnel. In addition, if we switch from one manufacturing facility to our own manufacturing facility for one or more of our product candidates in the future, we may need to conduct additional preclinical studies to bridge our modified product candidates to earlier versions. Failure to successfully create and operate our proposed manufacturing facility could adversely affect the commercial viability of our product candidates.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, require expansion of the trial size, limit their commercial potential, or result in significant negative consequences.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities, including institutional review boards (IRBs), to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities. Further, clinical trials by their nature utilize a sample of the potential patient population. With a limited number of subjects and limited duration of exposure, rare and severe sidefood effects of ~~our product candidates may only be uncovered with a significantly larger number of patients exposed~~bezuclastinib in healthy adults. The formulation is unproven to ~~the drug. Because of our dose escalation design for our clinical trials, undesirable side effects could also result in an expansion in the size of our clinical trials, increasing the expected costs~~date, and ~~timeline of our clinical trials. Additionally, results of our trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.~~

~~In certain trials ofCAR-based~~ products, which also use an engineered T cell, side effects, such as CRS and neurotoxicity, arose that resulted in risk, injury, or death to the patients. We observed some of these side effects in the second dose level of our Phase I clinical trial of ACTR087 used in combination with rituximab, called~~ATTCK-20-2.~~ ~~These events resulted in the FDA placing the trial on clinical hold pending submission of certain information relating to theATTCK-20-2~~ clinical trial. The clinical hold was removed in February 2018, following review of this information by the FDA. We will likely continue to observe some or all of these side effects in our clinical trials at additional dosage levels. We have established safety management and monitoring guidelines for clinical investigators to detect and treat potential side effects. However, there is no guarantee that ~~these medical interventions~~it will be effective in preventing negative effects to the patient. Additionally, if we do continue to observe severe side effects in our clinical trials, our ongoing clinical trials may be halted or put on an additional clinical hold prior to completion if there is an unacceptable safety risk for patients.successful.

Autoimmune reaction triggered by an interaction between a patient’s naturally occurring antibodies and ACTR T cells is a theoretical safety risk unique to the ACTR approach. If a patient’s self-generated antibodies were directed to a target expressed on the surface of cells in normal tissue (i.e., autoantibodies), ACTR would be directed to attack these tissues, potentially resulting in~~off-tumor~~ effects. These autoantibodies may be present whether or not the patient has an active autoimmune disease. In our clinical testing, we have taken steps to minimize the likelihood of this happening (e.g., excluding patients with a history of autoimmune disease from our trials and screening for the presence of certain autoantibodies). To date, we have not observed any autoimmune adverse effects in clinical testing of ACTR. There is no guarantee, however, that we will not observe autoimmune reactions in the future and no guarantee that if we do, that we will be able to implement interventions to address the risk.

If unacceptable toxicities arise in the development of our product candidates, we could suspend or terminate our trials or the FDA or comparable foreign regulatory authorities, or local regulatory authorities such as IRBs, could order us to cease clinical trials. Competent national health authorities, such as the FDA, could also deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, as toxicities resulting from T cell therapy are not normally encountered in the general patient population and by medical personnel. We expect to have to train medical personnel using ACTR to understand the side effect profile of ACTR for both our planned clinical trials and upon any commercialization of any product candidates, if approved. Inadequate training in recognizing or managing the potential side effects of ACTR could result in patient deaths. Any of these occurrences may harm our business, financial condition and prospects significantly.

~~If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.~~

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. The enrollment of patients depends on many factors, including:

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites. Moreover, because our product candidates represent a departure from more commonly used methods for cancer treatment, potential patients and their doctors may be inclined to use conventional therapies, such as chemotherapy and hematopoietic stem cell transplantation, rather than enroll patients in any future clinical trial. Additionally, because some of our clinical trials are in patients with relapsed/refractory cancer, the patients are typically in the late stages of the disease and may experience disease progression independent from our product candidates, making them unevaluable for purposes of the trial and requiring additional enrollment.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing and planned clinical trials, which could prevent completion or commencement of these trials and adversely affect our ability to advance the development of our product candidates.

~~Clinical trials are expensive, time-consuming, and difficult to design and implement.~~

Human clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. Because our product candidates are based on new technology and engineered on a~~patient-by-patient~~ basis, we expect that they will require extensive research and development and have substantial manufacturing and processing costs. In addition, costs to treat patients with relapsed or refractory cancer and to treat

potential side effects that may result from our product candidates can be significant. Accordingly, our clinical trial costs are likely to be significantly higher than those for more conventional therapeutic technologies or drug product candidates. In addition, our proposed personalized product candidates involve several complex and costly manufacturing and processing steps, the costs of which will be borne by us.

The market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments, and may be small, and our estimates of the prevalence of our target patient populations may be inaccurate.

Cancer therapies are sometimes characterized as first line, second line, or third line, and the FDA often approves new therapies initially only for a particular line of use. When cancer is detected early enough, first line therapy is sometimes adequate to cure the cancer or prolong life without a cure. Whenever first line therapy, usually chemotherapy, antibody drugs, tumor-targeted small molecules, hormone therapy, radiation therapy, surgery, or a combination of these, proves unsuccessful, second line therapy may be administered. Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these. Third line therapies can include hematopoietic stem cell transplantation in certain cancers, chemotherapy, antibody drugs, and small molecule tumor-targeted therapies, more invasive forms of surgery, and new revolutionary technologies. We expect to initially seek approval of our product candidates in most instances at least as a third line therapy, for use in patients with relapsed or refractory metastatic cancer. Subsequently, for those products that prove to be sufficiently safe and beneficial, if any, we would expect to seek approval as a second line therapy and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved as a third or subsequent line of therapy, would be approved for an earlier line of therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.

Our projections of both the number of people who have the cancers we are targeting, as well as the subset of people with these cancers in a position to receive a particular line of therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect. Further, new therapies may change the estimated incidence or prevalence of these cancers. The number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. For instance, we expect ACTR087 used in combination with rituximab to initially target a small patient population that suffers from r/r NHL. Even if we obtain significant market share for our product candidates within our addressable patient population, because the potential target populations are small, we may never achieve profitability without obtaining regulatory approval for additional indications, including use as first or second line therapy.

~~If we fail to develop additional product candidates, our commercial opportunity will be limited.~~

We have developed a pipeline of product candidates and intend to pursue clinical development of additional product candidates that combine ACTR T cells with different antibodies and target different tumor types. Developing, obtaining regulatory approval for and commercializing additional product candidates will require substantial additional funding beyond the net proceeds of our initial public offering, or IPO, and concurrent private placement and is prone to the risks of failure inherent in medical product development. We cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development process.

Even if we receive FDA approval to market additional product candidates for the treatment of cancer, we cannot assure you that any such product candidates will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize additional product candidates, our commercial opportunity will be limited. Moreover, a failure in obtaining regulatory approval of additional product candidates may have a negative effect on the approval process of any other, or result in losing approval of any approved product candidate.

ACTR therapies rely on the use of antibodies to target specific cancers, which are developed by third parties. We are limited in our ability to apply ACTR to a wider range of potential target cancers by our ability to partner for or acquire these antibodies on commercially reasonable terms.

ACTR therapies require the use of tumor-specific antibodies, which guide the ACTR and bind to the antigens on the surface of a tumor, to target specific types of cancers. Many of our current and proposed clinical trials rely on the use of commercially available and well-understood antibodies, such as rituximab and trastuzumab. Our ability to develop and commercialize our ACTR T cells used in combination with rituximab, trastuzumab, or any other~~FDA-approved~~ ~~antibody will depend on our ability to purchase such antibodies on commercially reasonable terms for the clinical trials and their availability for the commercialized product, if approved.~~

We also plan to expand the use of our ACTR platform in combination with one or more other antibodies that have not yet been approved for marketing by the FDA or similar regulatory authorities outside of the United States, as planned with our product candidate ACTR087 used in combination with~~SEA-BCMA~~ in adult patients with r/r multiple myeloma. Our ability to develop product candidates using unapproved antibodies will rely on our ability to acquire such antibodies through partnerships or collaborations on commercially reasonable terms. However, we cannot be certain that potential future collaborations will provide us with a steady supply of antibodies that we can utilize in combination with ACTR to develop future product candidates. If we are unable to enter into such strategic collaborations on commercially reasonable terms or fail to realize the benefits of any such collaboration, we may be limited to using approved antibodies in combination with ACTR087, ACTR707, or any other future ACTR construct we may develop.

We have entered into a collaboration agreement with Seattle Genetics, Inc. (Seattle Genetics), pursuant to which Seattle Genetics will generate antibodies against two target antigens to use in combination with ACTR T cells to develop future product candidates. Under the agreement, Seattle Genetics had the option to elect a third target antigen, but its option expired unexercised in June 2017. We cannot be certain that the collaboration agreement with Seattle Genetics will provide us with antibodies that we can successfully combine with ACTR T cells.

The failure to enter into a successful collaboration or the expense of purchasing an approved antibody may delay our development timelines, increase our costs and jeopardize our ability to develop ACTR087, ACTR707, or any other future ACTR construct we may develop as a commercially viable drug, which could result in delays in product development and harm our business.

~~ACTR therapies rely on the use of antibodies to target specific cancers, which the FDA may revoke approval for or may not approve, independent of the safety or efficacy of our ACTR T cells.~~

We have developed, are developing, and intend to develop product candidates using ACTR087 or ACTR707 used in combination with one or more currently approved antibodies, such as rituximab for r/r NHL and trastuzumab for HER2+ cancers. If the FDA or similar regulatory authorities outside of the United States revoke approval of any antibodies we use in combination with ACTR087, ACTR707 or any other future cell product candidates based on our ACTR platform, we will not be able to market any products made in combination with such revoked antibodies.

If safety or efficacy issues arise with any of these antibodies, we could experience significant regulatory delays, and the FDA or similar regulatory authorities outside of the United States may require us to redesign or terminate the applicable clinical trials. In addition, the approval of ACTR in combination with an antibody may require clinical trials to demonstrate the safety and efficacy of the therapeutic antibody on its own. If the antibodies we use in combination with ACTR087, ACTR707, or any other future ACTR construct we may develop are replaced as the standard of care for the indications we choose to target, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials. In addition, if manufacturing or other issues result in a shortage of supply of the antibodies with which we determine to combine with ACTR087, ACTR707, or any other future ACTR construct we may develop, we may not be able to complete clinical development of ACTR087, ACTR707, or any other future ACTR construct we may develop on our current timeline or at all.

