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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

As of ~~November 6, 2020~~May 14, 2021 there were ~~33,071,020~~38,396,843 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	143,495,266		$	8,962,686		$	149,932,387		$	115,917,807
Restricted cash		34,174			34,174			34,174			34,174
Total cash, cash equivalents and restricted cash		143,529,440			8,996,860			149,966,561			115,951,981
Short-term investments		63,282,716			28,277,386			76,574,768			100,005,558
Accounts receivable		3,816,489			1,021,179			4,801,428			4,610,202
Tax refund receivable		6,193,855			629,096			7,898,067			7,762,793
Prepaid expenses and other current assets		1,309,044			470,228			5,950,999			1,926,675
Total current assets		218,131,544			39,394,749			245,191,823			230,257,209
Property and equipment, net		1,041,920			1,104,208			5,198,052			1,056,920
Right of use asset		939,855			698,321			866,336			903,825
Intangible assets, net		12,794,806			12,732,195			12,879,247			12,823,846
Other assets		87,195			128,547			115,300			73,413
Total assets	$	232,995,320		$	54,058,020		$	264,250,758		$	245,115,213
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	874,885		$	18,232		$	418,243		$	612,293
Accrued expenses and other current liabilities		5,418,831			3,904,767			9,405,649			11,408,154
Total current liabilities		6,293,716			3,922,999			9,823,892			12,020,447
Contingent consideration		25,070,000			2,750,000			6,270,000			5,390,000
Other long-term liabilities		1,925,769			1,864,875			1,719,438			1,828,443
Total liabilities		33,289,485			8,537,874			17,813,330			19,238,890
Commitments and contingencies (Note 16)
Stockholders’ equity:
Common stock, $0.0001 par value; 200,000,000 shares authorized; 33,073,035 and 15,312,381 shares issued; 33,073,035 and 15,312,167 shares outstanding at September 30, 2020 and December 31, 2019, respectively		3,289			1,508
Common stock, $0.0001 par value; 200,000,000 shares authorized; 38,257,180 and 37,142,946 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively								3,810			3,697
Additional paid-in capital		380,543,640			187,914,916			462,417,706			417,337,742
Accumulated deficit		(175,798,822	)		(137,376,122	)		(210,944,707	)		(186,420,599	)
Accumulated other comprehensive loss, net		(5,042,272	)		(5,020,156	)		(5,039,381	)		(5,044,517	)
Total stockholders’ equity		199,705,835			45,520,146			246,437,428			225,876,323
Total liabilities and stockholders’ equity	$	232,995,320		$	54,058,020		$	264,250,758		$	245,115,213

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019			For the Three Months Ended March 31,
													2021			2020
Revenues	$	2,937,991		$	643,978		$	5,872,321		$	5,225,600		$	837,516		$	2,212,694
Operating expenses:
Research and development		17,041,975			8,729,697			40,823,756			14,892,464			11,877,900			7,187,531
General and administrative		4,220,238			2,187,661			9,097,511			6,485,960			3,821,420			2,331,917
Impairment charges		—			1,000,000			—			1,000,000
Total operating expenses		21,262,213			11,917,358			49,921,267			22,378,424			15,699,320			9,519,448
Loss from operations		(18,324,222	)		(11,273,380	)		(44,048,946	)		(17,152,824	)		(14,861,804	)		(7,306,754	)
Other income (expense):
Changes in fair value of warrant liability		—			76,000			—			30,000
Interest expense		(2,275	)		(756	)		(7,468	)		(2,244	)		(11,671	)		(1,885	)
Interest income		45,127			224,058			278,154			649,268			42,499			151,569
Other income (expense), net		29,218			(23,734	)		48,882			(6,206	)
Total other income, net		72,070			275,568			319,568			670,818
Other (expense) income, net														(33,132	)		25,542
Total other (expense) income, net														(2,304	)		175,226
Net loss before income tax benefit		(18,252,152	)		(10,997,812	)		(43,729,378	)		(16,482,006	)		(14,864,108	)		(7,131,528	)
Income tax benefit		482,017			58,500			5,306,678			58,500			—			3,245,879
Net loss		(17,770,135	)		(10,939,312	)		(38,422,700	)		(16,423,506	)		(14,864,108	)		(3,885,649	)
Other comprehensive loss – unrealized (loss) gain on investments		(10,569	)		18,953			(22,116	)		18,953
Other comprehensive income (loss) – unrealized gain (loss) on investments														5,136			(32,435	)
Comprehensive loss	$	(17,780,704	)	$	(10,920,359	)	$	(38,444,816	)	$	(16,404,553	)	$	(14,858,972	)	$	(3,918,084	)
Net loss	$	(17,770,135	)	$	(10,939,312	)	$	(38,422,700	)	$	(16,423,506	)
Deemed dividends		—			—			—			(452,925	)
Net loss attributed to common stockholders	$	(17,770,135	)	$	(10,939,312	)	$	(38,422,700	)	$	(16,876,431	)
Net loss per share attributed to common stockholders, basic and diluted	$	(0.54	)	$	(0.74	)	$	(1.74	)	$	(1.35	)
Net loss per share, basic and diluted													$	(0.38	)	$	(0.26	)
Weighted-average common shares outstanding, basic and diluted		33,056,971			14,768,931			22,058,424			12,481,494			38,914,990			15,110,585

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

Common Stock

Additional
Paid-In

Accumulated

Accumulated
Other
Comprehensive

Total
Stockholders’

Shares

Amount

Capital

Deficit

Loss

Equity

Balance at December 31, 2019

15,312,167

$
1,508

$
187,914,916

$
(137,376,122
)

$
(5,020,156
)

$
45,520,146

Stock-based compensation

—

—

214,921

—

—

214,921

Vesting of restricted stock awards including withholding, net

(5,974
)

1

(17,080
)

—

—

(17,079
)
Issuance of common stock from Employee Stock Purchase Plan

38,809

3

56,736

—

—

56,739

Issuance of common stock upon exercise of warrants

14,500

2

39,972

—

—

39,974

Unrealized loss on short-term investments

—

—

—

—

(32,435
)

(32,435
)
Net loss

—

—

—

(3,885,649
)

—

(3,885,649
)
Balance at March 31, 2020

15,359,502

1,514

188,209,465

(141,261,771
)

(5,052,591
)

41,896,617

Stock-based compensation

—

—

330,510

—

—

330,510

Issuance of common stock from exercise of stock options

13,935

1

36,174

—

—

36,175

Vesting of restricted stock awards including withholding, net

(5,974
)

1

(46,390
)

—

—

(46,389
)
Issuance of common stock in at the market offering, net

2,965,144

297

22,780,432

—

—

22,780,729

Issuance of common stock upon exercise of warrants

8,221,279

822

31,269,341

—

—

31,270,163

Unrealized gain on short-term investments

—

—

—

—

20,888

20,888

Net loss

—

—

—

(16,766,916
)

—

(16,766,916
)
Balance at June 30, 2020

26,553,886

2,635

242,579,532

(158,028,687
)

(5,031,703
)

79,521,777

Stock-based compensation

—

—

1,320,089

—

—

1,320,089

Issuance of common stock from exercise of stock options

32,189

3

90,267

—

—

90,270

Vesting of restricted stock awards including withholding, net

103,551

13

(114,585
)

—

—

(114,572
)
Issuance of common stock from Employee Stock Purchase Plan

53,852

5

78,727

—

—

78,732

Issuance of common stock and pre-funded warrants in public offering, net

4,119,564

412

124,027,403

—

—

124,027,815

Issuance of common stock in at the market offering, net

247,865

25

2,834,082

—

—

2,834,107

Issuance of common stock upon exercise of warrants

1,962,128

196

9,728,125

—

—

9,728,321

Unrealized loss on short-term investments

—

—

—

—

(10,569
)

(10,569
)
Net loss

—

—

—

(17,770,135
)

—

(17,770,135
)
Balance at September 30, 2020

33,073,035

$
3,289

$
380,543,640

$
(175,798,822
)

$
(5,042,272
)

$
199,705,835

	Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares			Amount			Capital			Deficit			Loss			Equity
Balance at December 31, 2020		37,142,946		$	3,697		$	417,337,742		$	(186,420,599	)	$	(5,044,517	)	$	225,876,323
Stock-based compensation		—			—			1,218,351			—			—			1,218,351
Vesting of restricted stock awards including withholding, net		(6,349	)		1			(92,507	)		—			—			(92,506	)
Issuance of common stock from Employee Stock Purchase Plan		8,733			1			106,000			—			—			106,001
Retirement of common stock in exchange for common stock warrant		(1,000,000	)		(100	)		(7,539,900	)		(9,660,000	)		—			(17,200,000	)
Issuance of common stock warrant in exchange for retirement of common stock		—			—			17,200,000			—			—			17,200,000
Issuance of common stock in at the market offering, net		2,110,800			211			34,178,020			—			—			34,178,231
Issuance of common stock upon cashless exercise of warrants		1,050			—			10,000			—			—			10,000
Unrealized income on short-term investments		—			—			—			—			5,136			5,136
Net loss		—			—			—			(14,864,108	)		—			(14,864,108	)
Balance at March 31, 2021		38,257,180		$	3,810		$	462,417,706		$	(210,944,707	)	$	(5,039,381	)	$	246,437,428

	Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total Stockholders’			Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Loss			Equity			Shares			Amount		Capital			Deficit			Loss			Equity
Balance at December 31, 2018		9,078,238	$	876	$	170,207,844	$	(116,855,991	)	$	(5,040,163	)	$	48,312,566
Balance at December 31, 2019																	15,312,167		$	1,508	$	187,914,916		$	(137,376,122	)	$	(5,020,156	)	$	45,520,146
Stock-based compensation		—		—		407,714		—			—			407,714			—			—		214,921			—			—			214,921
Vesting of restricted stock awards including withholding, net		71		—		28		—			—			28			(5,974	)		1		(17,080	)		—			—			(17,079	)
Issuance of common stock in registered direct offering, net		4,361,370		436		12,668,348		—			—			12,668,784
Issuance of common stock from Employee Stock Purchase Plan																	38,809			3		56,736			—			—			56,739
Issuance of common stock upon exercise of warrants		11,000		1		30,323		—			—			30,324			14,500			2		39,972			—			—			39,974
Unrealized loss on short-term investments																	—			—		—			—			(32,435	)		(32,435	)
Net loss		—		—		—		(2,097,306	)		—			(2,097,306	)		—			—		—			(3,885,649	)		—			(3,885,649	)
Balance at March 31, 2019		13,450,679		1,313		183,314,257		(118,953,297	)		(5,040,163	)		59,322,110
Stock-based compensation		—		—		289,772		—			—			289,772
Vesting of restricted stock awards including withholding, net		71		—		28		—			—			28
Net loss		—		—		—		(3,386,888	)		—			(3,386,888	)
Balance at June 30, 2019		13,450,750		1,313		183,604,057		(122,340,185	)		(5,040,163	)		56,225,022
Stock-based compensation		—		—		287,774		—			—			287,774
Vesting of restricted stock awards including withholding, net		72		—		28		—			—			28
Issuance of common stock for acquired in-process research and development		1,887,250		189		3,791,296		—			—			3,791,485
Unrealized gain on short-term investments		—		—		—		—			18,953			18,953
Net loss		—		—		—		(10,939,312	)		—			(10,939,312	)
Balance at September 30, 2019		15,338,072	$	1,502	$	187,683,155	$	(133,279,497	)	$	(5,021,210	)	$	49,383,950
Balance at March 31, 2020																	15,359,502		$	1,514	$	188,209,465		$	(141,261,771	)	$	(5,052,591	)	$	41,896,617

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

	Nine Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(38,422,700	)	$	(16,423,506	)	$	(14,864,108	)	$	(3,885,649	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash consideration for acquired in-process research and development		—			6,541,485
Change in fair value of contingent consideration liability		22,320,000			—			880,000			1,750,000
Impairment charge		—			1,000,000
Stock-based compensation expense		1,865,520			985,260			1,218,351			214,921
Depreciation		182,650			181,314
Amortization		36,282			135,664
Unrealized gains on foreign currency exchange		(44,323	)		(3,310	)
Changes in fair value of warrant liability		—			(30,000	)
Depreciation and amortization								74,298			73,356
Unrealized losses on foreign currency exchange								33,376			24,939
Changes in operating assets and liabilities:
Accounts receivable		(2,815,343	)		2,449,447			(191,226	)		(973,557	)
Prepaid expenses and other current assets		(636,943	)		179,298			(4,200,624	)		(214,893	)
Accounts payable		856,653			(322,976	)		(194,050	)		911,397
Accrued expenses and other liabilities		1,199,708			(2,274,497	)		(2,189,903	)		1,112,718
Tax refund receivable		(5,564,759	)		40,376			(135,274	)		(3,360,633	)
Deferred taxes		—			(58,500	)
Net cash used in operating activities		(21,023,255	)		(7,599,945	)		(19,569,160	)		(4,347,401	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales and maturities of short-term investments		39,385,689			—			30,912,000			13,700,000
Purchases of short-term investments		(74,413,135	)		(28,207,073	)		(7,476,074	)		(7,099,263	)
Purchase of property and equipment		(100,329	)		(1,227	)
Purchases of property and equipment, net								(4,208,790	)		(18,131	)
Cash paid for internally developed patents		(98,893	)		(25,396	)		(62,041	)		(19,390	)
Net cash used in investing activities		(35,226,668	)		(28,233,696	)
Net cash provided by investing activities								19,165,095			6,563,216
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash paid in conjunction with warrant exchange		—			(25,000	)
Payments of deferred offering costs		(160,522	)		—			134,413			—
Proceeds from exercises of warrants		41,038,458			30,324			—			39,974
Proceeds from issuance of common stock in at the market offering, net		25,614,836			—			34,178,231			—
Proceeds from issuance of common stock and pre-funded warrants in public offering, net		124,027,815			—
Proceeds from issuance of common stock in registered direct offering, net		—			12,668,784
Proceeds from issuance of notes payable		632,000			—
Payments of notes payable		(632,000	)		(186,940	)
Proceeds from issuance of common stock from Employee Stock Purchase Plan		135,471			—			106,001			56,739
Proceeds from exercises of stock options		126,445			—
Net cash provided by financing activities		190,782,503			12,487,168			34,418,645			96,713
Net increase and decrease in cash and cash equivalents and restricted cash		134,532,580			(23,346,473	)
Net increase in cash and cash equivalents and restricted cash								34,014,580			2,312,528
Cash, cash equivalents and restricted cash at beginning of period		8,996,860			34,353,129			115,951,981			8,996,860
Cash, cash equivalents and restricted cash at end of period	$	143,529,440		$	11,006,656		$	149,966,561		$	11,309,388

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	1,791		$	—
SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES:
Common stock issued for acquired in-process research and development	$	—		$	3,791,485
Fair value of common stock retired in exchange for issuance of common stock warrant							$	17,200,000		$	—

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

Altimmune, Inc., headquartered in Gaithersburg, Maryland, United States, together with its subsidiaries (collectively, the “Company” or ~~“Altimmune”~~“Altimmune��) is a clinical stage biopharmaceutical company incorporated under the laws of the State of Delaware.

The Company is focused on developing intranasal vaccines, immune modulating therapies, and treatments for liver disease. The Company’s diverse pipeline includes proprietary intranasal vaccines for COVID-19 (AdCOVID), anthrax (NasoShield) and influenza (NasoVAX); an intranasal immune modulating therapeutic for COVID-19 (T-COVID); and next generation peptide therapeutics for NASH (ALT-801) and chronic hepatitis B (HepTcell). Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of common and preferred stock, long-term debt, and proceeds from research grants and government contracts. The Company has not generated any revenues from the sale of any products to date, and there is no assurance of any future revenues from product sales.

The accompanying unaudited consolidated financial statements are prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2019~~2020 included in the ~~annual report~~Annual Report on Form 10-K which was filed with the SEC on ~~March 27, 2020.~~February 25, 2021. In the opinion of management, the Company has prepared the accompanying unaudited consolidated financial statements on the same basis as the audited consolidated financial statements, and these consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year ~~2020~~2021 or any future years or periods.

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

The accompanying unaudited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should we be unable to continue as a going concern.

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual ~~report~~Report on Form 10-K for the year ended December 31, ~~2019~~2020 as filed with the SEC, except for the recently adopted accounting standard for ~~investments.~~income taxes.

The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The extent to which the COVID-19 pandemic may directly or indirectly impact the Company’s business, financial condition, and results of operations is highly uncertain and subject to change. The Company considered the potential impact of the COVID-19 pandemic on the Company’s estimates and assumptions and determined that there was not a material impact to the Company’s unaudited consolidated financial statements as of and for the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021. However, actual results could differ from those estimates and there may be changes to the Company’s estimates in future periods.

In ~~August 2018,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2018-13,~~2019-12, ~~Fair Value Measurement~~Income Taxes (Topic ~~820) – Disclosure Framework – Changes to~~740), Simplifying the ~~Disclosure Requirements~~Accounting for ~~Fair Value Measurement~~Income Taxes (“ASU No. ~~2018-13”~~2019-12”). ASU ~~No. 2018-13 was issued~~2019-12 amends the approaches and methodologies in accounting for income taxes during interim periods and makes changes to ~~modify and enhance~~certain income tax classifications. The new standard allows exceptions to the ~~disclosure requirements for fair value measurements and eliminates certain disclosure requirements, such as the amount of, and reasons for, transfers between Level 1 and Level 2~~use of the ~~fair value hierarchy. This ASU adds new disclosure requirements~~incremental approach for ~~Level 3 measurements~~intra-period tax allocation, when there is a loss from continuing operations and income or a gain from other items, and to the general methodology for calculating income taxes in an interim period, when a year-to-date loss exceeds the anticipated loss for the year. The standard also requires franchise or similar taxes partially based on income to be reported as income tax and the effects of enacted changes in tax laws or rates to be included in the annual effective tax rate computation from the date of enactment. Lastly, in any future acquisition, the Company would be required to evaluate when the step-up in the tax basis of

goodwill is ~~effective for fiscal years beginning after December 15, 2019~~part of the business combination and ~~interim periods within those fiscal years.~~when it should be considered a separate transaction. The Company adopted ~~this guidance effective~~the standard as of January 1, ~~2020 which resulted in expanded disclosures in Note 3 regarding~~2021 and has evaluated the effects of this standard and determined that the adoption did not have a material impact on the Company’s ~~recurring Level 3 fair value measurements.~~ consolidated financial statements.

