Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 22, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Registrant Name | HEAT BIOLOGICS, INC. | ||
Title of 12(b) Security | Common Stock, $0.0002 par value per share | ||
Trading Symbol | HTBX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 89,996,793 | ||
Entity Common Stock, Shares Outstanding | 25,410,098 | ||
Entity Central Index Key | 0001476963 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 10,931,890 | $ 9,039,887 |
Short-term investments | 100,842,438 | 5,713,922 |
Accounts receivable | 177,239 | 34,986 |
Prepaid expenses and other current assets | 1,842,620 | 420,328 |
Total Current Assets | 113,794,187 | 15,209,123 |
Property and Equipment, net | 676,262 | 559,410 |
Other Assets | ||
In-process R&D | 5,866,000 | 5,866,000 |
Goodwill | 1,452,338 | 1,452,338 |
Operating lease right-of-use asset | 2,035,882 | 2,287,500 |
Finance lease right-of-use asset | 247,194 | 187,573 |
Deposits | 122,779 | 394,637 |
Total Other Assets | 9,724,193 | 10,188,048 |
Total Assets | 124,194,642 | 25,956,581 |
Current Liabilities | ||
Accounts payable | 1,051,764 | 1,503,342 |
Deferred revenue, current portion | 603,717 | 3,410,319 |
Contingent consideration, current portion | 1,124,970 | |
Contingent consideration, related party - current portion | 454,364 | |
Operating lease liability, current portion | 278,753 | 216,832 |
Finance lease liability, current portion | 108,127 | 49,104 |
Accrued expenses and other liabilities | 1,614,534 | 1,676,467 |
Total Current Liabilities | 3,656,895 | 8,435,398 |
Long Term Liabilities | ||
Other long-term liabilities | 36,243 | |
Derivative warrant liability | 33,779 | |
Deferred tax liability | 361,911 | 361,911 |
Deferred revenue, net of current portion | 237,500 | 200,000 |
Operating lease liability, net of current portion | 1,301,636 | 1,519,574 |
Financing lease liability, net of current portion | 160,240 | 142,667 |
Contingent consideration, net of current portion | 2,250,844 | 1,653,197 |
Contingent consideration, related party - net of current portion | 661,671 | 485,984 |
Total Liabilities | 8,700,719 | 12,798,731 |
Commitments and Contingencies (Note 9 and 13) | ||
Stockholders' Equity | ||
Common stock, $.0002 par value; 250,000,000 and 100,000,000 shares authorized, 22,592,500 and 4,826,565 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 4,519 | 965 |
Additional paid-in capital | 247,048,349 | 118,179,635 |
Accumulated deficit | (130,647,485) | (104,597,748) |
Accumulated other comprehensive loss | (166,056) | (11,250) |
Total Stockholders' Equity - Heat Biologics, Inc. | 116,239,327 | 13,571,602 |
Non-Controlling Interest | (745,404) | (413,752) |
Total Stockholders' Equity | 115,493,923 | 13,157,850 |
Total Liabilities and Stockholders' Equity | $ 124,194,642 | $ 25,956,581 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 11, 2020 | Dec. 10, 2020 | Mar. 20, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | |||||
Common stock, par value (in dollars per share) | $ 0.0002 | $ 0.0002 | |||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 100,000,000 | ||
Common stock, shares issued | 22,592,500 | 22,800,000 | 159,800,000 | 4,826,565 | |
Common stock, shares outstanding | 22,592,500 | 22,800,000 | 159,800,000 | 4,826,565 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue: | ||
Grant and contract revenue | $ 2,947,969 | $ 3,049,104 |
Operating expenses: | ||
Research and development | 12,938,895 | 13,013,604 |
General and administrative | 14,934,436 | 9,431,015 |
Goodwill impairment loss | 0 | 737,000 |
Change in fair value of contingent consideration | 1,199,000 | 613,290 |
Total operating expenses | 29,072,331 | 23,794,909 |
Loss from operations | (26,124,362) | (20,745,805) |
Change in fair value of warrant liability | (1,012,167) | |
Investor relations expense | (66,767) | |
Interest income | 566,718 | 431,824 |
Other income (expense), net | 255,189 | (25,557) |
Total non-operating (loss) income | (257,027) | 406,267 |
Net loss before income taxes | (26,381,389) | (20,339,538) |
Income tax expense | (45,178) | |
Net loss | (26,381,389) | (20,384,716) |
Net loss - non-controlling interest | (331,652) | (367,148) |
Net loss attributable to Heat Biologics, Inc. | $ (26,049,737) | $ (20,017,568) |
Net loss per share applicable to Heat Biologics, Inc - basic and diluted | $ (1.63) | $ (4.21) |
Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.-basic and diluted | 15,982,568 | 4,754,542 |
Comprehensive loss | ||
Net loss | $ (26,381,389) | $ (20,384,716) |
Unrealized (loss) gain on foreign currency translation | (154,806) | 8,654 |
Total comprehensive loss | (26,536,195) | (20,376,062) |
Comprehensive loss attributable to non-controlling interest | (331,652) | (367,148) |
Comprehensive loss - Heat Biologics, Inc. | $ (26,204,543) | $ (20,008,914) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | APIC | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Non-Controlling Interest | Total |
Balance at Dec. 31, 2018 | $ 928 | $ 114,888,706 | $ (84,580,180) | $ (19,904) | $ (46,604) | $ 30,242,946 |