Even if ACTR087, ACTR707, or any other future ACTR construct we may develop were to receive marketing approval or be commercialized for use in combination with other existing antibodies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of an antibody used in combination with ACTR087, ACTR707, or any other future ACTR construct we may develop, or

that safety, efficacy, manufacturing or supply issues could arise with these existing antibodies. Combination therapies are commonly used for the treatment of cancer, and we would be subject to similar risks, such as revocation of regulatory approval for one part of the combination therapy,if we develop any of our other product candidates for use in combination with other antibodies. This could result in our own products being removed from the market or being less successful commercially.

We also plan to consider ACTR087, ACTR707 or any other future product candidates based on our ACTR platform in combination with one or more other antibodies that have not yet been approved for marketing by the FDA or similar regulatory authorities outside of the United States, as planned with our product candidate ACTR087 used in combination with~~SEA-BCMA~~ in adult patients with r/r multiple myeloma. We will not be able to market and sell ACTR087, ACTR707 or any other future product candidates based on our ACTR platform in combination with any such unapproved antibodies that do not ultimately obtain marketing approval, either as a standalone or used in combination with our ACTR T cells. If the FDA or similar regulatory authorities outside of the United States determines that we need to demonstrate the separate safety or efficacy of the applicable antibodies, or if safety, efficacy, manufacturing, or supply issues arise with the antibodies we choose to evaluate in combination with ACTR087, ACTR707 or any other future ACTR construct we may develop, we may be unable to obtain approval of or market ACTR087, ACTR707 or any other future ACTR construct we may develop.

If the FDA or similar regulatory authorities outside of the United States revoke their approval or do not approve these other antibodies, or if safety, efficacy, manufacturing, or supply issues arise with the antibodies we choose to evaluate in combination with ACTR087, ACTR707 or any other future ACTR construct we may develop, we may be unable to obtain approval of or market ACTR087, ACTR707 or any other future ACTR construct we may develop.

We currently have no marketing and sales organization and have no experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if approved, we may not be able to generate product revenue.

~~We currently have no sales, marketing or distribution capabilities and have no experience in marketing products. We intend to develop anin-house~~ marketing organization and sales force, which will require significant capital expenditures, management resources and time. We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

If we are unable or decide not to establish internal sales, marketing and distribution capabilities, we will pursue collaborative arrangements regarding the sales and marketing of our products, if approved. For instance, if any~~co-developed~~ ~~products under our collaboration with Seattle Genetics are approved, we plan toco-commercialize~~ them with Seattle Genetics in the United States, and Seattle Genetics will commercialize them outside of the United States. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.

~~There can be no assurance that we will be able to developin-house~~ ~~sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product in the United States or overseas.~~

A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.

We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks and regulatory requirements related to operating in foreign countries if we obtain the necessary ~~approvals, including:~~

~~These and other risks~~approvals. Risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

~~We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.~~

The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our competitors may be able to develop other products or drugs that are able to achieve similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies and universities and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces. In addition, many of these competitors are active in seeking patent protection and licensing arrangements in anticipation of collecting royalties for use of technology that they have developed. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products. We believe the key competitive factors that will affect the development and commercial success of our product candidates are efficacy, safety, tolerability, reliability, convenience of use, price and reimbursement.

Specifically, by genetically engineering T cell products, we face significant competition in both the CAR technology and TCR space from multiple companies, including Kite Pharma, Inc. (a Gilead Sciences, Inc. company), Juno Therapeutics, Inc. (which was recently acquired by Celgene Corporation), Novartis AG, and bluebird bio, Inc. Even if we obtain regulatory approval of our product candidates, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances.

~~We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.~~

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel, including our Chief Executive Officer, our President and Chief Financial Officer, our Chief Scientific Officer, our Chief Medical Officer, and our Chief Technical Officer. The loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and an inability to find suitable replacements could result in delays in product development and harm our business.

We conduct our operations at our facility in Cambridge, Massachusetts. This region is headquarters to many other biopharmaceutical companies and many academic and research institutions. Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock options that vest over time. The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice. Although we have employment agreements with our key employees, these employment agreements provide for~~at-will~~ employment, which means that any of our employees could leave our employment at any time, with or without notice. We maintain a “key man” insurance policy on the life of our Chief Executive Officer, but do not maintain “key man” insurance on the lives of our other management personnel or the lives of any of our other employees. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior,~~mid-level~~ ~~and senior managers as well as junior,mid-level~~ ~~and senior scientific and medical personnel.~~

~~We will need to grow the size of our organization, and we may experience difficulties in managing this growth.~~

As of April 30, 2018, we had 51 employees. As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations. Future growth would impose significant added responsibilities on members of management, including:

Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from~~day-to-day~~ ~~activities in order to devote a substantial amount of time to managing these growth activities.~~

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services, including substantially all aspects of regulatory approval, clinical trial management and manufacturing. There can be no assurance that the services of independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, or we are not able to effectively build out new facilities to accommodate this expansion, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

We have entered into a strategic collaboration with Seattle Genetics and may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.

We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. In particular, we may seek to enter into collaborations to give us access to antibodies to use in combination with our ACTR platform. Any of these relationships may require us to incur~~non-recurring~~ and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business. For example, we entered into a collaboration agreement with Seattle Genetics pursuant to which Seattle Genetics has agreed to generate antibodies against two target antigens and we are responsible for creating ACTR T cells to pair with these antibodies to create combination product candidates. However, there are ways in which Seattle Genetics may elect to~~opt-out~~ from further development and commercialization of the resulting product candidates. If Seattle Genetics elects to exercise one of these options our timelines could be delayed and our business otherwise adversely affected, and we cannot be certain that we will achieve the revenue or specific net income that we anticipate.

In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy and obtain marketing approval.

~~Further, collaborations involving our product candidates are subject to numerous risks, which may include the following:~~

As a result, if we enter into additional collaboration agreements and strategic partnerships or license our product candidates, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Any delays in entering into new collaborations or strategic partnership agreements related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business prospects, financial condition, and results of operations.

~~If we fail to obtain additional financing, we may be unable to complete the development and commercialization of our product candidates.~~

Our operations have consumed substantial amounts of cash since inception. As of March 31, 2018, we had working capital of $12.3 million and capital resources consisting of cash and cash equivalents of $25.7 million. We expect to continue to spend substantial amounts to continue the clinical development of our product candidates, including our current and planned clinical trials for ACTR087 used in combination with rituximab and ACTR707 used in combination with rituximab. If approved, we will require significant additional amounts in order to launch and commercialize our product candidates.

We believe that our existing cash, cash equivalents, and marketable securities as of March 31, 2018, along with the net proceeds from the IPO and the concurrent private placement will enable us to fund our operating plan through December 2019, without considering available borrowings under our loan and security agreement. Our operating plan includes our efforts to advance ACTR087 used in combination with rituximab for adult patients with r/r B cell~~non-Hodgkin~~ ~~lymphoma through the completion of our ongoing Phase I clinical trial; to fund a Phase II clinical trial of ACTR087 used in combination with rituximab for adult patients with r/rnon-Hodgkin~~ ~~lymphoma who received prior CD19CAR-T~~ ~~therapy; to advance ACTR707 used in combination with rituximab for adult patients with r/r B cellnon-Hodgkin~~ lymphoma through the completion of our Phase I clinical trial; to advance ACTR707 used in combination with trastuzumab through submission of an IND and to fund our Phase I clinical trial for this product candidate; and to develop product candidates in earlier stages of development and any additional product candidates that we select, to expand headcount and internal capabilities, and for working capital and other general corporate purposes. However, we know that our existing cash, cash equivalents, and marketable securities, and our available borrowings under our loan and security agreement, even with the proceeds of our IPO and the concurrent private placement, will not be sufficient to complete our planned Phase II clinical trial of ACTR087 used in combination with rituximab for adult patients with r/r~~non-Hodgkin~~ ~~lymphoma who received prior CD19CAR-T~~ therapy or our planned Phase I clinical trial of ACTR707 used in combination with trastuzumab for patients with HER2+ cancers, and we will need to raise additional funds to complete these trials. Additionally, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may require additional capital for the further development and commercialization of our product candidates and may need to raise additional funds sooner if we choose to expand more rapidly than we presently anticipate.

We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives. Our license agreements may also be terminated if we are unable to meet the payment obligations under the agreements. We could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

~~Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.~~

~~Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.~~

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

Our internal computer systems, or those used by our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of the development programs of our product candidates.

Despite the implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, and telecommunication and electrical failures. While we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on third parties for the manufacture of our product candidates and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed.

~~Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.~~

Our operations, and those of our CROs, commercial manufacturing organizations (CMOs), and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or~~man-made~~ disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce and process our product candidates on a~~patient-by-patient~~ ~~basis. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by aman-made~~ ~~or natural disaster or other business interruption.~~

Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to: comply with the regulations of the FDA and other similar foreign regulatory bodies, provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies, comply with manufacturing standards we have established, comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws or report financial information or data accurately or to disclose unauthorized activities to us. If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws and regulations will increase significantly, and our costs associated with compliance with such laws and regulations are also likely to increase. These laws may

impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. The laws that may affect our ability to operate include, but are not limited to:

~~Additionally, we are subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless of the payor.~~

Upon the closing of the IPO, we adopted a code of business conduct and ethics, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless

The current pandemic of the ~~merits~~novel coronavirus, or ~~eventual outcome, liability claims may result in:~~

Failure to obtain or retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with corporate collaborators. Although we have clinical trial insurance, our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

~~Comprehensive tax reform legislation could adversely affect our business and financial condition.~~

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (TCJA) that significantly reforms the Internal Revenue Code of 1986, as amended. The TCJA, among other things, contains significant changes

to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%; limitation of the tax deduction for interest expense; limitation of the deduction for net operating losses and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); and modifying or repealing many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs”. The tax rate change resulted in (i) a reduction in the gross amount of our deferred tax assets recorded as of December 31, 2017, without an impact on the net amount of our deferred tax assets, which are recorded with a full valuation allowance, and (ii) no income tax expense or benefit being recognized as of the enactment date of the TCJA. We continue to examine the impact this tax reform legislation may have on our business. However, the effect of the TCJA on us and our affiliates, whether adverse or favorable, is uncertain and may not become evident for some period of time. You are urged to consult your tax adviser regarding the implications of the TCJA on an investment in our common stock.