The Company’s assets and liabilities measured at fair value on a recurring basis at ~~September 30, 2020~~March 31, 2021 consisted of the following:

	Fair Value Measurement at September 30, 2020								Fair Value Measurement at March 31, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Recurring fair value measurements
Assets:
Cash equivalents - money market funds	$	47,191,204	$	47,191,204	$	—	$	—	$	13,962,902	$	13,962,902	$	—	$	—
Short-term investments		63,282,716		—		63,282,716		—		76,574,768		—		76,574,768		—
Total										90,537,670		13,962,902		76,574,768		—
Liabilities:
Contingent consideration liability (see Note 8)		25,070,000		—		—		25,070,000		6,270,000		—		—		6,270,000
Warrant liability		10,000		—		—		10,000
Total									$	6,270,000	$	—	$	—	$	6,270,000

The Company’s assets and liabilities measured at fair value on a recurring basis at December 31, ~~2019~~2020 consisted of the following:

	Fair Value Measurement at December 31, 2019								Fair Value Measurement at December 31, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Recurring fair value measurements
Assets:
Cash equivalents - money market funds	$	8,034,640	$	8,034,640	$	—	$	—	$	90,389,473	$	90,389,473	$	—	$	—
Short-term investments		28,277,386		—		28,277,386		—		100,005,558		—		100,005,558		—
Total										190,395,031		90,389,473		100,005,558		—
Liabilities:
Contingent consideration liability (see Note 8)		2,750,000		—		—		2,750,000		5,390,000		—		—		5,390,000
Warrant liability		10,000		—		—		10,000		10,000		—		—		10,000
Total									$	5,400,000	$	—	$	—	$	5,400,000

The warrant liability is included in Other long-term liabilities in the consolidated balance sheet at December 31, 2020. The warrant liability was valued using the Monte Carlo simulation valuation model with Level 3 inputs.

Short-term investments have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data (Level 2). The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

Short-term investments had quoted prices at ~~September 30, 2020~~March 31, 2021 as shown below:

The fair value of contingent payments classified as a liability ~~was~~is based on the regulatory milestones described in Note 8 and estimated using the Monte Carlo simulation valuation model with Level 3 inputs. ~~The following table is a reconciliation of the beginning and ending balance of contingent consideration liability:~~

The assumptions used to estimate the fair value of contingent payments that are classified as a liability at ~~September 30, 2020~~March 31, 2021 include the following significant unobservable inputs:

~~The Company’s warrant liability is valued using the Monte Carlo simulation valuation model with Level 3 inputs.~~ If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs.

There were no transfers into and out of any of the levels of the fair value hierarchy as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired. As of ~~September 30,~~March 31, 2021 and December 31, 2020, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

As of March 31, 2021, construction-in-progress primarily includes costs related to the procurement of long-lead equipment and build out of the suite associated with the Company's manufacturing collaboration with Lonza Houston, Inc. (“Lonza”) described in Note 16. Depreciation expense related to property and equipment was approximately $67,658 and $59,505, for the three months ended March 31, 2021 and 2020, respectively.

Amortization expense of intangible assets was ~~$10,406~~$6,640 and ~~$28,084~~$13,851 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, and $36,282 and $135,664~~respectively. As of March 31, 2021, the weighted average amortization period remaining for ~~the nine months ended September 30, 2020 and 2019, respectively.~~intangible assets was 12.3 years. Amortization expense was classified as research and development expenses in the accompanying unaudited consolidated statements of operations and comprehensive loss.

~~As of September 30, 2020, future estimated amortization expense was as follows:~~

The Company rents office and laboratory space in the United States. The Company also leases office equipment under a non-cancellable equipment lease through December 2022. Rent expense during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 under all of the Company’s operating leases was ~~$107,709~~$130,138 and ~~$281,603, respectively. Rent expense during the three and nine months ended September 30, 2019 was $84,745 and $258,824,~~$87,599, respectively. Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation.

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

The office space leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The office space lease also includes an option to renew the lease as of the end of the term. The Company has determined that the lease renewal option is not reasonably ~~certain.~~certain of being exercised.

The cash paid for operating lease liabilities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 was ~~$64,244~~$117,354 and ~~$190,317,~~$95,714, respectively.

Supplemental other information related to the operating leases balance sheet information ~~is as follows:~~

On April 7, 2020, the Company applied for a loan from ServisFirst Bank, as lender, pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) as administered by the U.S. Small Business Administration (the "SBA"). On April 13, 2020, the Loan was approved and the Company received the proceeds from a loan in the amount of $632,000 ~~(the “PPP Loan”).~~

The PPP Loan, which took the form of a promissory note (the “Promissory Note”), was set to mature on April 7, 2022 and bore interest at a rate of 1% per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), was to commence on November 7, 2020. The Company did not provide any collateral or guarantees for the PPP Loan, nor did the Company pay any facility charge to obtain the PPP Loan. The Promissory Note provided for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company could prepay the principal of the PPP Loan at any time without incurring any prepayment charges.

All or a portion of the Loan may be forgiven by the SBA and lender upon application by the Company upon documentation of expenditures in accordance with the SBA requirements. On July 21, 2020, the Company voluntarily extinguished the Promissory Note by paying the outstanding principal and accrued interest in cash. As of September 30, 2020, no amounts were outstanding.

The Company entered into ~~a definitive agreement~~an Agreement and Plan of Merger and Reorganization, dated July 8, 2019, by and among the Company, Springfield Merger Sub, Inc., Springfield Merger Sub, LLC, Spitfire Pharma, Inc. and David Collier, as the Stockholder Representative (the “Spitfire Merger Agreement”) to acquire all of the equity interests of Spitfire Pharma, Inc. (“Spitfire”) ~~on July 8, 2019.~~. Spitfire was a privately held, preclinical pharmaceutical company developing a novel dual GLP-1/glucagon receptor agonist for the treatment of non-alcoholic steatohepatitis.

The transaction closed on July 12, 2019. The Company issued 1,887,250 unregistered shares of its common stock (the “shares”) as upfront consideration to certain former securityholders of Spitfire (collectively, the “Spitfire Equityholders”), representing an amount equal to $5.0 million less working capital and transaction expense adjustment amounts as defined in the agreement.

The Spitfire Merger Agreement also includes future contingent payments up to $88.0 million in cash and shares of the Company’s common stock as follows (each, a “Milestone Event”):

The Regulatory Milestones will be payable in shares of the Company’s Common Stock, with the number of shares of the Company’s Common Stock to be issued in connection with each milestone amount, if any, are dependent on the share price at the time of achievement. The number of any shares issued in consideration for the IND Milestone Consideration Amount will be determined based on lower of (A) the average of the closing prices of our Common Stock as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days prior to the IND Reference Date or (B) $2.95. The value of any shares issued in consideration for the Phase 2 Milestone Consideration Amount shall be determined based the lower of (A) on the average of the closing trading prices of our Common Stock as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days immediately preceding the date of the occurrence of the Phase 2 Milestone Event or (B) $3.54.

On November 3, 2020, the Company received acknowledgement from the Australian Government Department of Health on the Company’s submitted clinical trial notification (“CTN”) which triggers the IND Milestone payment of 1,694,916 shares of the Company’s Common Stock to the previous owners. Pursuant to the Merger Agreement, the Company will issue the shares within sixty days of the submission of the CTN, which was October 29, 2020. The shares are subject to a lockup whereby 50% of the shares are released from restriction after 3 months, and the remainder are released from restriction after 6 months.

The acquisition of Spitfire was accounted for as an asset acquisition instead of a business combination because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets, and therefore, the asset was not considered a business. The Company expensed the acquired intellectual property as of the acquisition date as in-process research and development with no alternative future uses. The Company recorded an in-process research and development expense for the up-front consideration during the third quarter of 2019. Transaction costs of $0.1 million and $0.7 million were recorded within research and development expense on the Company’s consolidated statements of operations and comprehensive loss during the three and nine months ended September 30, 2019, respectively.

The future contingent payments related to the Regulatory Milestones are stock-based payments accounted for under FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities From Equity (“ASC 480”). Such stock-based payments are subject to a lock-up whereby 50% of the shares are released at 3 months and 50% are released at 6 months. As of the acquisition date, the Company estimated future contingent consideration of $2.8 million based upon a Monte Carlo simulation that was risk adjusted based on the probability of achieving the milestones and a discount for lack of marketability, which was expensed to in-process research and development expenses during the third quarter of 2019. The Company remeasured the fair value of the contingent consideration as of September 30, 2020, and increased the liability from June 30, 2020 to $25.1 million primarily due to an increase in the share price during the nine months ended September 30, 2020 and an increase in the probability of milestone achievement. The change in the liability of $8.7 million and $22.3 million was expensed to research and development expense during the three and nine months ended September 30, 2020, respectively.

The future contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies. Accordingly, the Company will recognize the Sales Milestones when the contingency is resolved and the amount is paid or payable.

The Company estimates the future contingent consideration for the Regulatory Milestones based upon a Monte Carlo simulation valuation model that is risk adjusted based on the probability of achieving the milestones and a discount for lack of marketability. The Company remeasures the fair value of the contingent consideration at each reporting period. During the fourth quarter of 2020, the Company achieved the IND Milestone and paid the obligation in shares according to the calculation above. Below is a summary of the contingent consideration activity:

As of March 31, 2021, the increase in fair value was primarily attributable to an increase in the closing share price of the Company’s common stock and in the probability of milestone achievement. As of March 31, 2020, the increase in fair value was primarily due to an increase in the probability of milestone achievement. Any changes in fair value have been recorded within research and development expense during the respective periods presented.

On July 16, 2020, the Company offered and sold (i) 3,369,564 shares of common stock, at a price to the public of $23.00 per share, and (ii) pre-funded warrants of the Company to purchase 1,630,436 shares of common stock at an exercise price equal to $0.0001 per share (the “Pre-Funded Warrants”), at a price to the public of $22.9999 per share of common stock underlying the Pre-Funded Warrants (equal to the public offering price per share of Common Stock, minus the exercise price of each Pre-Funded Warrant). The Pre-Funded Warrants are exercisable at any time, provided that each Pre-Funded Warrant holder will be prohibited from exercising such Pre-Funded Warrants into shares of the Company’s common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of the Company’s common stock then issued and outstanding, which percentage may change at the holders’ election to any other number less than or equal to 19.99% upon 61 days’ notice to the Company. The gross proceeds of this offering were approximately $132.2 million, which includes the exercise in full of the underwriters’ option to purchase an additional 750,000 shares of common stock, before deducting underwriting discounts and commissions and offering expenses during the third quarter of 2020. The net proceeds of this offering were approximately $124.0 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

The Company has assessed the Pre-Funded Warrants for appropriate equity or liability classification and determined that the Pre-Funded Warrants are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to FASB Accounting Standards Codification Topic 815, Derivatives and Hedging (“ASC 815”). The Pre-Funded Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, the Pre-Funded Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance.