Issuance of common stock | 3 | 18,895 | 18,898 | |||
Exercise of stock options | 2,120 | 2,120 | ||||
Issuance of common stock from vesting of restricted stock awards | 34 | (34) | ||||
Stock based compensation | 3,269,948 | 3,269,948 | ||||
Other comprehensive loss | 8,654 | 8,654 | ||||
Net loss | (20,017,568) | (367,148) | (20,384,716) | |||
Balance at Dec. 31, 2019 | 965 | 118,179,635 | (104,597,748) | (11,250) | (413,752) | 13,157,850 |
January 2020 investment offering, net of underwriters discounts | 572 | 4,105,577 | 4,106,149 | |||
ATM raise | 2,635 | 117,370,860 | 117,373,495 | |||
Exercise of warrants | 227 | 3,442,095 | 3,442,322 | |||
Exchange of warrants | 64 | 773,266 | 773,330 | |||
Payment of cash in lieu of fractional shares | (97,052) | (97,052) | ||||
Stock issuance costs | (3,103,833) | (3,103,833) | ||||
Issuance of common stock from vesting of restricted stock awards | 56 | (56) | ||||
Stock based compensation | 6,377,857 | 6,377,857 | ||||
Other comprehensive loss | (154,806) | (154,806) | ||||
Net loss | (26,049,737) | (331,652) | (26,381,389) | |||
Balance at Dec. 31, 2020 | $ 4,519 | $ 247,048,349 | $ (130,647,485) | $ (166,056) | $ (745,404) | $ 115,493,923 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (26,381,389) | $ (20,384,716) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Goodwill impairment loss | 0 | 737,000 |
Depreciation and amortization | 333,152 | 232,506 |
Noncash lease expense | 95,600 | 39,116 |
Noncash interest expense | 17,972 | 954 |
Loss on disposal of equipment | 11,998 | |
Noncash investor relations expense | 66,767 | |
Stock-based compensation | 6,377,857 | 3,269,948 |
Change in fair value of common stock warrants | 1,012,167 | |
Change in fair value of contingent consideration | 1,199,000 | 613,290 |
Unrealized gain on investments | (44,871) | (5,457) |
Increase (decrease) in cash arising from changes in assets and liabilities: | ||
Accounts receivable | (140,559) | (6,472) |
Prepaid expenses and other current assets | (1,419,395) | 540,789 |
Operating lease right-of-use asset | (590,210) | |
Accounts payable | (452,778) | 529,269 |
Deferred revenue | (2,769,101) | 2,377,780 |
Deferred tax liability | 45,178 | |
Accrued expenses and other liabilities | (223,882) | 8,518 |
Other long-term liabilities | 36,243 | (213,724) |
Deposits | 271,858 | (43,417) |
Net Cash Used in Operating Activities | (22,021,359) | (12,837,650) |
Cash Flows from Investing Activities | ||
Purchase of short-term investments | (105,925,802) | (138,438) |
Sale of short-term investments | 10,842,157 | |
Purchase of property and equipment | (337,972) | (265,188) |
Proceeds from disposal of property and equipment | 2,168 | 109,630 |
Net Cash Used in Investing Activities | (95,419,449) | (293,996) |
Cash Flows from Financing Activities | ||
Proceeds from public offering of common stock and warrants, net of issuance costs | 6,600,971 | |
Proceeds from the issuance of common stock, net of underwriting discounts and commissions | 117,373,495 | 18,898 |
Proceeds from exercise of stock options | 2,120 | |
Proceeds from exercise of warrants | 675,675 | |
Stock issuance costs | (3,103,833) | (1,966) |
Cash paid for fractional shares in connection with reverse stock split | (97,052) | |
Payment of contingent consideration | (2,005,000) | |
Proceeds from PPP loan | 702,000 | |
Repayment of PPP loan | (702,000) | |
Repayments on principal of finance lease | (115,199) | |
Net Cash Provided by Financing Activities | 119,329,057 | 19,052 |
Effect of exchange rate changes on cash and cash equivalents | 3,754 | (1,770) |
Net Change in Cash and Cash Equivalents | 1,892,003 | (13,114,364) |
Cash and Cash Equivalents – Beginning of Period | 9,039,887 | 22,154,251 |
Cash and Cash Equivalents – End of Period | 10,931,890 | 9,039,887 |
Supplemental Disclosure for Cash Flow Information: | ||
Operating lease right-of-use assets obtained with lease liabilities | 75,244 | 1,945,617 |
Finance lease right-of-use assets obtained with lease liabilities | 173,822 | $ 192,783 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Allocation of proceeds from public offering to warrant liabilities | 2,494,823 | |
Cashless exercise of warrants classified as liabilities | 2,766,647 | |
Cashless exchange of warrants classified as liabilities | $ 773,330 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2020 | |
Organization | |