~~Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.~~

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its~~pre-change~~ ~~net operating loss carryforwards and otherpre-change~~ tax attributes to offset its post-change taxable income may be limited. As a result of our most recent private placements, IPO, and other transactions that have occurred over the past three years, we may have experienced, an “ownership change.” We may also experience ownership changes in the future ~~as a result~~outbreak of ~~subsequent shifts in~~other highly infectious or contagious diseases, could seriously harm our ~~stock ownership. As of December 31, 2017, we had U.S. federal net operating loss carryforwards of $29.8 million~~development efforts, increase our costs and ~~U.S. federal research~~expenses and development tax credit carryforwards of $2.7 million, which could be limited if we experience an “ownership change.” The reduction of the corporate tax rate under the TCJA may cause a reduction in the economic benefit of our net operating loss carryforwards and other deferred tax assets available to the us. Under the TCJA, net operating losses generated after December 31, 2017 will not be subject to expiration.

~~The terms of our loan and security agreement may restrict our ability to engage in certain transactions and subject our assets to collateralization.~~

In January 2017, we entered into a loan and security agreement with Pacific Western Bank (PWB). Pursuant to the terms of the loan and security agreement, subject to certain exceptions, we cannot engage in certain transactions without PWB’s prior written consent, which shall not be unreasonably withheld. Such transactions include:

If PWB does not provide its consent to such actions, we could be prohibited from engaging in transactions that could be beneficial to our business and our stockholders unless we were to repay the loans, which may not be desirable or possible. The loan and security agreement is collateralized by a pledge of substantially all of our assets, except for our intellectual property. If we were to default under the loan and security agreement, including for an inability to repay amounts as they become due, and we were unable to obtain a waiver for such a default, PWB would have a right to accelerate our obligation to repay the entire loan and foreclose on these assets in order to satisfy our obligations under the loan and security agreement. In addition, PWB would also have the right to place a hold on our accounts maintained at PWB and refuse to fund any then unfunded commitments under the loan and security agreement. Any such action on the part of PWB against us could have a materiallymaterial adverse ~~impact~~effect on our business, financial condition and results of operations.

~~Unstable market~~The extent to which the COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious diseases, impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of such pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic ~~conditions~~effects of the pandemic and containment measures, among others. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic has already affected and may ~~have serious adverse consequences on~~continue to adversely affect our business, financial condition and ~~stock price.~~results of operations, including the below:

We currently rely and for the foreseeable future will continue to rely on third parties to conduct our clinical ~~trials.~~trials and to assist with various research and discovery activities. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates or discover new product candidates.

We depend and will depend upon independent investigators and collaborators, such as medical institutions, ~~CROs, CMOs~~contract research organizations (“CROs”), commercial manufacturing organizations (“CMO”s) and strategic partners to conduct our preclinical studies and clinical trials under agreements with us. ~~We expect to have to negotiate budgets and contracts with CROs, trial sites and CMOs which may result in delays to our development timelines and increased costs.~~ We will rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their activities. As a result, we have less direct control over the conduct, timing and completion of these clinical trials and the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties are required to comply with good clinical practices ~~(GCPs)~~(“GCP”s), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development. ~~Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.~~ If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. ~~We cannot assure you that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the GCP regulations.~~ In addition, ~~our clinical trials must be conducted with biologic product produced under current good manufacturing practices (cGMP) regulations and will require a large number of test patients. Our~~ failure or any failure by these third parties ~~to comply with these regulations or~~ to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

Any third parties conducting our clinical trials are not and will not be our employees and, except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our ongoing, clinical and~~non-clinical~~ ~~product candidates.~~ These third parties may also have

relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf.

If ~~these third parties do not successfully carry out their contractual duties or~~any CMO with whom we contract fails to perform its obligations, or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trialswe may be ~~extended, delayed~~forced to manufacture the materials ourselves, for which we may not have the capabilities or ~~terminated and~~resources, or enter into an agreement with a different CMO, which we may not be able to ~~complete development~~do on reasonable terms, if at all. In either scenario, our clinical trials supply could be delayed significantly as we establish alternative supply sources. In some cases, the technical skills required to manufacture our products or product candidates may be unique or proprietary to the original CMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all. Furthermore, a CMO may possess technology related to the manufacture of our product candidate that such CMO owns independently. This would increase our reliance on such CMO or require us to obtain ~~regulatory approval of or successfully commercialize~~a license from such CMO in order to have another CMO manufacture our product candidates. ~~As a result,~~In addition, changes in manufacturers often involve changes in manufacturing procedures and processes, which could require that we conduct bridging studies between our ~~financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.~~

~~Switching or adding third parties to conduct~~prior clinical supply used in our clinical trials ~~involves substantial cost~~ and ~~requires extensive management time and focus. In addition, there is a natural transition period when a~~that of any new manufacturer. We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials.

We also rely on third party ~~commences work. As a result, delays occur, which can materially~~vendors and collaborators to support our research and discovery efforts and to help expand our drug candidate pipeline, including certain third parties located in China, and we expect to continue to use such third parties. A natural disaster, epidemic or pandemic disease outbreaks, including the COVID-19 pandemic, trade war, political unrest or other local events could disrupt the business or operations of these third parties and thus negatively impact our ~~ability~~research and discovery capabilities.

We contract with third parties for the manufacture of our drug candidates for preclinical development and clinical trials. This reliance on third parties increases the risk that we will not have sufficient quantities of our drug candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We do not currently own or operate any manufacturing facilities. We rely, and expect to ~~meet our desired clinical development timelines.~~

~~We expect~~continue to rely, on third parties tofor the manufacture of our drug candidates for preclinical development and clinical ~~product supplies,~~testing, as well as for the commercial manufacture of our current and ~~we may rely~~future drugs. This reliance on third parties ~~for at least a portion of~~increases the ~~manufacturing process of our product candidates, if approved. Our business could be harmed if those third parties fail to provide us with~~risk that we will not have sufficient quantities of ~~clinical product supplies or product~~our drug candidates or ~~fail~~such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

We do not have long-term supply agreements with our contract manufacturers, and purchase our required drug supply, including the API and drug product used in our drug candidates, on a purchase order basis with certain contract manufacturers. In addition, we may be unable to establish or maintain any agreements with third-party manufacturers or to do so aton acceptable ~~quality levels or prices.~~

~~We do~~terms. Even if we are able to establish and maintain agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks. In addition, our drug candidates may compete with other drug candidates for access to manufacturing facilities. As a result, we may not ~~currently own any facility that may be used as our clinical-scale manufacturing and processing facility and must currently rely on outside vendors~~obtain access to ~~manufacture supplies and process our product candidates, which is and will need to be done~~these facilities on a~~patient-by-patient~~ ~~basis. We have not yet caused our product candidates to be manufactured~~ priority basis or ~~processed on a commercial scale and may not be able to do so for any of our product candidates.~~

Although in the future we do intend to develop our own manufacturing facility, we also intend to use third parties as part of our manufacturing process and may, in any event, never be successful in developing our own manufacturing facility. Our anticipated reliance onat all. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

For our other potential products, if we are not able to negotiate commercial supply terms with any such third-party manufacturers, ~~exposes us to the following risks:~~

~~Each of these risks could delay or prevent the completion~~adversely affect supplies of our ~~clinical trials~~products. Third-party manufacturers’ failure to achieve and maintain high manufacturing standards, in accordance with applicable regulatory requirements, or the ~~approval~~incidence of any of our product candidates by the FDA, result in higher costs or adversely impact commercialization of our product candidates. In addition, we will rely on third parties to perform certain specification tests on our product candidates prior to delivery to patients. If these tests are not appropriately done and test data are not reliable, patients could be put at risk of serious harm and the FDA could place significant restrictions on our company until deficiencies are remedied.

~~The manufacture of biological drug products is complex and requires significant expertise and capital investment, including the development of advanced~~ manufacturing ~~techniques and process controls.~~

Manufacturers of biologic products often encounter difficulties in production, particularly in scaling up or out, validating the production process and assuring high reliability of the manufacturing process (including the absence of contamination). These problems include logistics and shipping, difficulties with production costs and yields, quality control, including stability of the product, product testing, operator error and availability of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability failures or other issues relating to the manufacture of our product candidates will not occur in the future.

We may fail to manage the logistics of collecting and shipping patient material to the manufacturing site and shipping the product candidate back to the patient. Logistical and shipment delays and problems caused by us, our vendors or other factors not in our control, such as weather, could prevent or delay the delivery of product candidates to patients. Additionally, we have to maintain a complex chain of identity and chain of custody with respect to patient material as it moves to the manufacturing facility, through the manufacturing process and back to the patient. Failure to maintain chain of identity and chain of custodyerrors, also could result in patient injury or death, product shortages, delays or failures in product testing or delivery, cost overruns, or other problems that could seriously harm our business. Third-party manufacturers often encounter difficulties involving production yields, quality control, and quality assurance, as well as shortages of qualified personnel.

The third parties upon whom we rely for the supply of the API and drug product used in bezuclastinib are our sole source of supply, and the loss of any of these suppliers could significantly harm our business.

~~In addition, because~~used in bezuclastinib are currently supplied to us from single-source suppliers. Our ability to successfully develop our ~~product~~drug candidates ~~are all based upon the ACTR construct, any problems we encounter with manufacturing the ACTR construct would likely affect all of~~and supply our ~~products, if approved, and product~~drug candidates ~~increasing the impact of any manufacturing issues we encounter and potentially adversely affecting~~for clinical trials, depends in part on our ability to ~~attain~~obtain the API and drug product for these drugs in accordance with regulatory requirements and in sufficient quantities for clinical testing. We will need to enter into arrangements to establish redundant or ~~maintain profitable operations.~~

~~ACTR therapies rely~~second-source supply of some of the API and drug product. If any of our suppliers ceases its operations for any reason or is unable or unwilling to supply API or drug product in sufficient quantities or on the ~~availability of specialty raw materials, which may not be available~~timelines necessary to ~~us on acceptable terms or at all.~~

ACTR requires many specialty raw materials, some of which are manufactured by small companies with limited resources and experience to support a commercial product. In addition, those suppliers normally support blood-based hospital businesses and generally do not have the capacity to support commercial products manufactured under cGMP by biopharmaceutical firms. The suppliers may be~~ill-equipped~~ ~~to support~~meet our needs, ~~especially innon-routine~~ ~~circumstances like an~~including as a result of the COVID-19 pandemic, it could significantly and adversely affect our business, the supply of our current or future drug candidates or any future approved drugs and our financial condition.