~~During the nine months ended September 30, 2020,~~ As of March 31, 2021, no Pre-Funded Warrants were exercised.

On February 25, 2021, the Company entered into an Equity Distribution Agreement (the “2021 Agreement”) with Piper Sandler & Co., Evercore Group L.L.C., and B. Riley Securities, Inc., serving as sales agents (the “Sales Agents”) with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $125.0 million (the “Shares”) through the Sale Agents (the “2021 Offering”). Any Shares offered and sold in the 2021 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on December 31, 2020, which was declared effective on January 11, 2021, the prospectus supplement relating to the 2021 Offering filed with the SEC on February 25, 2021 and any applicable additional prospectus supplements related to the 2021 Offering that form a part of the Registration Statement.

As of March 31, 2021, the Company has sold 2,110,800 shares of Common Stock under the 2021 Agreement resulting in approximately $34.2 million in net proceeds, with $89.7 million remaining available to be sold under the 2021 Agreement. As of March 31, 2021, the Company recorded approximately $0.1 million of offering costs which offset the proceeds received from the shares sold through March 31, 2021 and recognized approximately $0.1 million of deferred offering costs which will offset future proceeds received under the 2021 Agreement.

On March 27, 2020, the Company entered into an Equity Distribution Agreement (the ~~“Agreement”~~“2020 Agreement”) with JMP Securities LLC, serving as placement agent (the “Placement Agent”) with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $50.0 million (the “Shares”) through the Placement Agent (the ~~“Offering”~~“2020 Offering”).

Any Shares offered and sold in the 2020 Offering ~~will be~~were issued pursuant to the Company’s Registration Statement on Form S-3 filed with the ~~Securities and Exchange Commission (the “SEC”)~~SEC on April 4, 2019, which was declared effective on April 12, 2019, the prospectus supplement relating to the 2020 Offering filed with the SEC on March 27, 2020 and any applicable additional prospectus supplements related to the 2020 Offering that form a part of the Registration Statement. The aggregate market value of Shares eligible for sale in the 2020 Offering and under the ~~Equity Distribution~~2020 Agreement ~~will be~~were subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent required under such instruction. The Company offered Shares having an aggregate offering price of $18.9 million pursuant to the prospectus supplement filed with the SEC on March 27, 2020.

On June 1, 2020, the Company filed an amendment to the 2020 Agreement which amended the prospectus supplement dated March 27, 2020 to increase the aggregate offering price to $50.0 million.

~~As of September 30, 2020, the Company has sold 3,213,009 shares of Common Stock under the Agreement resulting in $25.6 million in net proceeds, with $23.4 million remaining available to be~~No Shares were sold under the ~~amended Agreement.~~2020 Agreement during the three months ended March 31, 2020. As of ~~September 30,~~March 31, 2021, the 2020 Agreement was fully utilized and no Shares were sold under the 2020 Agreement during the three months ended March 31, 2021.

On February 25, 2021, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of the Company’s common stock, par value $0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $0.0001 per share. The Exchange Warrants do not expire and are exercisable at any time except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. In accordance with FASB Accounting Standards Codification Topic 505, Equity, the

Company recorded ~~approximately $0.3 million~~the retirement of ~~offering costs which offset~~ the ~~proceeds received from~~common stock exchanged as a reduction of common shares outstanding and a corresponding debit to additional paid-in-capital and accumulated deficit at the fair value of the Exchange Warrants on the issuance date. The Exchange Warrants are classified as equity in accordance with ASC 480 and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in-capital is not subject to remeasurement. The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares ~~sold through September 30, 2020 and recognized approximately $0.2 million~~on the issuance date due to the negligible exercise price for the Exchange Warrants. As of ~~deferred offering costs which will offset future proceeds received under~~March 31, 2021, none of the ~~Agreement.~~ Exchange Warrants have been exercised.

A summary of warrant activity during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 is as follows:

~~During~~As of March 31, 2021, all of the ~~nine months ended September 30, 2020, the Company received net proceeds of $41.0 million from warrant exercises.~~

~~For~~common stock warrants that were previously classified as a liability ~~the following is a summary of the periodic changes~~were exercised in ~~their fair value during the nine months ended September 30, 2020:~~

The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years. At ~~September 30, 2020,~~March 31, 2021, there was ~~$3.1~~$10.1 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of ~~2.55~~2.9 years. During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company granted ~~698,000~~669,000 stock options with a weighted average exercise price of ~~$4.64~~$16.73 and per share weighted average grant date fair value of ~~3.69.~~$13.76.

Information related to stock options outstanding at ~~September 30, 2020~~March 31, 2021 is as follows:

At ~~September 30, 2020,~~March 31, 2021, the Company had unvested restricted stock of ~~174,908~~134,545 shares with total unrecognized compensation expense of ~~$0.6~~$0.5 million, which the Company expects to recognize over a weighted average period of approximately ~~2.17~~1.7 years. During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company released ~~60,758~~20,181 shares of common stock from restriction as a result of the vesting of restricted stock.

~~During the third quarter of 2020,~~In February 2021, the Company granted ~~15,000~~181,279 shares of restricted stock units which vest over four years. At ~~September 30, 2020,~~March 31, 2021, the Company had unvested restricted stock units of ~~15,000~~196,279 shares with total unrecognized compensation expense of ~~$0.2~~$2.8 million, which the Company expects to recognize over a weighted average period of approximately ~~3.99~~3.8 years.

Under the Employee Stock Purchase Plan, ~~(“ESPP”),~~ employees purchased ~~53,852~~8,733 shares for $0.1 million during the three months ended ~~September 30, 2020.~~March 31, 2021. During the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, the Company recognized compensation expense of ~~$87,092 and $122,177, respectively.~~$0.1 million.

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ as follows:

In June 2020, the Company was awarded $4.7 million from the U.S. Army Medical Research & Development Command (“USAMRDC”) to fund our Phase 1/2 clinical trial of T-COVID. The competitive award was granted by USAMRDC in collaboration with the Medical Technology Enterprise Consortium (“MTEC”), a 501(c)(3) biomedical technology consortium working in partnership with the Department of Defense (“DoD”). Under the contract, MTEC will pay the Company a firm fixed fee based upon the achievement of certain milestones for conduct and completion of a Phase 1/2 study and research and development work on the replication-deficient adenovirus 5 (“RD-Ad5”) vector vaccine platform. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, the Company has recognized ~~$2.3~~approximately $0.5 million of grant revenue under the contract.

In July 2016, the Company signed a five-year contract with BARDA. The contract, as amended, has a total value of up to $133.7 million and is used to fund clinical development of NasoShield. Under the contract, BARDA pays the Company a fixed fee and reimburses certain costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through cGMP manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity. The contract consists of an initial base performance period providing approximately $27.8 million in funding for the period July 2016 through June 2021. BARDA has seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical studies. Each option, if exercised by BARDA, would provide additional funding ranging from approximately $1.1 million to $34.4 million for a three-year period beginning in 2021. For the three months ended March 31, 2021 and 2020, the Company has recognized approximately $0.2 million and $1.6 million, respectively, of grant revenue under the current BARDA contract.

Due to a full valuation allowance, the Company did not record an income tax benefit for the three months ended March 31, 2021.

~~In response~~With respect to ~~global pandemic associated with COVID-19,~~the prior year, on March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) ~~on March 27, 2020.~~. The CARES Act provided both stimulus measures and a number of tax provisions, including: temporary changes regarding the utilization and carry back of net operating losses, temporary changes to the prior and future limitations on interest deductions, technical corrections from prior tax legislation for tax depreciation of qualified improvement property, and certain refundable employee retention credits. ~~The CARES Act enables~~As of March 31, 2020, the Company recognized a tax benefit of $3.2 million related to ~~file a refund claim~~the carry back of losses back to ~~reflect~~obtain a refund of its 2016 tax ~~liability by carrying back its 2018, 2019 and 2020 losses to fully offset this~~ liability. The refund claim attributable to the 2018 and 2019 tax years has been recorded as a discrete item in the income tax benefit for the nine months ended September 30, 2020 of $3.9 million related to the U.S. Federal and Maryland state benefit and represents a partial refund of the Company’s 2016 tax liability. In addition, the Company is currently estimating it will be able to carry back a portion of its current and forecasted 2020 net operating losses as of the end of the year and has included an estimate in its annual effective tax rate calculation as of September 30, 2020, which resulted in an additional income tax benefit of $0.5 million and $1.4 million recorded during the three and nine months ended September 30, 2020, respectively.

~~Accordingly, the Company has recognized a total tax benefit of $5.3 million for the nine months ended September 30, 2020.~~

Because the Company has reported a net loss attributable to common stockholders for all periods presented, basic and diluted net loss per share attributable to common stockholders are the same for all periods presented.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average numbers of shares of common stock outstanding for the period. Basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock.

Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. As such, all unvested restricted stock, common stock warrants, and stock options have been excluded from the computation of diluted weighted average shares outstanding because such securities would have an anti-dilutive impact for all periods presented.