Organization | 1. Organization Heat Biologics is a biopharmaceutical company primarily engaged in the development of immune therapies and vaccines. Our gp96 platform is designed to activate the immune system. This platform has broad applications in cancer and infectious disease. The Company platform leverages gp96’s role as a natural molecular warning system that presents antigens to the immune system. HS-110 (viagenpumatucel-L) is the Company’s first allogeneic (“off-the-shelf”) cell line biologic product candidate in a series of proprietary immunotherapies designed to stimulate a patient’s T-cells to destroy cancer. HS-130 is an allogeneic cell line engineered to express the extracellular domain of OX40 ligand fusion protein (OX40L-Fc), a key costimulator of T-cells, with the potential to augment antigen-specific CD4+ T-cell and CD8+ T-cell responses. We have initiated development of a new COVID-19 vaccine program under our Zolovax, Inc. subsidiary that utilizes our gp96 platform to secrete SARS-CoV-2 antigens. The Company’s subsidiary Pelican Therapeutics, Inc. (“Pelican”), is developing PTX-35, a novel T-cell co-stimulator agonist antibody targeting TNFRSF25 for systemic administration. These programs are designed to harness the body's natural antigen specific immune activation and tolerance mechanisms to reprogram immunity and provide a long-term, durable clinical effect. The Company has completed recruiting patients in its Phase 2 HS-110 non-small cell lung cancer (NSCLC) trial, dosed twelve patients in our Phase 1 clinical trial of HS-130 and dosed five patients in our Phase 1 clinical trial of PTX-35. The Company is also providing pre-clinical, CMC development, and administrative support for these operations; while constantly focusing on protecting and expanding our intellectual property in areas of strategic interest. As the Company advances its clinical programs, it is in close contact with the CROs and clinical sites and are assessing the impact of COVID-19 on the studies and current timelines and costs. Unless otherwise noted, all share and per share data referenced in the consolidated financial statements and the notes thereto have been retroactively adjusted to reflect the one-for-seven reverse stock split effective December 11, 2020. As a result of the reverse stock split, certain amounts in the consolidated financial statements and the notes thereto may be slightly different than previously reported due to rounding of fractional shares, and certain amounts within the consolidated balance sheets were reclassified between common stock and additional paid-in capital. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of Heat Biologics, Inc. and its subsidiaries, Heat Biologics, Inc. (“the Company”), and its subsidiaries, Pelican Therapeutics, Inc. (“Pelican”), Heat Biologics I, Inc. (“Heat I”), Heat Biologics III, Inc. (“Heat III”), Heat Biologics IV, Inc. (“Heat IV”), Heat Biologics GmbH, Heat Biologics Australia Pty Ltd., Zolovax, Inc., Skunkworx Bio, Inc. (formerly known as Delphi Therapeutics, Inc.), and Scorpion Biosciences, Inc. As of December 31, 2020, there was no activity for Scorpion Biosciences, Inc. The functional currency of the entities located outside the United States of America (the foreign entities) is the applicable local currency of the foreign entities. Assets and liabilities of the foreign entities are translated at period-end exchange rates. Statement of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive loss, which is a component of accumulated other comprehensive loss in stockholders’ equity. All significant intercompany accounts and transactions have been eliminated in consolidation. The December 31, 2020 and 2019 year-end financials include 85% controlling interest in Pelican. Heat accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. GAAP. Accordingly, the Company presents non-controlling interest as a component of stockholders’ equity on its consolidated balance sheets and reports non-controlling interest net loss under the heading “net loss – non-controlling interest” in the consolidated statements of operations and comprehensive loss. Liquidity and Capital Resources The Company has an accumulated deficit of $130.6 million as of December 31, 2020 and a net loss of approximately $26.4 million for the year ended December 31, 2020 and has not generated significant revenue or positive cash flows from operations. The Company expects to incur significant expenses and continued losses from operations for the foreseeable future. The Company expects its expenses to increase in connection with its ongoing activities, particularly as the Company continues its research and development and advances its clinical trials of, and seeks marketing approval for, its product candidates. In addition, if the Company obtains marketing approval for any of its product candidates, the Company expects to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, the Company will need to obtain substantial additional funding in connection with its continuing operations. Adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or any future commercialization efforts. To meet its capital needs, the Company intends to continue to consider multiple alternatives, including, but not limited to, additional equity financings such as sales of its common stock under at-the-market offerings, if available, debt financings, partnerships, collaborations and other funding transactions. On April 23, 2020, the Company filed a shelf registration statement on Form S-3 (the "Registration Statement"). Pursuant to the Registration Statement, the Company may offer and sell securities having an aggregate public offering price of up to $150 million. In connection with the filing of the Registration Statement, the Company also entered into an amendment to its sales agreement (“Common Stock Sales