For bezuclastinib and any other product candidates, we intend to identify and qualify additional manufacturers to provide such API and drug product prior to submission of a New Drug Application (“NDA”) to the FDA ~~inspection~~ and/or ~~medical crisis, such as widespread contamination.~~a Marketing Authorization Application (“MAA”) to the EMA. We ~~also do~~are not ~~have contracts with many of these~~certain, however, that our single-source suppliers ~~and may not~~will be able to ~~contract with them on acceptable terms or at all. Accordingly, we may experience delays in receiving key raw materials to support clinical or commercial manufacturing.~~

~~In addition, some~~meet our demand for their products, either because of the nature of our ~~raw materials are currently available from~~agreements with those suppliers, our limited experience with those suppliers or our relative importance as a ~~single supplier, or a small number~~customer to those suppliers. It may be difficult for us to assess their ability to timely meet our demand in the future based on past performance and they may subordinate our needs in the future to their other customers.

While we seek to maintain adequate inventory of ~~suppliers. The type of cell culture media~~the API and ~~cryopreservation buffer that we currently use in our manufacturing~~

~~process for ACTR087 and ACTR707 are each only available from a single supplier. In addition, the cell processing equipment and tubing that we use~~drug product used in our current ~~manufacturing process is only available~~or future drug candidates and any future approved drugs, any interruption or delay in the supply of components or materials, or our inability to obtain such API and drug product from a single supplier. We also use certain biologic materials, including certain activating antibodies, that are available from multiple suppliers, but each version may perform differently, requiring us to characterize them and potentially modify some of our protocols if we change suppliers. We cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to produce these materials for our intended purpose. Accordingly, if we no longer have access to these suppliers, we may experience delays in our clinical or commercial manufacturing which could harm our business or results of operations.

~~If our third-party manufacturers use hazardous and biological materials~~alternate sources at acceptable prices in a timely manner ~~that causes injury~~could impede, delay, limit or ~~violates applicable law, we may be liable for damages.~~

~~Our research and~~prevent our development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials, by our third-party manufacturers. Our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials. Although we believe that our manufacturers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance for liabilities arising from medical or hazardous materials. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, ~~prospects,~~results of operations, financial condition ~~or results of operations.~~and prospects.

Risks Related to ~~Government Regulation~~Regulatory Approval of Our Drug Candidates and Other Legal Compliance Matters

The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our product candidates.

We currently have ~~not previously submitted a Biologics License Application (BLA)~~one drug candidate in clinical development and its risk of failure is high. We are unable to ~~the FDA~~predict when or ~~similar~~if any of our drug candidates will prove effective or safe in humans or will obtain marketing approval. Before obtaining marketing approval applications to comparable foreign authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish the product candidate’s safety, purity and potency for each desired indication. The BLA must also include significant information regarding the manufacturing controlsfrom regulatory authorities for the ~~product. We expect~~sale of any drug candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the ~~novel nature~~safety and efficacy of our ~~product~~drug candidates in humans.

While bezuclastinib is a highly potent and selective KIT D816V inhibitor that is being developed to ~~create further challenges in obtaining regulatory approval. For example, the FDA has no experience~~treat SM and GIST patients, we may find that patients treated with ~~commercial development of ACTR therapies for cancer. Accordingly, the regulatory approval pathway for~~bezuclastinib have or develop mutations that confer resistance to treatment. If patients have or develop resistance to treatment with our ~~product~~drug candidates, we may be ~~uncertain, complex, expensive~~unable to successfully complete our clinical trials, and ~~lengthy, and approval~~ may not be ~~obtained.~~able to obtain regulatory approval of, and commercialize, our drug candidates.

~~We may also~~Our product development costs will increase if we experience delays in ~~completing~~preclinical studies or clinical trials or in obtaining marketing approvals. We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to obtain marketing approval or commercialize our drug candidates. We may utilize companion diagnostics in our planned clinical trials in the future in order to identify appropriate patient populations for our drug candidates. If a ~~variety of reasons, including delays related to:~~

~~For example, we are advancing towards testing in an expanded patient cohort using an optimized dose of ACTR087 in Phase I of our ongoingATTCK-20-2~~ ~~trial. Patient enrollment in this expansion cohort is subject to obtaining IRB approval at each clinical trial site, and no assurances can be made that IRB approval will be obtained.~~

We could also experience delays if physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials of our product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles. Further, a clinical trial may be suspended or terminated by us, the IRBs for the institutions in which such trials are being conducted, the Data Monitoring Committee for such trial, or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If we experience termination of, or delays in the completion of, any clinical trial of our product candidates, the commercial prospects for our product candidates will be harmed, and our ability to generate product revenue will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenue.

~~Securing~~ regulatory approval ~~also requires~~requirements. The process of obtaining or creating such diagnostic is time consuming and costly.

Regulatory authorities, including the submission of information about the biologic manufacturing process and inspection of manufacturing facilities by the relevant regulatory authority. FDA or comparable foreign regulatory authorities may fail to approve our manufacturing processes or facilities, whether run by us or our CMOs. In addition, if we make manufacturing changes to our product candidates in the future, we may need to conduct additional preclinical studies to bridge our modified product candidates to earlier versions.

~~Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.~~

~~The~~ FDA, may disagree with our regulatory plan and we may fail to obtain regulatory approval of our product candidates.

We ~~plan to continue to advance~~are conducting clinical trials with our lead product ~~candidates, ACTR087 used~~candidate, bezuclastinib, in ~~combination with rituximab and ACTR707 used in combination with rituximab, for the treatment of adult~~ patients with r/r NHL through Phase I clinical trials. If we believe the Phase I data from either trial is compelling, we plan to discuss with the FDA the potential to move to a registration trial in r/r NHL upon completion of the current Phase I clinical trial. Additionally, we plan to submit regulatory filings to enable a Phase II clinical trial in 2018 to evaluate ACTR087 used in combination with rituximab in adult patients with r/r NHL who received prior CD19~~CAR-T~~ therapy. However, the general approach for FDA approval of a new biologic or drug is dispositive data from two well-controlled, Phase III clinical trials of the relevant biologic or drug in the relevant patient population. Phase III clinical trials typically involve hundreds of patients, have significant costsGIST, AdvSM and ~~take years to complete.~~NonAdvSM. The FDA may not ~~believe~~agree with our ~~accelerated approval strategy to move directly to a~~regulatory plans for initial registration ~~trial for ACTR087 used~~of bezuclastinib in ~~combination with rituximab in r/r NHL upon completion~~some or all of ~~the current Phase I clinical trial is warranted~~these indications and may require ~~a Phase III~~additional clinical ~~trial or~~ trials to be conducted prior to approval.

In addition, our product candidates could fail to receive regulatory approval for many reasons, including ~~the following:~~

Any of these factors, many of which are beyond our control, may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

We may also submit marketing applications in other countries. ~~Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions.~~ Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

~~Even if~~If we ~~receive~~are unable to successfully develop companion diagnostic tests for our drug candidates that require such tests, or experience significant delays in doing so, we may not realize the full commercial potential of these drug candidates.

We may develop, either by ourselves or with collaborators, in vitro companion diagnostic tests for our drug candidates for certain indications. To be successful, we or our collaborators will need to address a number of scientific, technical, regulatory, ~~approval of our product candidates, we~~and logistical challenges. The FDA regulates in vitro companion diagnostics as medical devices that will likely be subject to ~~ongoing~~clinical trials in conjunction with the clinical trials for our drug candidates, and which will require regulatory ~~obligations~~clearance or approval prior to commercialization. We may rely on third parties for the design, development, and ~~continued regulatory review, which may result~~manufacture of companion diagnostic tests for our therapeutic drug candidates that require such tests. If these parties are unable to successfully develop companion diagnostics for these therapeutic drug candidates, or experience delays in ~~significant additional expense and we~~doing so, the development of these therapeutic drug candidates may be ~~subject to penalties if we fail to comply with regulatory requirements~~adversely affected or ~~experience unanticipated problems with our product candidates.~~

~~Any regulatory approvals that we receive for our product candidates will require surveillance to monitor the safety and efficacy of the product candidate. The FDA~~ may also require a risk evaluation and mitigation strategy in order to approve our product candidates, which could entail requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems with our product

candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not ~~able to maintain regulatory compliance, we may lose any~~obtain marketing approval, ~~that we may have obtained~~ and we may not ~~achieve or sustain profitability.~~

~~In addition, if we were able to obtain accelerated approval of ACTR087 or ACTR707 usedin combination with an antibody,~~realize the FDA would require us to conduct a confirmatory study to verify the predicted clinical benefit and additional safety studies. The results from the confirmatory study may not support the clinical benefit, which would result in the approval being withdrawn.

Even if we obtain regulatory approval of our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community.

~~The use of engineered T cells as a~~full commercial potential cancer treatment is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers and others in the medical community. Various factors will influence whether our product candidates are accepted in the market, including:

In addition, although we are not utilizing embryonic stem cells or replication competent vectors, adverse publicity due to the ethical and social controversies surrounding the therapeutic use of such technologies, and reported side effects from any clinical trials using these technologies or the failure of such trials to demonstrate that these therapies are safe and effective may limit market acceptance of our product candidates. If our product candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue.

~~In addition, although our ACTR platform differs in certain ways from theCAR-T~~ ~~approach, serious adverse events or deaths in other clinical trials involvingCAR-T~~ ~~or other T cell products or with use of approvedCAR-T~~ products, even if not ultimately attributable to the relevant product or product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates.35

Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.

Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our product candidates, if approved, profitably.

In both domestic and foreign markets, successful sales of our product candidates, if approved, will depend on the availability of adequate coverage and reimbursement from third-party payors. In addition, because our product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue from our product candidates.

Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and treatments they will cover and the amount of reimbursement. Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is:

Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data for the use of our products. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require~~co-payments~~ that patients find unacceptably high. Patients are unlikely to use our product candidates unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our product candidates.

In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.

We intend to seek approval to market our product candidates in both the United States and in selected foreign jurisdictions. If we obtain approval in one or more foreign jurisdictions for our product candidates, we will be subject to rules and regulations in those jurisdictions. In some foreign countries, particularly those in the European Union, the pricing of biologics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate. In addition, market acceptance and sales of our product candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for our product candidates and may be affected by existing and future healthcare reform measures.

Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that could impact our ability to sell our products profitably. In particular, in 2010, the Affordable Care Act was enacted. The Affordable Care Act and its implementing regulations, among other things, revised the methodology by which rebates owed by manufacturers to the state and federal government for covered outpatient drugs and certain biologics, including our product candidates, under the Medicaid Drug Rebate Program are calculated, increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected manufacturers to new annual fees and taxes for certain branded prescription drugs and provided incentives to programs that increase the federal government’s comparative effectiveness research.