Potential common shares issuable upon conversion, vesting or exercise of unvested restricted stock, common stock warrants, and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows:

As disclosed in Note 8, the Company is obligated to make payments of up to $80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma Inc. within ten years following the approval of a new drug application filed with the FDA.

On April 2, 2020, the Company entered into Amendment No. 3 to the Second Restated License Agreement (the “Amendment”), by and between the Company and Janssen Vaccines & Prevention B.V. (formerly known as Crucell Holland B.V.) (as amended by Amendment No. 1 to Second Restated License Agreement and Amendment No. 2 to Second Restated License Agreement, together with the Amendment, the “License Agreement”). Pursuant to the Amendment, the field of licenses granted to the Company for the use of the PER.C6 cell line under the License Agreement is expanded to cover COVID-19 caused by SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), in addition to the existing licenses related to Bacillus anthracis and influenza virus. All capitalized terms not defined herein shall have the meanings assigned to them in the Amendment or the License Agreement, as applicable.

Pursuant to the Amendment, the Company agreed to pay certain additional development-based milestone payments through approval of licensed products by the FDA for the treatment or prevention of COVID-19, up to an aggregate amount of $1.2 million. The Company also agreed to pay royalty payments as a percentage of net sales of products to a royalty stacking reduction and minimum annual royalty payments, until the expiration of the term of the License Agreement, as amended. As of ~~September 30, 2020,~~March 31, 2021, no payments were made under the License Agreement.

In March 2021, the Company expanded its manufacturing collaboration with Lonza in connection with the Manufacturing Agreement ~~were de minimis.~~entered into in November 2020 for the manufacture of AdCOVID. Under the expanded agreement, the Company has committed approximately $23.0 million to Lonza to procure long-lead equipment and construct a dedicated manufacturing suite for clinical and commercial production of AdCOVID. This work is expected to be completed during the fourth quarter of 2021. As of March 31, 2021, the Company capitalized approximately $4.0 million to construction-in-progress related to the equipment purchase and build out of the suite under the expanded agreement.

In March 2021, the Company entered into a development and manufacturing agreement with Summit Biosciences, Inc. (“Summit”) to manufacture a metered nasal spray presentation of AdCOVID. Under the agreement, the Company has committed approximately $6.7 million to Summit for the clinical manufacturing of AdCOVID multidose nasal spray. This work is expected to be completed by the end of 2021. As of March 31, 2021, the Company recorded approximately $1.4 million to prepaid expenses under the agreement.

In December 2019, a complaint was filed by Dr. De-Chu Christopher Tang (“Plaintiff”) against the Company, inwhich the Company removed to the United States District Court for the Eastern District of Texas. The Plaintiff amended the complaint in February 2020 to include Vipin K. Garg and David J. Drutz as defendants, in addition to the Company (Dr. Garg, Dr. Drutz, and the Company are collectively referred to as “Defendants”). ~~In March~~On November 6, 2020, ~~the~~ Defendants filed a motion for summary judgment on the basis of lack of personal jurisdiction, insufficient service of process, and failure to dismiss the complaint. The Court denied the motion without prejudice and allowed Plaintiff an opportunity to file an amended complaint. Plaintiff’s second amended complaint was filed on April 17, 2020, and Defendants filedstate a motion to dismiss that complaint on May 1, 2020. A hearing on Defendants’ motion to dismiss was held on May 20, 2020, and the motion is currently pending. Plaintiff, who is representing himself, alleges five causes of action as follows: (1) Defendants’ alleged retention of Plaintiff’s lab notebooks after the termination of his employment in 2012; (2) alleged plagiarism based on publishing an article without naming Plaintiff as an author; (3) use of the Adhigh System, which Plaintiff alleges he developed; (4) allegations that Defendants manipulated the Company’s stock and caused a decrease in value; and (5) allegations that the Defendants “wast[ed] government grant money and poison[ed] science by leaving data to rot.” On September 30, 2020, Plaintiff filed a motion titled “Motion to Proscribe Defendants’ Allegedly Illegal Use of Plaintiff’s AdHigh System in Altimmune’s Human Clinical Trials,” to which Defendants filed an opposition on October 13, 2020.claim. The court ~~has not yet~~ ruled on that motion on March 25, 2021, which ~~also remains pending. The Company believes~~dismissed the ~~allegations in~~case on the ~~complaint are without merit and intends to vigorously defend the litigation. However,~~basis of lack of personal jurisdiction. As the outcome of this legal proceeding is ~~uncertain~~certain at this time, ~~and the Company cannot reasonably estimate a range of loss, if any. Accordingly,~~ the Company has not accrued any liability associated with this action.

The Company is a party in various other contractual disputes, litigation, and potential claims arising in the ordinary course of business none of which are currently reasonably possible or probable of material loss.

On November 3, 2020, the Company received acknowledgement from the Australian Government Department of Health on the Company’s submitted clinical trial notification which triggers the IND Milestone payment. See Note 8 for further details.

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 together with our consolidated financial statements and related notes appearing elsewhere in this quarterly report on Form 10-Q and our consolidated financial statements and related notes for the year ended December 31, ~~2019~~2020 included in our annual report on Form 10-K, which was filed with the Securities and Exchange Commission on ~~March 27, 2020.~~February 25, 2021.

This quarterly report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “may,” “will,” “should,” “could,” “target,” “strategy,” “intend,” “project,” “guidance,” “likely,” “usually,” “potential,” or the negative of these words or variations of such words, similar expressions, or comparable terminology are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this quarterly report on Form 10-Q, particularly in the section entitled “Risk Factors” in Part II, Item 1A, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements, other than as required by law. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we, in the future, may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Altimmune, Inc. is a clinical stage biopharmaceutical company focused on developing intranasal vaccines, immune modulating therapies and treatments for liver disease. Our diverse pipeline includes proprietary intranasal vaccines for COVID-19 (AdCOVID), anthrax (NasoShield) and influenza (NasoVAX); an intranasal immune modulating therapeutic for COVID-19 (T-COVID); and next generation peptide therapeutics for ~~NASH~~non-alcoholic steatohepatitis (“NASH”) (ALT-801) and chronic hepatitis B (HepTcell).

We are closely monitoring how the spread of ~~COVID-19~~the coronavirus disease (“COVID-19”) is affecting our employees, business, preclinical studies and clinical trials. In response to the COVID-19 pandemic, we have closed our executive offices with certain employees continuing their work outside of our offices and travel for all employees has been restricted. Essential laboratory staff continue to work onsite with enhanced safety measures. We are continuing our regular interactions with the FDA and other regulatory agencies and based on current information, we do not anticipate COVID-19 to materially affect our regulatory timelines for NasoShield, T-COVID, AdCOVID, ALT-801 and ALT-801. We expect the pandemic to have some near-term impact on the initiation of our HepTcell Phase 2 trial and, accordingly, we will delay the initiation of this trial. We expect we will be able to provide an update on timing for initiating the study towards the end of 2020.HepTcell.

Although operations have not been materially affected by the COVID-19 pandemic as of and for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, at this time, however, there is significant uncertainty relating to the trajectory of the pandemic and the impact of related responses, and disruptions caused by the COVID-19 pandemic may result in difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing trials and the incurrence of unforeseen costs as a result of disruptions in clinical supply or preclinical study or clinical trial delays. The impact of COVID-19 on our future results will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. In addition, a recurrence ~~or “second wave”~~ of COVID-19 cases could cause other widespread or more severe impacts depending on where infection rates are highest. We continue to monitor developments as we deal with the disruptions and uncertainties relating to the COVID-19 pandemic. See “Risk Factors— Our business, results of operations and financial condition may be adversely affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the ongoing coronavirus disease (COVID-19) pandemic.” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Phase 1/2 study and research and development work on the replication-deficient adenovirus 5 (“RD-Ad5”) vector vaccine platform. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, we have recognized approximately ~~$2.3~~$0.5 million of grant revenue under the contract.

In July 2016, we signed a five-year contract with Biomedical Advanced Research and Development Authority (“BARDA”). The contract, as amended, has a total value of up to $133.7 million and is used to fund clinical development of NasoShield. Under the contract, BARDA pays us a fixed fee and reimburses certain costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through cGMP manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity. The contract consists of an initial base performance period providing approximately $27.8 million in funding for the period July 2016 through December 2020. BARDA has seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical trials. Each option, if exercised by BARDA, would provide additional funding ranging from approximately $1.1 million to $34.4 million for a three-year period beginning January 2021. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, we have recognized approximately ~~$0.6~~$0.2 million and ~~$2.7~~$1.6 million, respectively, of grant revenue under the current BARDA contract.

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. and the rules and regulations of the SEC for interim financial reporting. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, ~~and~~ expenses, and the ~~related~~ disclosure of contingent ~~assets and liabilities.~~liabilities in our consolidated financial statements. We base our estimates and judgments on historical experience, knowledge of current conditions, and expectations of what could occur in the future given available information.