Agreement”) with B. Riley FBR, as sales agent, pursuant to which the Company may issue and sell shares of its common stock under an at-the-market (the “ATM”) offering program. On August 24, 2020, the Company amended and restated the Common Stock Sales Agreement (the “Amended and Restated Common Stock Sales Agreement”) to include Cantor Fitzgerald & Co. (“Cantor”) as an additional sales agent for the ATM. Pursuant to the ATM, the Company will pay B. Riley FBR or Cantor (each a “Designated agent” and collectively, the “Agents”), a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock. As of December 31, 2020, the Company had approximately $111.8 million in cash and cash equivalents and short-term investments, which it believes is sufficient to fund its operations for at least one year from the date these consolidated financial statements were issued. This is based on the Company’s current estimates, and the Company could use its available capital resources sooner than it currently expects. The Company is continually evaluating various cost-saving measures considering its cash requirements in order to focus resources on its product candidates. The Company will need to generate significant revenues to achieve profitability, and it may never do so. Risk and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s potential drug candidates, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses. With the global spread of the ongoing COVID-19 pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its business. The extent to which the COVID-19 pandemic impacts the Company’s business, the clinical development of the Company’s products, the business of the Company’s suppliers and other commercial partners, the Company’s corporate development objectives and the value of and market for the Company’s common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The Company’s in human phase 1 trial of HS-130 was subject to an approximate 8 week enrollment pause in April and May 2020 due to lack of personal protection equipment (“PPE”) at a clinical site. The site ceased all non-critical/non-essential patient procedures until PPE supplies were available. Enrollment resumed and no delays in overall development milestones are expected for HS-130. With the global spread of the ongoing novel coronavirus (“COVID-19”) pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its employees and business. While the Company is experiencing limited financial impacts at this time, given the global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces. On April 23, 2020, Heat and Pelican received loan proceeds of $0.7 million from Regions Bank, N.A, pursuant to the Paycheck Protection Program, or the PPP Loan, under the CARES Act, administered by the U.S. Small Business Administration. On April 28, 2020, we returned all $0.7 million in proceeds from the PPP Loan. The Company relies on third-party manufacturers to purchase from their third-party vendors the materials necessary to produce product candidates and manufacture product candidates for clinical studies. The Company also depends on third-party suppliers for key materials and services used in research and development, as well as manufacturing processes, and are subject to certain risks related to the loss of these third-party suppliers or their inability to supply adequate materials and services. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts and is dependent on these third parties for the production of its therapeutic candidates in accordance with relevant regulations (such as current Good Manufacturing Practices, or cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation. Use of Estimates The preparation of 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. Estimates are used for, but not limited to, useful lives of fixed assets, contingent consideration, valuation of goodwill and in process research and development (“IPR&D”), income taxes, valuation of warrant liabilities, and stock-based compensation. Actual results may differ from those estimates. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements and accompanying notes to the consolidated financial statements including the related party contingent consideration payable, which is now presented as a separate line item on the Company's consolidated balance sheets. Segments The Company has one reportable segment – the development of immunotherapies designed to activate and expand a patient’s T-cell mediated immune system against cancer. Cash and Cash Equivalents The Company considers all cash and other highly liquid investments with initial maturities from the date of purchase of three months or less to be cash and cash equivalents. Short-term Investments The Company’s short-term investments consist of equity securities and are carried at fair value. Unrealized gains and losses on securities are reported in the statement of operations. The Company classifies marketable equity investments available to fund current operations as current assets on its consolidated balance sheets. Derivative Financial Instruments The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of