Members of the United States Congress and the Trump Administration have expressed an intent to pass legislation or adopt executive orders to fundamentally change or repeal parts of the Affordable Care Act. While Congress has not passed repeal legislation to date, the 2017 Tax Reform Act includes a provision repealing the individual insurance coverage mandate included in the Affordable Care Act, effective January 1, 2019. Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the Affordable Care Act to waive, defer, grant exemptions from, or delay the implementation of any provision of the Affordable Care Act that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. On October 13, 2017, President Trump signed an Executive Order terminating the cost-sharing subsidies that reimburse insurers under the Affordable Care Act. Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017. In addition, the Centers for Medicare & Medicaid Services (CMS) within the U.S. Department of Health and Human Services has recently proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the Affordable Care Act for plans sold through such marketplaces. There may be further changes to the Affordable Care Act as a result of new legislation or further executive, administrative or judicial action.

Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the ATRA), which delayed for another two months the budget cuts mandated by these sequestration provisions of the Budget Control Act of 2011. In March 2013, the President signed an executive order implementing sequestration, and in April 2013, the 2% Medicare payment reductions went into effect. The ATRA also, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

The impact of ~~recent~~ healthcare ~~reform~~ legislation and other changes in the healthcare industry and in healthcare spending on us is currently unknown, and may adversely affect our business model.

Our revenue prospects could be affected by changes in healthcare spending and policy in the United States and abroad. We operate in a highly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to healthcare availability, the method of delivery or payment for healthcare products and services could negatively impact our business, operations and financial condition.

There ~~have~~has been ~~and likely will continue to be,~~increasing legislative and ~~regulatory proposals at~~enforcement interest in the ~~foreign,~~United States with respect to specialty drug pricing practices. In fact, both the federal and state ~~levels directed at broadening~~governments in the ~~availability of healthcare~~United States and ~~containing~~foreign governments continue to propose and pass new legislation, regulations, and policies affecting coverage and reimbursement rates, which are designed to contain or ~~lowering~~reduce the cost of ~~healthcare. We~~health care. Further federal and state proposals and healthcare reforms are likely, which could limit the prices that can be charged for the product candidates that we develop and may further limit our commercial opportunity. There may be future changes that result in reductions in potential coverage and reimbursement levels for our product candidates, if approved and commercialized, and we cannot predict the ~~initiatives~~scope of any future changes or the impact that those changes would have on our operations. Any reduction in reimbursement from Medicare and other government programs may ~~be adopted~~result in ~~the future, including repeal, replacement or significant revisions to the Affordable Care Act.~~ a similar reduction in payments from private payors.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely ~~affect:~~affect us.

~~Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability.~~

Regulatory requirements in the United States and abroad governing gene therapy products have changed frequently and may continue to change in the future, which could negatively impact our ability to complete clinical trials and commercialize our product candidates in a timely manner, if at all.

~~Regulatory requirements in the United States and abroad governing gene therapy products have changed frequently and may continue to change in the future.~~ FDA has established the Office of Tissues and Advanced Therapies within its Center for Biologics Evaluation and Research to consolidate the review of gene therapy and related products, and has established the Cellular, Tissue and Gene Therapies Advisory Committee, among others, to advise this review. Prior to submitting an IND, because of our use of a viral vector for our ACTR T cells, our clinical trials are subject to review by the NIH Office of Biotechnology Activities’ (OBA’s) Recombinant DNA Advisory Committee (RAC). As of April 2016, the updated NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules provide the opportunity for one or more oversight bodies, including Institutional Biosafety Committees, to request a public RAC review based on their own review of the protocol and NIH requirements. Regardless of the request for public review, the NIH makes its own assessment as to whether the protocol would significantly benefit from a public RAC review. The RAC’s recommendations are shared with FDA and the oversight bodies. The RAC can delay the initiation of a clinical trial, even if FDA has reviewed the trial design and details and has not objected to its initiation or has notified the sponsor that the study may begin. Conversely, FDA can put an IND on a clinical hold even if the RAC has provided a favorable review or has recommended against an~~in-depth,~~ public review. Moreover, under guidelines published by the NIH, patient enrollment in our gene therapy clinical trials cannot begin until, among other things, the investigator for that clinical trial has received a letter from the OBA indicating that the protocol registration process has been completed. Upon receipt of the letter from OBA confirming completion of protocol registration the investigator may obtain final approval from the oversight bodies and patient enrollment may begin if all other applicable regulatory authorizations have been obtained.

If there is a public RAC review, the receipt of the final recommendation letter concludes the protocol registration process and then oversight body, or bodies, approval can be issued. In addition, adverse developments in clinical trials of~~CAR-T~~ ~~products conducted by others may cause FDA or other oversight bodies to change the requirements for~~ approval of any of our product ~~candidates.~~

We face potential liability related to the privacy of health information we obtain from clinical trials sponsored by us.

~~These regulatory review committees~~Most healthcare providers, including research institutions from which we obtain patient health information, are subject to privacy and ~~advisory groups~~security regulations promulgated under HIPAA, as amended by the HITECH. We are not currently classified as a covered entity or business associate under HIPAA and thus are not directly subject to its requirements or penalties. However, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or conspiracy principles. Consequently, depending on the ~~new guidelines they promulgate~~facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information. In addition, we may ~~lengthen~~maintain sensitive personally identifiable information, including health information, that we receive throughout the ~~regulatory review~~clinical trial process, ~~require us to perform additional studies or trials, increase our development costs, lead to changes~~ in ~~regulatory positions and interpretations, delay or prevent approval and commercialization~~the course of our ~~product candidates~~ research collaborations, and directly from individuals (or their healthcare providers) who enroll in our patient assistance programs. As such, we may be subject to state laws requiring notification of affected individuals and state regulators in the event of a breach of personal information, which is a broader class of information than the health information protected by HIPAA.

Furthermore, certain health privacy laws, data breach notification laws, consumer protection laws and genetic testing laws may apply directly to our operations and/or ~~lead~~those of our collaborators and may impose restrictions on our collection, use and dissemination of individuals’ health information. Patients about whom we or our collaborators obtain health information, as well as the providers who share this information with us, may have statutory or contractual rights that limit our ability to ~~significant post-approval limitations or restrictions. As we advance our product candidates, we will be required to consult with these regulatory~~use and ~~advisory groups and comply with applicable guidelines. If we fail to do so, we~~disclose the information. We may be required to ~~delay~~expend significant capital and other resources to ensure ongoing compliance with applicable privacy and data security laws. Claims that we have violated individuals’ privacy rights or ~~discontinue development of such product candidates. These additional processes may~~breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business. Additionally, we are subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless of the payor.

Our ability to use net operating losses and research and development credits to offset future taxable income may be subject to certain limitations.

In general, under Sections 382 and 383 of the Code, a ~~review~~corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses or tax credits, or NOLs or credits, to offset future taxable income or taxes. As a result of the shares issued in July 2020 related to the acquisition of Kiq and ~~approval process that~~the sale of Series A convertible preferred stock, the Company has experienced a change in ownership, as defined by Section 382. As a result of the ownership change, utilization of the federal and state net operating loss carryforwards and research and development tax credit carryforwards is ~~longer than we otherwise would~~subject to annual limitation under Section 382. Under Section 382, the annual limitation is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. This limitation resulted in the expiration of federal and state net operating loss carryforwards before utilization of $26.9 million and $79.5 million, respectively, and federal and state research and development tax credit carryforwards before utilization of $6.6 million and $2.0 million, respectively. We have ~~expected. Delays~~written off these gross deferred tax attributes, which were previously fully reserved for, in 2020. As of December 31, 2021, approximately $63.1 million and $3.0 million of federal and state net operating losses, respectively, as well as $10.6 million of future amortization for federal purposes, were subject to the July 6 limitation of $0.3 million per year. A second ownership change occurred in December 2020 as a result of ~~an increased or lengthier regulatory approval process or further restrictions on~~ the ~~development~~underwritten public offering of ~~our product candidates can be costly and could negatively impact our or our collaborators’ ability to complete clinical trials and commercialize our current and future product candidates~~common stock which resulted in a ~~timely manner, if at all.~~limitation of tax attributes generated from July 7, 2020 to December 1, 2020. The December 1, 2020 ownership change is not expected to have a material impact to the Company’s net operating loss carryforwards or research and development tax credit carryforwards as these net operating losses and tax credit carryforwards may be utilized, subject to annual limitation, assuming sufficient taxable income is generated before expiration.

We depend on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

We are dependent on patents,know-how and proprietary technology, both our own and licensed from others.

~~Under our collaboration agreement with Seattle Genetics for the development~~ In particular, bezuclastinib and ~~commercialization of novel therapies for cancer, we depend on a license from Seattle Genetics for use of their proprietary antibodies. Additionally, aspects of the ACTR technology~~other molecules are subject to a license from ~~St. Jude Children’s Research Hospital (St. Jude’s) and the National University of Singapore (NUS).~~

Plexxikon. We ~~are currently, and~~ expect in the future to be party to additional material license or collaboration agreements. ~~These agreements typically impose numerous obligations, such as diligence and payment obligations.~~ Any termination of ~~these~~our current or future licenses could result in the loss of significant rights and could harm our ability to commercialize our product candidates. These licenses do and future licenses may include provisions that impose obligations and restrictions on us. ~~For example, our license agreement with St. Jude’s and NUS imposes some limitations on our ability to assign the license to a party other than an affiliate.~~ This could delay or otherwise negatively impact a transaction that we may wish to enter into.

Disputes may also arise between us and our licensors regarding intellectual property subject to a license ~~agreement, including:~~

agreement. If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license, as we are for intellectual property that we own, which are described below. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize products could suffer.

We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.

Presently we have rights to certain intellectual property, through licenses from third parties and under patent applications that we own or will own, related to bezuclastinib , and certain other product candidates. Because additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights. Our product candidates may also require specific formulations to work effectively and efficiently and these rights may be held by others. Similarly, efficient production or delivery of our product candidates may also require specific compositions or methods, and the rights to these may be owned by third parties. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology.

If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our market.

We rely upon a combination of patents, confidentiality agreements, trade secret protection and license agreements to protect the intellectual property related to our technologies. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.