There have been no changes in our critical accounting policies and significant judgment and estimates as disclosed in our annual report on Form 10-K for the year ended December 31, ~~2019~~2020 except for recently adopted accounting standards (See Note 2 to the consolidated financial statements appearing in Item 1 of this report). For more information regarding our critical accounting policies, we encourage you to read the discussion contained in Item 7 under the heading “Critical Accounting Policies and Significant Judgments and Estimates” and Note 2 “Summary of Significant Accounting Policies” included in the notes to the consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Comparison of the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:

For the Three Months Ended
September 30,

2020

2019

Increase (Decrease)
Revenue

$
2,937,991

$
643,978

$
2,294,013

356

%
Operating expenses:

Research and development

17,041,975

8,729,697

8,312,278

95

General and administrative

4,220,238

2,187,661

2,032,577

93

Impairment charges

—

1,000,000

(1,000,000
)

(100
)

Total operating expenses

21,262,213

11,917,358

9,344,855

78

Loss from operations

(18,324,222
)

(11,273,380
)

(7,050,842
)

(63
)

Other income (expense):

Changes in fair value of warrant liability

—

76,000

(76,000
)

100

Interest expense

(2,275
)

(756
)

(1,519
)

(201
)

Interest income

45,127

224,058

(178,931
)

(80
)

Other income (expenses), net

29,218

(23,734
)

52,952

223

Total other income, net

72,070

275,568

(203,498
)

(74
)

Net loss before income tax benefit

(18,252,152
)

(10,997,812
)

(7,254,340
)

(66
)

Income tax benefit

482,017

58,500

423,517

724

Net loss

$
(17,770,135
)

$
(10,939,312
)

$
(6,830,823
)

(62
)
%

	For the Nine Months Ended September 30,												For the Three Months Ended March 31,
	2020			2019			Increase (Decrease)						2021			2020			Increase (Decrease)
Revenue	$	5,872,321		$	5,225,600		$	646,721		12		%	$	837,516		$	2,212,694		$	(1,375,178	)	(62	)	%
Operating expenses
Operating expenses:
Research and development		40,823,756			14,892,464			25,931,292		174				11,877,900			7,187,531			4,690,369		65
General and administrative		9,097,511			6,485,960			2,611,551		40				3,821,420			2,331,917			1,489,503		64
Impairment charges		—			1,000,000			(1,000,000	)	(100	)
Total operating expenses		49,921,267			22,378,424			27,542,843		123				15,699,320			9,519,448			6,179,872		65
Loss from operations		(44,048,946	)		(17,152,824	)		(26,896,122	)	(157	)			(14,861,804	)		(7,306,754	)		(7,555,050	)	(103	)
Other income (expense):
Changes in fair value of warrant liability		—			30,000			(30,000	)	100
Interest expense		(7,468	)		(2,244	)		(5,224	)	(233	)			(11,671	)		(1,885	)		(9,786	)	(519	)
Interest income		278,154			649,268			(371,114	)	(57	)			42,499			151,569			(109,070	)	(72	)
Other income (expenses), net		48,882			(6,206	)		55,088		(888	)
Total other income, net		319,568			670,818			(351,250	)	(52	)
Other (expense) income, net														(33,132	)		25,542			(58,674	)	230
Total other (expense) income, net														(2,304	)		175,226			(177,530	)	(101	)
Net loss before income tax benefit		(43,729,378	)		(16,482,006	)		(27,247,372	)	(165	)			(14,864,108	)		(7,131,528	)		(7,732,580	)	(108	)
Income tax benefit		5,306,678			58,500			5,248,178		8,971				—			3,245,879			(3,245,879	)	(100	)
Net loss	$	(38,422,700	)	$	(16,423,506	)	$	(21,999,194	)	(134	)	%	$	(14,864,108	)	$	(3,885,649	)	$	(10,978,459	)	(283	)	%

Revenue consists primarily of research grants in the United States from MTEC for our T-COVID product candidate ~~BARDA,~~ and ~~in 2019, the National Institute of Allergy and Infectious Diseases (“NIAID”)~~BARDA for our ~~anthrax~~NasoShield vaccine product ~~candidates.~~candidate. These grants consist of firm fixed fee contracts based on milestones and cost reimbursement contracts, with a fixed fee based on either costs incurred or ~~milestones.~~milestones met.

Revenue ~~increased~~decreased by ~~$2.3~~$1.4 million, or ~~356%~~62%, for the three months ended ~~September 30, 2020~~March 31, 2021, as compared to the same period in ~~2019.~~2020. The ~~increase~~decrease was primarily the result of:

~~Revenue increased by $0.6 million, or 12%, for the nine months ended September 30, 2020 as compared to the same period in 2019. The increase was primarily the result of:~~

Research and development operating expense increased by ~~$8.3~~$4.7 million, or ~~95%~~65%, for the three months ended ~~September 30, 2020~~March 31, 2021, as compared to the same period in ~~2019.~~2020. The increase was primarily the result of:

Research and development operating expense increased by $25.9 million, or 174%, for the nine months ended September 30, 2020 as compared to the same period in 2019. The increase was primarily the result of:

General and administrative expense increased by ~~$2.0~~$1.5 million, or ~~93%~~64%, for the three months ended ~~September 30, 2020 and by $2.6 million, or 40%, for the nine months ended September 30, 2020,~~March 31, 2021, as compared to the same ~~periods~~period in ~~2019~~2020 due primarily to an increase in stock compensation expense ~~legal, professional~~ and other labor related costs.

Impairment charges of $1.0 million reported during the three and nine months ended September 30, 2019 resulted from the completion of SparVax-L NIAID contract with no future funding identified. As a result of the contract completion and the US government’s funding prioritization of only single dose anthrax vaccine candidates, we abandoned the project and impaired the remaining net book value of the SparVax-L IPR&D asset.

Total other (expense) income, net decreased by $0.2 million during the three months ended ~~September 30, 2020 and decreased by $0.4 million during the nine months ended September 30, 2020~~March 31, 2021, as compared to the same period in ~~2019.~~2020. The ~~decreases are~~decrease is primarily due to changes in interest income.

Income tax benefit ~~increased~~decreased by ~~$0.4 million and $5.2~~$3.2 million during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, as compared to the same period in ~~2019. The increase is due~~2020. In both 2020 and 2021, we had a valuation allowance against all of our deferred tax assets, but in 2020 a benefit was recognized related to a net operating loss carryback refund claim pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 which made temporary changes regarding the utilization and carry back of net operating losses. As of September 30, 2020, the Company intends to file a refund claim for a discrete item of $3.9 million with the U.S. Federal and Maryland tax authorities, reflecting a partial refund of its 2016 tax liability by carrying back its 2018 and 2019 losses not previously claimed. In addition, the Company is currently estimating it will be able to carry back a portion of its forecasted 2020 net operating losses, which resulted in an additional income tax benefit of $0.5 million and $1.4 million recorded during the three and nine months ended September 30, 2020, respectively.Act.

Our primary sources of cash during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 were from sales of equity, ~~activity,~~ maturities of short-term investments and cash receipts of revenue from our BARDA and MTEC contracts. Our cash, cash equivalents, restricted cash and short-term investments were ~~$206.8~~$226.5 million at ~~September 30, 2020.~~March 31, 2021. We believe, based on the operating cash requirements and capital expenditures expected for ~~2020~~2021 and ~~2021,~~2022, our cash on hand ~~at September 30, 2020,~~and short-term investments at March 31, 2021, together with expected revenue from our government sponsored contracts and tax refunds, are sufficient to fund operations for at least a twelve-month period from the issuance date of our ~~September 30, 2020~~March 31, 2021 consolidated financial statements.

We have not generated any revenues from the sale of any products to date, and there is no assurance of any future revenues from product sales. Our sources of revenue have consisted of grant revenues under our arrangements with BARDA for the development of NasoShield, MTEC for a clinical trial and development work on T-COVID, and to a lesser degree from other licensing arrangements. We have incurred significant losses since we commenced operations. As of ~~September 30, 2020,~~March 31, 2021, we had accumulated losses of ~~$175.8~~$210.9 million since our inception. In addition, we have not generated positive cash flows from operations. We have had to rely on a variety of financing sources, including the issuance of debt and equity securities. As capital resources are consumed to fund our research and development activities, we may not have sufficient capital to fund our plan of operations. In order to address our capital needs, including our planned clinical trials, we ~~have initiated the ATM Offering and the Public Offering and~~ must continue to actively pursue additional equity or debt financing, government funding, and monetization of our existing programs through partnership arrangements or sales to third parties.

In June 2020, we were awarded $4.7 million from the U.S. Army Medical Research & Development Command (“USAMRDC”) to fund our Phase 1/2 clinical trial of T-COVID. The competitive award was granted by USAMRDC in collaboration with the Medical Technology Enterprise Consortium (“MTEC”), a 501(c)(3) biomedical technology consortium working in partnership with the Department of Defense (“DoD”). Under the contract, MTEC pays us a firm fixed fee based upon the achievement of certain milestones for conduct and completion of a Phase 1/2 study and research and development work on the replication-deficient adenovirus 5 (“RD-Ad5”) vector vaccine platform. Through ~~September 30, 2020,~~March 31, 2021, we have ~~received~~collected approximately $1.6 million in cash ~~an aggregate of approximately $0.1 million~~ under the contract.

In July 2016, we signed a five-year contract with BARDA. The contract, as amended, has a total value of up to $133.7 million and is used to fund clinical development of NasoShield. Under the contract, BARDA pays us a fixed fee and reimburses certain costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through cGMP manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity. The contract consists of an initial base performance period providing approximately $27.8 million in funding for the period July 2016 through December 2020. BARDA has seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical trials. Each option, if exercised by BARDA, would provide additional funding ranging from approximately $1.1 million to $34.4 million for a three-year period

beginning January 2021. Through ~~September 30, 2020,~~March 31, 2021, we have ~~received~~collected approximately $24.9 million in cash ~~an aggregate of approximately $24.1 million~~ under the current BARDA contract.

The following table provides information regarding our cash flows for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Net cash used in operating activities was ~~$21.0~~$19.6 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$7.6~~$4.3 million during the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. Our sources of cash provided by operations during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 were primarily cash receipts of revenue generated by our BARDA ~~contract.~~and MTEC contracts. The primary uses of cash from our operating activities include payments for labor and labor-related costs, professional fees, research and development costs associated with our clinical trials, and other general corporate expenditures. The increase in cash used in operations of ~~$13.4~~$15.2 million year over year is due to an increase in net loss as adjusted for non-cash items of ~~$6.4~~$10.8 million and changes in working capital accounts of ~~$7.0 million, primarily due to recording of the income tax benefit receivable.~~$4.4 million.