the warrants, which were deemed to be derivative instruments, was recorded as a derivative liability under the provisions of ASC Topic 815 Derivatives and Hedging (“ASC 815”) because they are not considered indexed to the Company’s own stock. Subsequently, the liability is adjusted to fair value as of the end of each reporting period and the changes in fair value of derivative liabilities are recorded in the consolidated statements of operations and comprehensive loss under the caption “Change in fair value of warrant liability.” The fair value of the warrants, including the warrants issued in connection with the January 2020 common stock offering and recorded as liability, was determined using the Monte Carlo simulation model, deemed to be an appropriate model due to the terms of the warrants issued. The fair value of warrants was affected by changes in inputs to the Monte Carlo simulation model including the Company’s stock price, expected stock price volatility, the remaining term, and the risk-free interest rate. At December 31, 2020, the fair value of such warrants was $33,779, which is classified as a long-term derivative warrant liability on the Company’s consolidated balance sheets. Concentration of Credit Risk At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has never experienced any losses related to these balances. As of December 31, 2020, and 2019, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2020 was $10,367,714. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. Property and Equipment Property and equipment are stated at cost and are capitalized. Depreciation is calculated using the straight-line method and is based on estimated useful lives of five years for lab equipment, three years for computer equipment, eight years for furniture and fixtures and five years for leasehold improvements. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year. Fully diluted net loss per share is computed using the weighted average number of common shares and dilutive securities outstanding during each year. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation. Fair Value of Financial Instruments The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other payables approximate fair value due to their short maturities. As a basis for determining the fair value of certain of the Company’s financial instruments, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level I – Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level II – Observable inputs, other than Level I prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level III – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The Company’s cash equivalents are classified within Level I of the fair value hierarchy. As of December 31, 2020, and December 31, 2019, the fair values of cash, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The Company’s short-term investments consist of Level I securities which are comprised of highly liquid money market funds. The estimated fair value of the short-term investments was based on quoted market prices. There were no transfers between fair value hierarchy levels during the years ended December 31, 2020 or 2019. In January 2020, the Company issued warrants in connection with the public offering of common stock (the “January 2020 Warrants”). Pursuant to the terms of these warrants, the warrants were not considered indexed to the Company’s own stock and therefore are required to be measured at fair value and reported as a liability in the consolidated balance sheets. Additionally, upon the closing of the January 2020 offering, 479,595 outstanding warrants were evaluated whether they were modified for accounting purpose and were determined that they were required to be classified as a liability. The fair value of the warrant liability is based on the Monte Carlo methodology. The Company is required to revalue the warrants at each reporting date with any changes in fair value recorded on our consolidated statement of operations and comprehensive loss. The valuation of the warrants is classified under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. In order to calculate the fair value of the warrants, certain assumptions were made, including the selling price or fair market value of the underlying common stock, risk-free interest rate, volatility, and remaining life. Changes to the assumptions could cause significant adjustments to valuation. The Company estimated a volatility factor utilizing its own data. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The Monte Carlo simulation was used to value the liability-classified warrants, including the warrants reclassified from equity to liability. The following weighted average assumptions were used: January 21, 2020 Current stock price $ 2.31 Estimated volatility of future stock price 124 % Risk free interest rate 1.53 % Expected term 3.7 years During the year ended December 31, 2020, 470,238 warrants were exchanged for 319,756 shares of common stock. As of December 31, 2020, there were a total of 9,357 warrants outstanding that were reported as a liability on the consolidated balance sheet. The fair value of financial instruments measured on a recurring basis is as follows: As of December 31, 2020 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 100,842,438 $ 100,842,438 — — Liabilities: Contingent consideration $ 2,912,515 — — $ 2,912,515 Warrant liability $ 33,779 — — $ 33,779 As of December 31, 2019 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,713,922 $ 5,713,922 — — Liabilities: Contingent consideration $ 3,718,515 — — $ 3,718,515 The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the year ended December 31, 2020: Contingent Warrant Consideration Liability Balance at December 31, 2019 $ 3,718,515 $ — Fair value at issuance — 2,494,823 Reclassification of warrants from equity to liability due to modification — 869,078 Reclassification of warrant liability to equity upon cashless exercise of warrants — (2,766,647) Reclassification of warrant liability to equity upon exchange of warrants — (1,575,642) Payout of contingent consideration (2,005,000) — Change in fair value 1,199,000 1,012,167 Balance at December 31, 2020 $ 2,912,515 $ 33,779 The change in the fair value of the contingent consideration of $1,199,000 and $613,290 for the years ended December 31, 2020 and 2019, respectively, was primarily due to the effect of the change in discount rate, probability of achieving milestones, and passage of time on the fair value measurement. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s consolidated statement of operations and comprehensive loss. The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements of contingent consideration classified as Level 3 as of December 31, 2020 and 2019: As of December 31, 2020 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2022-2030 Discount rate 7.66% Probability of occurrence 2.7% to 68% As of December 31, 2019 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2020-2030 Discount rate 7.83% Probability of occurrence 2.1% to 82% The following table presents quantitative information about the inputs used in the valuation for the Company’s fair value measurement of the warrant liability classified as Level 3 as of December 31, 2020: December 31, 2020 Current stock price $ 5.36 Estimated volatility of future stock price 141.28 % Risk free interest rate 0.17 % Contractual term 2.90 years The Company measures certain non-financial assets on a non-recurring basis, including goodwill and in-process R&D. As a result of those measurements, during the year ended December 31, 2019, goodwill with a total carrying value of $2.2 million was written down to its estimated fair value of $1.5 million and an impairment charge of $0.7 million was recorded. The Company uses a present value technique to estimate the fair value of these assets. This analysis requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. Income Tax Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In accordance with FASB ASC 740, Accounting for Income Taxes, the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained by a taxing authority. As of December 31, 2020 and 2019, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of operations. As of December 31, 2020 and 2019, the Company had no such accruals. Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employee directors using a fair value method that requires the recognition of compensation expense for costs related to all stock-based payments, including stock options and restricted stock units. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. The fair value of restricted stock units is estimated based on the closing price of the Company’s stock on the date of grant, and for the purposes of expense recognition, the total new number of shares expected to vest is adjusted for estimated forfeitures. Stock-based compensation costs are based on the fair value of the underlying option calculated using the Black-Scholes-Merton option pricing model on the date of grant for stock options and are recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, forfeiture rates and expected term. The expected volatility rates are estimated based on average historical stock price volatility of its own data plus an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms. The expected term for the years ended December 31, 2020 and 2019 represents the average time that options are expected to be outstanding based on the average of the vesting term and the contractual term of the option. We account for forfeitures as they occur. The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. Net loss attributable to non-controlling interests Net loss attributable to non-controlling interests is the result of the Company’s consolidation of subsidiaries of which it does not own 100%. In October 2018, the Company entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in the Company’s subsidiaries, Heat I, Inc. and Pelican, a related party prior to acquisition, for 35,000 shares of the Company’s common stock. The stock exchange resulted in the Company owning 100% of Heat I, Inc. and increasing its controlling ownership in Pelican from 