Currently, ~~with the exception of one European patent obtained~~we have patents issued from ourin-licensed ~~patent~~ portfolio nounder our license agreement with Plexxikon. in multiple territories, including but not limited to, Australia, Canada, China, Colombia, Europe (validated in Germany, Spain, France, Great Britain, Italy, the Netherlands, as well as various other ~~patents~~EU countries), Hong Kong, India, Indonesia, Israel, Japan, Mexico, New Zealand, Peru, the Philippines, Republic of Korea, Russia, Singapore, South Africa, Taiwan, and the United States. We also have ~~issued from the~~ patent applications ~~that we own orin-license.~~pending in Brazil, Egypt and the United States. We anticipate additional patent applications will be filed both in the United States and in other countries, as appropriate. ~~However, we cannot predict:~~

Composition of matter patents for biological and pharmaceutical products, such as ACTR-based product candidates, are generally considered to be the strongest form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. We cannot be certain that the claims in our pending patent applications covering composition of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office (USPTO), or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered patentable by courts in the United States or foreign countries. Method of use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products~~“off-label.”~~ ~~Althoughoff-label~~ ~~prescriptions may induce or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.~~

~~The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that we own orin-license~~ ~~may fail to~~ result in patents being issued ~~patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries. Even if the patents do successfully issue, third~~and granted.

Third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims. If the breadth or strength of protection provided by the patent applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates. Furthermore, for United States applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third-party or instituted by the USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. Various post grant review proceedings, such as inter partes review and post grant review, are available for any interested third party to challenge the patentability of claims issued in patents to us. While these post grant review proceedings have been used less frequently to invalidate biotech patents, they have been successful regarding other technologies, and these relatively new procedures are still changing, and those changes might affect future results.

~~In addition to the protection afforded by patents, we seek to rely on trade secret protection, confidentiality agreements, and license agreements to protect proprietaryknow-how~~ ~~that is not patentable, processes for which patents are difficult to enforce and any other elements of our product discovery and development processes that involve proprietaryknow-how,~~ information, or technology that is not covered by patents. Although we require all of our employees to assign their inventions to us, and require all of our employees, consultants, advisors and any third parties who have access to our proprietary~~know-how,~~ information, or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.

Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, reexamination, and post grant review proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.

Third parties may assert that we are employing their proprietary technology without authorization. Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement. If and when ACTR087 or another product candidate is approved by the FDA, a third party may then seek to enforce its patent by filing a patent infringement lawsuit against us. While we do not believe that any claims that could ~~otherwise~~ materially adversely affect commercialization of our product candidates, if approved, are valid and enforceable, we may be incorrect in this belief, or we may not be able to prove it in a litigation. ~~In this regard, patents issued in the U.S. by law enjoy a presumption of validity that can be rebutted only with evidence that is “clear and convincing,” a heightened standard of proof.~~ There may be third-party patents of which we are currently unaware with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe. In ~~addition,~~the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may ~~obtain patents in the future~~be impossible or require substantial time and ~~claim that use of our technologies infringes upon these patents. Moreover, we~~monetary expenditure.

We may fail to identify relevant patents or incorrectly conclude that a patent is invalid, not enforceable, exhausted, or not infringed by our activities. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, ~~constructs or~~ molecules used in or formed during the manufacturing process, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy or patient selection methods, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable. In either case, ~~such a license may not be available on commercially reasonable terms or at all. If~~if we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business.

Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Defense of these claims, regardless of their merit, could involve substantial litigation expense and would be a substantial diversion of employee resources

from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure. We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.

~~We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions andin-licenses.~~

Presently we have rights to certain intellectual property, through licenses from third parties and under patent applications that we own or will own, related to ACTR087, ACTR707, and certain other product candidates. Because additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire,~~in-license~~ ~~or use these proprietary rights. In addition, while we have patent rights directed to certain ACTR constructs we may not be able to obtain intellectual property to broad ACTR constructs.~~

Our product candidates may also require specific formulations to work effectively and efficiently and these rights may be held by others. Similarly, efficient production or delivery of our product candidates may also require specific compositions or methods, and the rights to these may be owned by third parties. We may be unable to acquire or~~in-license~~ ~~any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify. Even if we are able to obtain a license, it may benon-exclusive,~~ thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology. Moreover, the specific antibodies that will be used with our product candidates may be covered by the intellectual property rights of others.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates. More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that one or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. ~~In the event~~

An unfavorable outcome of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

~~Post-grant~~any post-grant proceedings, including interference proceedings, provoked by third parties or brought by the USPTO ~~may be necessary to determine the validity or priority of inventions with respect to our patents or those of our licensors. An unfavorable outcome~~ could result in a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Litigation or post-grant proceedings may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent, alone or with our licensors, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for~~non-compliance~~ ~~with these requirements.~~

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits,~~non-payment~~ ~~of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.~~

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO.

If we or one of our licensing partners initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. ~~Such mechanisms includere-examination,~~~~inter parties~~ ~~review, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).~~ Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business.

We are highly dependent on our key personnel, and if we are not successful in ~~U.S. patent law~~attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our inability or failure to successfully attract and retain qualified personnel, particularly at the management level, could ~~diminish the value of patents in general, thereby impairing~~adversely affect our ability to ~~protect~~execute our ~~products.~~

~~As is the case with other biopharmaceutical companies,~~business plan and harm our ~~success is heavily~~operating results. We are highly dependent on our management, scientific and medical personnel, including our Chief Executive Officer and President, our Chief Financial Officer, our Chief Technology Officer, our Chief Scientific Officer, our Chief Medical Officer and our Chief Legal Officer. The loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and an inability to find suitable replacements could result in delays in product development and harm our business.

Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel. Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice. The employment agreements with our key employees provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.

We have undergone significant growth across both locations over the past year and we may face challenges in managing our growth.

During the nine-months ended September 30, 2022, we increased our headcount from 77 to 121 full time employees through the expansion of our research, development, manufacturing and G&A infrastructure. To manage these organizational changes and growth, we must continue to enhance our operational, financial and management controls and systems, reporting systems and infrastructure, and policies and procedures. We may not be able to implement enhancements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls. We must also continue to recruit, train and retain qualified personnel and we may be unable to do so effectively. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our development timelines may be delayed, our ability to generate revenue could be reduced, and we may not be able to implement our business strategy.

Our business and operations could suffer in the event of system failures or unauthorized or inappropriate use of or access to our systems.

We are increasingly dependent on our information technology systems and infrastructure for our business. We collect, store and transmit sensitive information including intellectual property, ~~particularly patents. Obtaining~~proprietary business information and ~~enforcing patents~~personal information in connection with business operations. The secure maintenance of this information is critical to our operations and business strategy. Some of this information could be an attractive target of criminal attack or unauthorized access and use by third parties with a wide range of motives and expertise, including organized criminal groups, “hacktivists,” patient groups, disgruntled current or former employees and others. Cyber-attacks are of ever-increasing levels of sophistication, and despite our security measures, our information technology and infrastructure may be vulnerable to such attacks or may be breached, including due to employee error or malfeasance.

Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to damage or interruption from computer viruses, unauthorized or inappropriate access or use, natural disasters, pandemics (including COVID-19), terrorism, war, and telecommunication and electrical failures. Such events could cause interruption of our operations. For example, the loss of pre-clinical trial data or data from completed or ongoing clinical trials for our product candidates could result in delays in our regulatory filings and development efforts, as well as delays in the commercialization of our products, and significantly increase our costs. To the extent that any disruption, security breach or unauthorized or inappropriate use or access to our systems were to result in a loss of or damage to our data, or inappropriate disclosure of confidential or proprietary information, including but not limited to patient, employee or vendor information, we could incur notification obligations to affected individuals and government agencies, liability, including potential lawsuits from patients, collaborators, employees, stockholders or other third parties and liability under foreign, federal and state laws that protect the privacy and security of personal information, and the development and potential commercialization of our product candidates could be delayed.

We have incurred net losses in every year since our inception and anticipate that we will continue to incur net losses in the future.

We are a clinical-stage biopharmaceutical ~~industry involve both technological~~company with a limited operating history. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and ~~legal complexity,~~significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and ~~is therefore costly, time-consuming~~become commercially viable. We have no products approved for commercial sale and ~~inherently uncertain. In addition,~~have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception in March 2014. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

There can be no assurance that the product candidates under development by us will be approved for sale in the United States ~~continues to adapt to wide-ranging patent reform legislation~~or elsewhere. Furthermore, there can be no assurance that became effective starting in 2012. Moreover, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways thatif such products are approved, they will be successfully commercialized, which would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. Changes in the laws and regulations governing patents in other jurisdictions could similarly have an adverse effect on our ~~ability to obtain~~business prospects, financial condition and ~~effectively enforce our patent rights.~~

~~We have less robust foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.~~

~~Certain~~results of our key patent families (covering the ACTR087 construct) have been filed in the United States, as well as in numerous jurisdictions outside the United States, and we plan to similarly pursue subgeneric claims prior to expiration of applicable deadlines (including a patent family covering the ACTR707 construct). However, we have less robust intellectual property rights outside the United States, and, in particular, we may not be able to pursue generic coverage of the ACTR platform outside of the United States. Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Most of our patent portfolio is at the very early stage. We will need to decide whether and in which jurisdictions to pursue protection for the various inventions in our portfolio prior to applicable deadlines.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

~~We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.~~

We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors. These agreements generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, those agreements may not be honored and may not effectively assign intellectual property rights to us. Moreover, there may be some circumstances, where we are unable to negotiate for such ownership rights. Disputes regarding ownership or inventorship of intellectual property can also arise in other contexts, such as collaborations and sponsored research. If we are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be expensive and time consuming. If we were unsuccessful, we could lose valuable rights in intellectual property that we regard as our own.

~~We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.~~

We have received confidential and proprietary information from third parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees’ former employers or our consultants’ or contractors’ current or former clients or customers. Litigation may be necessary to defend against these claims.operation. Even if we ~~are successful~~succeed in ~~defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees. If we are not successful, we could lose access~~commercializing one or ~~exclusive access to valuable intellectual property.~~

~~Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.~~

~~The degree of future protection afforded by our intellectual property rights, whether owned orin-licensed,~~ is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practicemore of our ~~technology,~~product candidates, we ~~may not be able~~will continue to ~~fully exercise or extract value from our intellectual property rights. The following examples are illustrative:~~

~~Should any~~We will require substantial additional funding. If we fail to obtain additional financing when needed, or on attractive terms, we may be unable to complete the development and commercialization of ~~these~~our product candidates.

Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to continue the clinical and preclinical development of our product candidates, including our clinical trials for bezuclastinib. If approved, we will require significant additional amounts in order to launch and commercialize our product candidates. We cannot be certain that additional funding will be available on acceptable terms, or at all. Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives. Our license agreements may also be terminated if we are unable to meet the payment and other obligations under the agreements. We could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

Any of the above events ~~occur, they~~ could significantly harm our business, prospects, financial condition and results of ~~operation.~~operations and cause the price of our common stock to decline.