Net cash ~~used~~provided by investing activities was ~~$35.2~~$19.2 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$28.2~~$6.6 million during the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The net cash ~~used~~provided by investing activities during the three months ended March 31, 2021 was primarily due to net proceeds from short-term investment activity, partially offset by purchases of property and equipment. The net cash provided by investing activities during the three months ended March 31, 2020 was primarily due to ~~purchases and maturities of~~net proceeds from short-term ~~investments. The net cash used in investing activities in 2019 was primarily due to purchases of short-term investments.~~investment activity.

Net cash provided by financing activities during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~$190.8~~$34.4 million compared to ~~$12.5~~$0.1 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The net cash provided by financing activities during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was primarily the result of the receipt of ~~$124.0 million in~~ ~~proceeds from a public offering (as discussed below), $41.0 million in proceeds from the exercise of warrants and $25.6~~$34.2 million in proceeds from the issuance of common stock from our at-the-market offering ~~program.~~program and $0.1 million in proceeds from the issuance of common stock from our Employee Stock Purchase Plan. The net cash provided by financing activities during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was primarily the result of ~~the receipt of $12.7 million in~~ proceeds from ~~a registered direct offering of units that consisted~~the issuance of common stock from our Employee Stock Purchase Plan and ~~warrants~~.exercise of warrants.

On July 16, 2020, we offered and sold (i) 3,369,564 shares of our common stock, at a price to the public of $23.00 per share, and (ii) pre-funded warrants to purchase 1,630,436 shares of our common stock at an exercise price equal to $0.0001 per share (the “Pre-Funded Warrants”), at a price to the public of $22.9999 per share of common stock underlying the Pre-Funded Warrants (equal to the public offering price per share of Common Stock, minus the exercise price of each Pre-Funded Warrant). The Pre-Funded Warrants are exercisable at any time, provided that each Pre-Funded Warrant holder will be prohibited from exercising such Pre-Funded Warrants into shares of our common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our common stock then issued and outstanding, which percentage may change at the holders’ election to any other number less than or equal to 19.99% upon 61 days’ notice to us. The gross proceeds of this offering were approximately $132.2 million, which includes the exercise in full of the underwriters’ option to purchase an additional 750,000 shares of common stock, before deducting underwriting discounts and commissions and offering expenses during the third quarter of 2020. The net proceeds of this offering were approximately $124.0 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

On February 25, 2021, we entered into an Equity Distribution Agreement (the “2021 Agreement”) with Piper Sandler & Co., Evercore Group L.L.C., and B. Riley Securities, Inc., serving as sales agents (the “Sales Agents”) with respect to an at-the-market offering program under which we may offer and sell, from time to time at its sole discretion, shares of our common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $125.0 million (the “Shares”) through the Sale Agents (the “2021 Offering”). As of March 31, 2021, we sold 2,110,800 shares of Common Stock under the 2021 Agreement resulting in approximately $34.2 million in net proceeds, with $89.7 million remaining available to be sold under the 2021 Agreement.

On March 27, 2020, we entered into an Equity Distribution Agreement (the ~~“Agreement”~~“2020 Agreement”) with JMP Securities LLC, serving as placement agent (the “Placement Agent”) with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $50.0 million (the “Shares”) through the Placement Agent (the ~~“Offering”~~“2020 Offering”). We offered Shares having an aggregate offering price of ~~$18.9~~

$18.9 million pursuant to the prospectus supplement filed with the SEC on March 27, 2020. On June 1, 2020, we filed an amendment to the 2020 Agreement which amended the prospectus supplement dated March 27, 2020 to increase the aggregate offering price to $50.0 million. As of ~~September~~March 30, 2021, the 2020 ~~we sold 3,213,009 shares of Common Stock under the~~ Agreement ~~resulting in $25.6 million in net proceeds, with $23.4 million remaining available to be sold under the amended Agreement.~~was fully utilized.

We have financed our operations to date principally through our equity offerings and proceeds from issuances of our preferred stock, common stock, and warrants. At ~~September 30, 2020~~March 31, 2021, we had ~~$143.5~~$150.0 million of cash, cash equivalents and restricted cash and ~~$63.3~~$76.6 million of short-term investments. Accordingly, management believes that the Company has sufficient capital to fund its plan of operations for at least a twelve-month period from the issuance date of our ~~September 30, 2020~~March 31, 2021 financial statements. However, in order to address our capital needs in the long-term, including our planned clinical trials, we must continue to actively pursue additional equity or debt financing, government funding, and monetization of our existing programs through partnership arrangements or sales to third parties.

As of ~~September 30, 2020,~~March 31, 2021, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as “special purpose” entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this Item.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (“the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of ~~September 30, 2020,~~March 31, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended ~~September 30, 2020~~March 31, 2021 identified in connection with the evaluation thereof by our management, including the Chief Executive Officer and Chief Financial Officer, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In December 2019, a complaint was filed by Dr. De-Chu Christopher Tang (“Plaintiff”) against us in the United States District Court for the Eastern District of Texas. The Plaintiff amended the complaint in February 2020 to include Vipin K. Garg and David J. Drutz as defendants, in addition to the Company (Dr. Garg, Dr. Drutz, and the Company are collectively referred to as “Defendants”). See Note 16 to the consolidated financial statements appearing in Item 1 of this report for further details.

A prior lawsuit filed by the Plaintiff against us in the United States District Court for the Northern District of Alabama, resulted in the entry of a Final Consent Judgment and Permanent Injunction on August 25, 2016 (the “Alabama Judgment”). In the Alabama Judgment, the court declared, among other things, that we owned the DVD technology that Plaintiff had developed during his employment with us, and enjoined Plaintiff from “using or disclosing any Proprietary Information or Innovations relating to the DVD technology and any associated intellectual property rights” without our written consent.

~~In addition to~~There have been no material changes from the ~~other information set forth~~risk factors disclosed in ~~this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, subsection “Risk Factors” in~~ our ~~2019~~ Annual Report on Form 10-K filed with the SEC on March 27, 2020 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, filed with the SEC on May 13, 2020 and August 11, 2020, respectively, as they could materially affect our business, financial condition or future results of operations. The risks described in our 2019 Annual Report on Form 10-K filed with the SEC on March 27, 2020 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, filed with the SEC on May 13, 2020 and August 11, 2020, respectively, are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and future results of operations. The following information updates, and should be read in conjunction with, the risk factors previously disclosed in Item 1A, subsection “Risk Factors” to Part I of our 2019 Annual Report on Form 10-K filed with the SEC on March 27, 2020 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, filed with the SEC on May 13, 2020 and August 11, 2020, respectively. Except as set forth below, there have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in our 2019 Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q.February 25, 2021.

Our pursuit of potential therapeutic and prophylactic treatments for COVID-19 is at an early stage and subject to many risks. We may be unable to receive approval for any of our COVID-19 product candidates a timely manner, if at all, and our COVID-19 product candidates may never be approved.

The U.S. Food and Drug Administration recently cleared our Investigational New Drug, or IND, application to proceed with a clinical trial of T-COVID, our investigational agent for the treatment of early COVID-19 and we have not yet filed an IND for AdCOVID, our intranasal vaccine candidate for COVID-19. We have not yet initiated a clinical trial for AdCOVID and recently began enrollment for T-COVID. We may experience difficulties or delays in enrolling patients in clinical trials due to the impact of the global COVID-19 pandemic or other reasons. Many of the risks related to the development of these product candidates are beyond our control, including risks related to clinical development, the regulatory submission process, potential threats to our intellectual property rights and manufacturing delays or difficulties. We may be unable to produce an efficacious and/or approved product for the treatment of patients with early COVID-19 in a timely manner, if at all.

The results of preclinical studies from our COVID-19 product candidates may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials. There can be no assurance that any of our clinical trials for our COVID-19 product candidates, or any other of our product candidates, will ultimately be successful or support further clinical development. In addition, the interpretation of the data from our clinical trials of T-COVID or AdCOVID by FDA and other regulatory agencies may differ from our interpretation of such data and the FDA or other regulatory agencies may require that we conduct additional studies or analyses. Any of these factors could delay or prevent us from receiving regulatory approval of T-COVID or AdCOVID and there can be no assurance that either product candidate will be approved in a timely manner, if at all.

If the COVID-19 outbreak is effectively contained or the risk of coronavirus infection is diminished or eliminated before we can successfully develop and manufacture our product candidate, the commercial viability of such product candidate may be diminished or eliminated. We are also committing financial resources and personnel to the development of this product candidate which may cause delays in or otherwise negatively impact our other development programs, despite uncertainties surrounding the longevity and extent of coronavirus as a global health concern. Our business could be negatively impacted by our allocation of significant resources to a global health threat that is unpredictable and could rapidly dissipate or against which our treatment, if successfully developed, may not be effective. In addition, other parties are currently producing therapeutic and vaccine candidates for COVID-19, which may be more efficacious or may be approved prior to T-COVID or AdCOVID.

~~The regulatory pathway for T-COVID and AdCOVID is continually evolving, and may result in unexpected or unforeseen challenges.~~

The speed at which parties are acting to create and test many therapeutics and vaccines for COVID-19 is unusual, and evolving or changing plans or priorities within the FDA, including those based on new knowledge of COVID-19 and how the disease affects the human body, may significantly affect the r~~egulatory timeline for our product candidates. Results from ongoing clinical trials and discussions with regulatory~~

~~authorities may raise new~~ ~~questions~~ and require us to redesign proposed clinical trials, including revising proposed endpoints or adding new clinical trial sites or cohorts of subjects. Any such developments could delay the development timeline for our product candidates and materially increase the cost of the development for such candidates.