80% to 85%. The Company’s net loss attributable to non-controlling interests relates to the 15% ownership of Pelican that Heat does not own as of December 31, 2020 and 2019. Revenue Recognition Effective January 1, 2019, the Company has adopted ASU No. 2018-08 Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The Company’s primary source of revenue is grant revenue related to the CPRIT contract, which is being accounted for under ASC 958 as a conditional non-exchange contribution. The CPRIT grant covers the periods from June 1, 2017 through May 31, 2021, for a total grant award of up to $15.2 million. CPRIT advances grant funds upon request by the Company consistent with the agreed upon amounts and schedules as provided in the contract. The first tranche of funding of $1.8 million was received in May 2017, and a second tranche of funding of $6.5 million was received in October 2017, and the third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be awarded, on a reimbursement basis, after we have fulfilled every requirement of the grant and the grant has been approved to be finalized. Funds received are reflected in deferred revenue as a liability until revenue is earned. Grant revenue is recognized when qualifying costs are incurred. As of December 31, 2020, the deferred revenue balance was $0.6 million with $13.1 million recognized as revenue since contract inception. On January 7, 2020, the Company was awarded a grant of up to $224,713 from the NIH. The NIH grant provides funding for continued development of the Company’s technologies for PTX-35. The grant funds will be made available by the NIH to the Company as allowable expenses are incurred. For the year ended December 31, 2020, the Company incurred approximately $0.1 million of allowable expenses under the NIH grant and recognized a corresponding amount of grant revenues. Business Combinations We account for acquisitions using the acquisition method of accounting, which requires that all identifiable assets acquired and liabilities assumed be recorded at their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired patented technology. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed (see Note 4). Goodwill and In-Process Research and Development The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of definite-lived intangible assets after considering specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, and other economic facts; including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their estimated useful lives. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate a potential impairment exists, using a fair value-based test. Pursuant to ASU 2017-04, the Company must record a goodwill impairment charge if a reporting unit’s carrying value exceeds its fair value. See Note 7 regarding impairment at December 31, 2019. IPR&D, assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that the Company acquires, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. Deferred Revenue Deferred revenue is comprised of proceeds of $0.6 million received from CPRIT for which the costs have not been incurred or the conditions of the award have not been met and grant funds received from an economic development grant agreement with the City of San Antonio (“Economic Development Grant”) that we entered into on November 1, 2017. Under the Economic Development Grant, we received $0.2 million in state enterprise fund grants for the purpose of defraying costs toward the purchase of laboratory equipment. As part of the agreement, we will provide the city of San Antonio with a purchase money security interest in the equipment to secure the repayment of grant funds should we fail to perform under the terms and conditions of the agreement. Our obligations under the agreement include meeting certain employment levels for a period of not less than seven years commencing on or before December 31, 2017 and establishing Pelican’s corporate headquarters in San Antoni |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2020 | |
Short-Term Investments | |
Short-Term Investments | 3. Short-Term Investments Short-term investments consist of equity securities with a maturity of greater than three months when acquired. The Company holds its securities at fair value as of December 31, 2020 and 2019. Unrealized gains and losses on securities are reported in the statement of operation. Short-term investments at December 31, 2020 and 2019 consisted of mutual funds with fair values of $100.8 million and $5.7 million, respectively. |
Acquisition of Pelican Therapeu
Acquisition of Pelican Therapeutics | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition of Pelican Therapeutics | |