~~We do not know whether an~~An active ~~liquid, and orderly~~ trading market ~~will develop~~ for our common stock ~~or what~~may not be sustained.

Our common stock began trading on the ~~market price~~Nasdaq Global Select Market on March 29, 2018. Given the limited trading history and low volumes of our common stock, ~~will be and, as~~there is a ~~result, it may be difficult for you to sell your shares of our common stock.~~

~~Our IPO recently closed on April 3, 2018. Although our common stock has been listed on The Nasdaq Global Select Market,~~risk that an active trading market for our shares may ~~never develop or be sustained. You may~~ not be ~~able to sell your shares quickly or at~~sustained, which could put downward pressure on the market price if trading in shares of our common stock is not active. The initial public offering price for our common stock was determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the common stock. As a result of these and other factors, you may be unable to resell your shares of our common stock at or above your purchase price. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and ~~may impair~~thereby affect the ability of our ~~ability~~stockholders to ~~enter into strategic partnerships~~sell some or ~~acquire companies~~all of their shares at attractive prices, at the times and in the volumes that they would like to sell them, or ~~products by using our shares of common stock as consideration.~~at all.

The price of our stock may be volatile, and you could lose all or part of your investment.

The trading price of our common stock is likely to continue to be highly ~~volatile and~~volatile. Market prices for our common stock could be subject to wide fluctuations in response to various ~~factors, some of which are beyond our control, including limited trading volume. In addition to~~

~~the factors discussed in this “Risk Factors” section and elsewhere in this Quarterly Report on Form10-Q,~~ ~~these factors include:~~

factors. In addition, the stock market in general, and The Nasdaq Global Select Market and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. ~~Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.~~ If the market price of our common stock does not exceed your purchase price, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results, or financial condition.

~~We do not intend to pay dividends on our common stock, so any returns will be limited to the value of our stock.~~

We currently anticipate that we will retain future earnings for the development, operation, and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, pursuant to our loan and security agreement with PWB, we are prohibited from paying cash dividends without PWB’s prior written consent, and any future debt financing arrangement may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Any return to stockholders will therefore be limited to the appreciation of their stock, which may never occur.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.

Our executive officers, directors, and 5% stockholders beneficially owned approximately ~~61.1%~~56% of our ~~voting~~outstanding common stock as of ~~April 30, 2018.~~December 31, 2021. These stockholders will have the ability to influence us through this ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders may be able to control elections of our directors, amendments ofto our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that ~~you~~ may ~~feel are~~be in ~~your~~the best ~~interest as one~~interests of our stockholders.

~~We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.~~

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (JOBS Act) enacted in April 2012. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in this Quarterly Report on Form~~10-Q~~ and our periodic reports and proxy statements, and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years following the year in which we completed our IPO, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which requires the market value of our common stock that is held by~~non-affiliates~~ ~~to exceed $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1 billion innon-convertible~~ ~~debt during the prior three-year period.~~

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in this Quarterly Report on Form~~10-Q~~ and our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected to “opt out” of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance, or the application of existing guidance to changes in our business could significantly affect our financial position and results of operations.

~~We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.~~

As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, which will require, among other things, that we file with the Securities and Exchange Commission (the SEC), annual, quarterly, and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and The Nasdaq Global Select Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas, such as “say on pay” and proxy access. Recent legislation permits emerging growth companies to implement many of these requirements over a longer period and up to five years from our IPO. We intend to take advantage of this new legislation but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. Stockholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition, and results of operations. The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as executive officers.

~~Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.~~

~~If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after thelock-up~~ and other legal restrictions on resale entered into during our IPO lapse, the trading price of our common stock could decline. Only the shares of common stock sold in the IPO, will be freely tradable without restriction in the public market. Morgan Stanley & Co. LLC and Cowen and Company, LLC, however, may, in their sole discretion, permit our officers, directors, and other stockholders who are subject to these~~lock-up~~ ~~agreements to sell shares prior to the expiration of thelock-up~~ ~~agreements.~~

~~Thelock-up~~ agreements will expire 180 days from the date of our IPO. In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our 2018 Stock Option and Incentive Plan (2018 Plan) will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the~~lock-up~~ agreements and Rule 144 and Rule 701 under the Securities Act of 1933, as amended (the Securities Act). If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

~~The holders of 13,646,028 shares of our common stock as of April 30, 2018, are entitled to rights with respect to the registration of their shares under the Securities Act, subject to the180-daylock-up~~ agreements described above. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.

Future sales and issuances of our common stock or rights to purchase common stock ~~including pursuant to our 2018 Plan,~~ could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital may be needed in the future to continue our planned operations, including conducting clinical trials, commercialization efforts, ~~expanded~~ research and development activities, and incurring costs associated with operating as a public company. To raise capital, we may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities, or other equity securities, investors may be materially diluted by ~~subsequent~~such sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences, and privileges senior to the holders of our common stock.

~~Pursuant to the 2018 Plan, our management is authorized to grant stock options to our employees, directors, and consultants.~~

The aggregate number of shares of our common stock that may be issued pursuant to stock awards under the 2018 Plan is 3,842,421 shares. The number of shares of our common stock reserved for issuance under the 2018 Plan shall be cumulatively increased on January 1, 2019 and each January 1 thereafter by 4% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year or a lesser number of shares determined by our board of directors. Unless our board of directors elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.

Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management.

Our amended and restated certificate of incorporation and amended and restated bylaws ~~which became effective upon our IPO and the concurrent private placement, contains~~contain provisions that could delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider favorable. ~~Some of these provisions include:~~

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire. Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or bylaws or any action asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

~~If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.~~41

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be~~re-evaluated~~ frequently. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. In connection with our IPO, we began the process of documenting, reviewing, and improving our internal controls and procedures for compliance with Section 404 of the Sarbanes-Oxley Act, which will require annual management assessment of the effectiveness of our internal control over financial reporting. We have begun recruiting additional finance and accounting personnel with certain skill sets that we will need as a public company.

Implementing any appropriate changes to our internal controls may distract our officers and employees, entail substantial costs to modify our existing processes, and take significant time to complete. These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business. In addition, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our stock price and make it more difficult for us to effectively market and sell our service to new and existing customers.

~~If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.~~

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

~~Set forth below is information regarding shares of equity securities sold, and options granted, by us during the three months ended March 31, 2018 that were not registered under the Securities Act.~~

In April 2018, upon the closing of our initial public offering, or IPO, all 20,771,850 shares of our then-outstanding redeemable convertible preferred shares were automatically converted into 13,229,362 common shares. The issuance of such common shares was exempt from the registration requirements of the Securities Act, pursuant to Section 3(a)(9) of the Securities Act, involving an exchange of securities exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. No underwriters were involved in this issuance of shares.

In March 2018, we issued an aggregate of 416,666 common shares, or the Private Placement Shares, to Seattle Genetics, Inc., which occurred concurrently with the IPO. The aggregate cash purchase price of the Private Placement Shares was $5.0 million, representing a price per share of $12.00, which was the same price at which shares were sold to the public in the IPO. The sale and issuance of the Private Placement Shares were not registered under the Securities Act or any state securities laws. We have relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and the rules and regulations promulgated thereunder relating to a transaction not involving any public offering to a single accredited investor and Rule 506(c) of Regulation D thereof. No underwriters were involved in this issuance of shares.

During the period between January 1, 2018 and March 31, 2018, we issued to certain of our employees, consultants and directors, options to purchase an aggregate of 777,071 shares of our common stock at an exercise price of $12.00 per share. We deemed these issuances to be exempt from registration under the Securities Act either in reliance on Rule 701 of the Securities Act as sales and offers under compensatory benefit plans and contracts relating to compensation in compliance with Rule 701, or in reliance on Section 4(a)(2), as transactions by an issuer not involving a public offering. All recipients either received adequate information about our company or had access, through employment or other relationships, to such information. No underwriters were involved in the foregoing issuances of securities. We filed a registration statement on~~Form S-8 under~~ the Securities Act on April 4, 2018 to register all of the shares of our common stock subject to outstanding options and all shares of our common stock otherwise issuable pursuant to our equity compensation plan.

On April 3, 2018, we completed the initial public offering of our common stock pursuant to which we issued and sold 5,770,000 shares of our common stock at a price to the public of $12.00 per share. In addition, on April 25, 2018, we issued and sold an additional 215,000 shares of common stock at the initial public offering price of $12.00 per share as a result of the partial exercise by the underwriters of their option to purchase additional shares of common stock.None.

~~The offer and sale of all of the shares of our common stock in our IPO were registered under the~~Item 3. Defaults Upon Senior Securities ~~Act pursuant to a registration statement on FormS-1~~ ~~(FileNo. 333-223414),~~ which was declared effective by the SEC on March 28, 2018. Following the sale of all of the shares offered in the offering, the offering terminated. Morgan Stanley & Co. LLC and Cowen and Company, LLC acted as joint book-running managers and SunTrust Robinson Humphrey, Inc. and Wedbush PacGrow acted as lead~~co-managers~~ ~~of our IPO.~~

We received aggregate gross proceeds from our initial public offering of $69.2 million, or aggregate net proceeds of $64.4 million after deducting underwriting discounts and commissions but before deducting offering costs. None of the underwriting discounts and commissions or offering expenses were incurred or paid to directors or officers of ours or their associates or to persons owning 10% or more of our common stock or to any of our affiliates.Not applicable.

~~We received gross proceeds of $5.0 million from our concurrent private placement of 416,666 shares of common stock with Seattle Genetics.~~

We had not used any of the net proceeds from the IPO or the concurrent private placement as of March 31, 2018 because the IPO and concurrent private placement closed on April 3, 2018. There has been no material change in our planned use of the net proceeds from the IPO and concurrent private placement as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on March 29, 2018.

~~SIGNATURES~~† The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Cogent Biosciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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.