~~None.~~On February 25, 2021, we entered into an exchange agreement (the “Exchange Agreement”) with entities affiliated with Venrock Healthcare Capital Partners III, L.P. (the “Exchanging Stockholders”), pursuant to which we exchanged an aggregate of 1,000,000 shares of our common stock, par value $0.0001 per share, (the “Common Stock”) owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of Common Stock (subject to adjustment in the event of stock splits, recapitalizations and other similar events affecting common stock), with an exercise price of $0.0001 per share. The Exchange Warrants are exercisable at any time, except that the Exchange Warrants will not be exercised by the Exchanging Stockholders if, upon giving effect or immediately prior thereto, the Exchanging Stockholders would beneficially own more than 9.99% of the total number of issued and outstanding Common Stock, which percentage may change at the holders’ election to any other number less than or equal to 19.99% upon 61 days’ notice to us. The holders of the Exchange Warrants will not have the right to vote on any matter except to the extent required by Delaware law. The Exchange Warrants were issued in reliance of Section 3(a)(9) of the Securities Act of 1933, as amended.

~~In September 2020, the Company’s Board approved our non-employee director compensation policy, a copy of which is filed herewith as Exhibit 10.2.~~None.

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

Delaware		20-2726770
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

910 Clopper Road Suite 201S, Gaithersburg, Maryland		20878
(Address of Principal Executive Offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	ALT	The NASDAQ Global Market

		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 (unaudited) and December 31, ~~2019~~2020	1

	Consolidated Statements of Operations and Comprehensive Loss for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and 2019 (unaudited)	2

	Consolidated Statements of Changes in Stockholders’ Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	3

	Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	54

	Notes to Consolidated Financial Statements (unaudited)	65

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1514

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2018

Item 4.	Controls and Procedures	2018


PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	2119

Item 1A.	Risk Factors	2119

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2219

Item 3.	Defaults Upon Senior Securities	2219

Item 4.	Mine Safety Disclosures	2219

Item 5.	Other Information	2219

Item 6.	Exhibits	2320

	Signatures	2421

	September 30, 2020
	Amortized Cost		Unrealized Gain (Loss)			Market Value		March 31, 2021
								Amortized Cost		Unrealized Gain (Loss)			Market Value
United States treasury securities	$	3,995,784	$	936		$	3,996,720	$	16,029,965	$	2,995		$	16,032,960
Financial and corporate debt securities		49,283,352		(3,045	)		49,280,307
Commercial paper and corporate debt securities									33,412,043		(1,935	)		33,410,108
Asset backed securities									2,111,239		(278	)		2,110,961
Certificate of deposit		10,005,689		—			10,005,689		25,020,739		—			25,020,739
Total	$	63,284,825	$	(2,109	)	$	63,282,716	$	76,573,986	$	782		$	76,574,768

	December 31, 2020
	Amortized Cost		Unrealized Gain (Loss)			Market Value
United States treasury securities	$	20,052,757	$	1,843		$	20,054,600
Commercial paper and corporate debt securities		47,521,344		(5,440	)		47,515,904
Asset backed securities		7,414,619		(757	)		7,413,862
Certificate of deposit		25,021,192		—			25,021,192
Total	$	100,009,912	$	(4,354	)	$	100,005,558

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

Balance at December 31, 2019	$	2,750,000
Change in fair value		22,320,000
Balance at September 30, 2020	$	25,070,000

Unobservable input	Value or Range	Weighted Average	Value or Range	Weighted Average

Expected volatility	113.7%	113.7%	117.4%	117.4%
Risk-free interest rate	0.13%	0.13%	0.09%	0.09%
Cost of capital	30%	30%	30%	30%
Discount for lack of marketability	12%-18%	15%	16%-19%	18%
Probability of payment	63%-100%	91%	63%	63%
Projected year of payment	2020-2022	2020	2022	2022

	March 31, 2021			December 31, 2020
Furniture, fixtures and equipment	$	185,878		$	125,538
Laboratory equipment		1,041,752			959,585
Computers and telecommunications		250,516			220,316
Software		64,409			64,409
Leasehold improvements		1,415,608			1,285,883
Construction-in-progress		4,000,000			—
Property and equipment, at cost		6,958,163			2,655,731
Less: accumulated depreciation and amortization		(1,760,111	)		(1,598,811	)
Property and equipment, net	$	5,198,052		$	1,056,920

	September 30, 2020								March 31, 2021
	Estimated Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Book Value		Estimated Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Book Value
Internally developed patents	6-10 years	$	845,216	$	(473,314	)	$	371,902	6-20 years	$	946,828	$	(486,548	)	$	460,280
Acquired licenses	16-20 years		285,000		(281,063	)		3,937	16-20 years		285,000		(285,000	)		—
Total intangible assets subject to amortization			1,130,216		(754,377	)		375,839			1,231,828		(771,548	)		460,280
IPR&D assets	Indefinite		12,418,967		—			12,418,967	Indefinite		12,418,967		—			12,418,967
Total		$	13,549,183	$	(754,377	)	$	12,794,806		$	13,650,795	$	(771,548	)	$	12,879,247

Years ending December 31,
The remainder of 2020	$	14,539
2021		26,576
2022		26,576
2023		26,576
2024		22,669
2025 and thereafter		258,903
Total	$	375,839

	September 30, 2020
Operating lease obligations (see Note 6 and 9)	$	1,888,604
Operating lease right-of-use assets	$	939,855
Weighted-average remaining lease term		4.58
Weighted-average discount rate		7.4	%

Year ending December 31,
The remainder of 2020	$	97,298
2021		475,372
2022		484,484
2023		493,868
2024		503,535
2025 and thereafter		168,929
Total lease payments		2,223,486
Less imputed interest		(334,882	)
Total	$	1,888,604

	March 31, 2021			December 31, 2020
Operating lease obligations (see Note 7 and 9)	$	1,739,559		$	1,824,840
Operating lease right-of-use assets	$	866,336		$	903,825
Weighted-average remaining lease term (years)		4.1			4.3
Weighted-average discount rate		7.3	%		7.3	%

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Accrued professional services	$	510,081	$	429,467	$	612,212	$	1,350,194
Accrued payroll and employee benefits		1,673,406		1,183,130		1,182,658		2,351,599
Accrued interest		10,724		5,047		13,744		13,016
Accrued research and development		2,876,763		1,966,111		7,211,778		7,316,876
Lease obligation, current portion (see Note 5)		328,104		259,449
Lease obligation, current portion (see Note 6)						365,504		356,716
Deferred revenue		19,753		61,563		19,753		19,753
Total accrued expenses	$	5,418,831	$	3,904,767	$	9,405,649	$	11,408,154

	Number of Stock Options		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (Years)		Aggregate Intrinsic Value		Number of Stock Options		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding		1,622,248	$	4.52		5.90	$	15,235,853		2,293,367	$	8.11		6.0	$	16,651,695
Exercisable		458,609	$	5.69		5.74	$	4,537,424		773,781	$	5.35		5.8	$	7,855,753
Unvested		1,163,639	$	4.06		5.96	$	10,698,428		1,519,586	$	9.51		6.0	$	8,795,942

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Lease obligation, long-term portion (see Note 5)	$	1,560,500	$	1,484,679
Lease obligation, long-term portion (see Note 6)					$	1,374,055	$	1,468,124
Conditional economic incentive grants		250,000		250,000		250,000		250,000
Other		115,269		130,196		95,383		110,319
Total other long-term liabilities	$	1,925,769	$	1,864,875	$	1,719,438	$	1,828,443

Warrants outstanding, December 31, 2020	1,777,611
Exchanges (see Note 10)
~~Warrants outstanding, December 31, 2019~~	~~10,384,706~~
~~Issuances~~	~~1,631,794~~1,000,000
Exercises	(~~10,238,889~~1,420	)
Warrants outstanding, ~~September 30, 2020~~March 31, 2021	~~1,777,611~~2,776,191

Balance, December 31, 2019	$	10,000
Changes in fair value		—
Balance, September 30, 2020	$	10,000

	For the Three and Nine Months Ended		For the Three and Nine Months Ended		For the Three Months Ended March 31,
	September 30, 2020		September 30, 2019		2021		2020
Common stock warrants		147,175		10,384,706		145,755		10,370,206
Common stock options		1,627,394		976,861		2,307,264		1,423,612
Restricted stock		189,908		323,191		330,824		215,413

		Exhibit Index

Exhibit No.		Description

4.1		Form of Pre-funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K, filed on February 25, 2021)

10.1		Amendment No. 46 to the Second Restated License Agreement, ~~by and among Altimmune, Inc. and~~effective as of January 22, 2021, between Janssen Vaccines & Prevention B.V.~~, dated as of July 28, 2020~~ (formerly Crucell Holland B.V.) and Altimmune, Inc.

10.2§		~~Non-Employee Director Compensation Policy~~Statement of Work, dated March 9, 2021, by and between Altimmune, Inc. and Lonza Houston Inc.

31.1 †		Certification of Principal Executive Officer Pursuant to SEC Rule 13a-14(a)/15d-14(a)

31.2 †		Certification of Principal Financial Officer Pursuant to SEC Rule 13a-14(a)/15d-14(a)

32.1 †		Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

32.2 †		Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

	ALTIMMUNE, INC.

Dated: ~~November 9, 2020~~May 17, 2021	By:	/s/ Vipin K. Garg
	Name:	Vipin K. Garg
	Title:	President and Chief Executive Officer (Principal Executive Officer)

Dated: ~~November 9, 2020~~May 17, 2021	By:	/s/ Will Brown
	Name:	Will Brown
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)