Large accelerated filer	☐	☐		Accelerated filer	☐
Non-accelerated filer	☒		Smaller reporting company	☒
~~Non-accelerated~~ ~~filer~~		~~☒ (Do not check if a small reporting company)~~		~~Small reporting company~~	☐

				Emerging growth company	☒


				~~Page~~
		~~PART I - FINANCIAL INFORMATION~~

~~Item 1.~~		Page
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)			1
		Condensed Consolidated Balance Sheets			1
		Condensed Consolidated Statements of Operations and Comprehensive Loss			2
		Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows			3	5
		Notes to Unaudited Condensed Consolidated Financial Statements			4	6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			20	16
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			30	28
Item 4.		Controls and Procedures			30

		~~PART II - OTHER INFORMATION~~
			28
~~Item 1.~~		~~Legal Proceedings~~PART II—OTHER INFORMATION			31
Item ~~1A.~~1.		~~Risk Factors~~Legal Proceedings			31	29
Item 2.1A.		~~Unregistered~~Risk Factors	29
Item 2.	Recent Sales of ~~Equity~~Unregistered Securities and Use of Proceeds			71	42
Item 6.3.		~~Exhibits~~Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	73 42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures				74	44


	Three Months Ended March 31,
	2018			2017
Cash flows from operating activities:
Net loss	$	(6,735	)	$	(5,939	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		314			278
Stock-based compensation expense		479			300
Premiums paid on marketable securities		—			(14	)
Net amortization of premiums on marketable securities		4			2
Non-cash interest expense		5			4
Changes in operating assets and liabilities:
Accounts receivable		(771	)		41
Prepaid expenses and other current assets		(668	)		(185	)
Other assets		(419	)		—
Accounts payable		1,341			(61	)
Accrued expenses and other current liabilities		(908	)		(761	)
Deferred rent		(4	)		8
Deferred revenue		(619	)		(941	)

Net cash used in operating activities		(7,981	)		(7,268	)

Cash flows from investing activities:
Purchases of property and equipment		(75	)		(320	)
Purchases of marketable securities		—			(4,500	)
Maturities and sales of marketable securities		6,000			4,000

Net cash provided by (used in) investing activities		5,925			(820	)

Cash flows from financing activities:
Proceeds from issuance of common stock upon stock option exercises		28			—
Payments of initial public offering costs		(563	)		—

Net cash used in financing activities		(535	)		—

Net decrease in cash, cash equivalents and restricted cash		(2,591	)		(8,088	)
Cash, cash equivalents and restricted cash at beginning of period		29,600			42,576

Cash, cash equivalents and restricted cash at end of period	$	27,009		$	34,488

Supplemental disclosure of noncash investing and financing information:
Purchases of property and equipment included in accounts payable	$	108		$	—
Deferred offering costs included in accounts payable and accrued expenses	$	956		$	—
Accretion of redeemable convertible preferred stock to redemption value	$	16		$	16


	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(100,623	)	$	(47,361	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		422			79
Stock-based compensation expense		13,331			7,834
Amortization of operating leases, right-of-use assets		4,519			1,366
Change in fair value of CVR liability		—			(343	)
Net amortization (accretion) of premiums (discounts) on marketable securities		(456	)		—
Right-of-use asset impairment		(396	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(3,119	)		(1,894	)
Other assets		(1,041	)		(2,036	)
Accounts payable		610			3,617
Accrued expenses and other current liabilities		5,781			2,268
Operating lease liability		(8,258	)		(1,516	)
Net cash used in operating activities		(89,230	)		(37,986	)
Cash flows from investing activities:
Purchases of property and equipment		(4,896	)		(1,286	)
Purchases of marketable securities		(148,233	)		—
Net cash used in investing activities		(153,129	)		(1,286	)
Cash flows from financing activities:
Proceeds from issuance of shares of common stock and pre-funded warrants, net of offering costs of $10.8 million		161,945			—
Proceeds from issuance of stock from employee stock purchase plan		351			31
Proceeds from issuance of common stock upon stock option exercises		923			24
Proceeds from pre-funded warrant exercises		24			—
Payment to CVR Holders		—			(85	)
Net cash (used in) provided by financing activities		163,243			(30	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(79,116	)		(39,302	)
Cash, cash equivalents and restricted cash at beginning of period		220,939			243,445
Cash, cash equivalents and restricted cash at end of period	$	141,823		$	204,143
Supplemental disclosure of cash flow information:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	25,184		$	—
Supplemental disclosure of noncash investing and financing information:
Offering costs included in accounts payable and accrued expenses	$	30		$	—
Property & equipment included in accounts payable and accrued expenses	$	363		$	—
Conversion of Series A Convertible Preferred stock into common shares	$	19,570		$	25,481
Issuance of shares in partial settlement of CVR liability	$	—		$	2,043


	Three Months Ended September 30,
	2022		2021		Change
	(in thousands)
Direct external research and development expenses:
Bezuclastinib	$	12,824	$	6,686		6,138
Preclinical research and discovery		4,310		1,446		2,864
Unallocated expenses:
Personnel related (including stock-based compensation)		9,289		5,218		4,071
Laboratory supplies, facility related and other		3,513		1,448		2,065
Total research and development expenses	$	29,936	$	14,798	$	15,138


	Series A Non-Voting
	Convertible Preferred Stock						Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital		Loss			Deficit			Equity
Balances at December 31, 2021		103,289		$	85,400			43,805,922	$	44	$	399,713	$	—		$	(270,973	)	$	214,184
Conversion of Series A non-voting preferred stock into common stock		(7,955	)		(7,000	)		1,988,750		2		6,998		—			—			—
Issuance of common stock under Employee Stock Purchase Plan		—			—			18,995		—		129		—			—			129
Issuance of common stock upon exercise of stock options		—			—			5,599		—		9		—			—			9
Stock-based compensation expense		—			—			—		—		4,175		—			—			4,175
Net loss		—			—			—		—		—		—			(30,634	)		(30,634	)
Balances at March 31, 2022		95,334			78,400			45,819,266		46		411,024		—			(301,607	)		187,863
Issuance of common stock and pre-funded warrants in underwritten public offering, net of offering costs of $10.8 million		—			—			17,899,698		18		161,897		—			—			161,915
Conversion of Series A non-voting preferred stock into common stock		(7,955	)		(7,000	)		1,988,750		2		6,998		—			—			—
Stock-based compensation expense		—			—			—		—		4,534		—			—			4,534
Net loss		—			—			—		—		—		—			(34,927	)		(34,927	)
Balances at June 30, 2022		87,379			71,400			65,707,714		66		584,453		—			(336,534	)		319,385
Conversion of Series A non-voting preferred stock into common stock		(6,329	)		(5,570	)		1,582,250		2		5,568		—			—		$	—
Pre-funded warrant exercise		—			—			2,424,242		2		22		—			—		$	24
Issuance of common stock under Employee Stock Purchase Plan		—			—			30,005		—		222		—			—			222
Issuance of common stock upon exercise of stock options		—			—			113,761		—		914		—			—			914
Net unrealized losses on marketable securities		—			—			—		—		—		(163	)		—			(163	)
Stock-based compensation expense		—			—			—		—		4,622		—			—			4,622
Net loss		—			—			—		—		—		—			(35,062	)		(35,062	)
Balances at September 30, 2022		81,050			65,830			69,857,972		70		595,801		(163	)		(371,596	)		289,942


	Balance at December 31, 2017			Adjustments			Balance at January 1, 2018
Deferred revenue, current and net of current portion	$	15,605		$	6,188		$	21,793
Accumulated deficit	$	(51,339	)	$	(6,188	)	$	(57,527	)


	At March 31, 2018
	Under Topic 606			Under Topic 605			Effect of Change
Deferred revenue, current portion	$	17,519		$	7,222		$	10,297
Deferred revenue, net of current portion	$	3,655		$	7,323		$	(3,668	)
Accumulated deficit	$	(64,262	)	$	(57,633	)	$	(6,629	)


	Three Months Ended March 31, 2018
	Under Topic 606			Under Topic 605			Effect of Change
Collaboration revenue	$	2,220		$	2,661		$	(441	)
Net loss	$	(6,735	)	$	(6,294	)	$	(441	)
Net loss attributable to common stockholders	$	(6,751	)	$	(6,310	)	$	(441	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.66	)	$	(0.62	)	$	(0.04	)
Comprehensive loss	$	(6,726	)	$	(6,285	)	$	(441	)


	As of March 31, 2018
	Preferred Stock Authorized		Preferred Stock Issued and Outstanding		Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
Series A preferred stock		12,297,276		12,297,276	$	12,271	$	12,297		7,832,001
Series B preferred stock		8,494,131		8,474,574		64,896		65,000		5,397,361

		20,791,407		20,771,850	$	77,167	$	77,297		13,229,362


	As of December 31, 2017
	Preferred Stock Authorized		Preferred Stock Issued and Outstanding		Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
Series A preferred stock		12,297,276		12,297,276	$	12,267	$	12,297		7,832,001
Series B preferred stock		8,494,131		8,474,574		64,884		65,000		5,397,361

		20,791,407		20,771,850	$	77,151	$	77,297		13,229,362


Year Ending December 31,
2018 (nine months ending December 31)	$	1,378
2019		1,878
2020		1,933
2021		1,989
2022		2,046
Thereafter		689

	$	9,913


Exhibit Number		Description
31.1*
~~1.1~~		~~Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~3.1~~		~~Form of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~3.2~~		~~Form of Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~4.1~~		~~Form of Stock Purchase Agreement between the Registrant and Seattle Genetics, Inc. (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.1~~		~~Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.2~~		~~Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.3#~~		~~Employment Agreement by and between the Registrant and Charles Wilson (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.4#~~		~~Employment Agreement by and between the Registrant and Michael Vasconcelles (incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.5#~~		~~Employment Agreement by and between the Registrant and Christiana Stamoulis (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.6#~~		~~Unum Therapeutics Inc. 2018 Stock Option and Incentive Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.7#~~		~~Unum Therapeutics Inc. 2018 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

~~10.8#~~		~~Unum Therapeutics Inc.Non-Employee~~ ~~Director Compensation Policy (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on FormS-1~~ ~~(FileNo. 333-223414)~~ ~~filed March 19, 2018)~~

31.1*		Certification of Principal Executive Officer pursuant toRule 13a-14(a) ~~orRule~~or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer pursuant toRule 13a-14(a) ~~orRule~~or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~32.1†~~ 32.1*†		Certification of Principal 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†~~ 32.2*†		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance ~~Document.~~Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase ~~Document.~~Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase ~~Document.~~Document

104		The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101


			~~UNUM THERAPEUTICS INC.~~

~~Date: May 14, 2018~~			~~By:~~		~~/s/ Charles Wilson~~COGENT BIOSCIENCES, INC.
					~~Charles Wilson, Ph.D.~~
Date: November 14, 2022	By:	/s/ Andrew Robbins
		Andrew Robbins
		President and Chief Executive Officer
		(Principal Executive Officer)

~~Date: May 14, 2018~~			~~By:~~		~~/s/ Christiana Stamoulis~~
				Date: November 14, 2022	~~Christiana Stamoulis~~By:	~~President and~~ /s/ John Green
		John Green
		Chief Financial Officer
		(Principal Accounting and Financial Officer)