Acquisition of Pelican Therapeutics | 4. Acquisition of Pelican Therapeutics In 2017, the Company consummated the acquisition of 80% of the outstanding equity of Pelican, a related party, and Pelican became a majority owned subsidiary of the Company. During the quarter ended March 31, 2018, cash consideration of approximately $300,000 was distributed to the participating Pelican stockholders and the remainder of approximately $200,000 for certain Pelican liabilities not satisfied was recognized as other income in the statements of operations and comprehensive loss for the period. In October 2018, Heat entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in Heat’s subsidiaries, Heat I, Inc. and Pelican. The stock exchange resulted in Heat increasing its controlling ownership in Pelican from 80% to 85%. Under the agreement, the Company is also obligated to make future payments based on the achievement of certain clinical and commercialization milestones, as well as low single digit royalty payments and payments upon receipt of sublicensing income. · $1.5 million upon Pelican’s dosing of the first patient in its first Phase 2 trial for an oncology indication; · $3.0 million upon successful outcome of the first Phase 2 trial for an oncology indication; · $6.0 million upon Pelican’s dosing of the first patient in its first Phase 3 trial for an oncology indication; · $3.0 million upon Pelican’s dosing of the first patient in its first Phase 3 trial for a non- oncology indication; · $7.5 million upon successful outcome of the first Phase 3 trial for an oncology indication; · $3.0 million upon successful outcome of the first Phase 3 trial for a non-oncology indication; · $7.5 million upon acceptance of a Biologics License Application (BLA) submission for an oncology indication; · $3.0 million upon acceptance of a BLA submission for a non-oncology indication; · $7.5 million upon first product indication approval in the United States or Europe for an oncology indication; · $3.0 million upon first product indication approval in the United States or Europe for a non-oncology indication. The fair value of these future milestone payments is reflected in the contingent consideration account under current liabilities with the non-current portion under long term liabilities on the balance sheet. The estimated fair value of the contingent consideration was determined using a probability-weighted income approach. The Company estimates the fair value of the contingent consideration on a quarterly basis. At the time of the Pelican acquisition, the Company’s CEO and certain affiliated entities as well as two of the Company’s directors and certain affiliated entities directly or indirectly owned shares of Pelican common stock purchased by the Company. As a result, approximately 22.7% of any such milestone payments will be paid to certain directors of the Company which is presented separately on the balance sheet as contingent consideration, related party - net of current portion. On June 22, 2020, the Company achieved the first milestone of $2.0 million when it dosed the first patient in the first Phase 1 clinical trial of PTX-35. Goodwill was calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill resulting from this acquisition related largely to synergies expected from combining the operations. The goodwill is not deductible for income tax purposes. In-process research and development assets are treated as indefinite-lived until the completion or abandonment of the associated research and development (“R&D”) program, at which time the appropriate useful lives will be determined. The Company calculated the fair value of the non-controlling interest acquired in the acquisition as 20% of the equity interest of Pelican, adjusted for a minority interest discount . As discussed in Note 10, in May 2016, Pelican was awarded a $15.2 million CPRIT Grant from CPRIT for development of Pelican’s lead product candidate, PTX-35. The CPRIT Grant is expected to support Peli can in developing PTX-35 through a Phase 1 clinical trial designed to evaluate PTX-35 in combination with other immunotherapies or as a monotherapy. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expenses And Other Current Assets. | |
Prepaid Expenses and Other Current Assets | 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following at: December 31, December 31, 2020 2019 Prepaid manufacturing expense $ 316,411 $ 148,156 Prepaid insurance 612,293 120,851 Prepaid preclinical and clinical expenses 690,543 22,319 Other prepaid expenses and current assets 223,373 109,843 Other current assets — 19,159 $ 1,842,620 $ 420,328 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over estimated useful lives ranging generally from five to seven years. Expenditures for maintenance and repairs are charged to expense as incurred. Property and equipment consisted of the following at: December 31, December 31, 2020 2019 Lab equipment $ 1,607,238 $ 1,311,853 Computers 71,058 53,065 Furniture and fixtures 64,523 50,453 Leasehold improvements 22,563 14,259 Total 1,765,382 1,429,630 Accumulated depreciation (1,089,120) (870,220) Property and equipment, net $ 676,262 $ 559,410 Depreciation expense totaled $218,951 and $227,296 for the years ended December 31, 2020 and 2019, respectively. |
Goodwill and In-process R&D
Goodwill and In-process R&D | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and In-process R&D | |
Goodwill and In-process R&D | 7. Goodwill and In-process R&D Goodwill of $2.2 million and in-process R&D of $5.9 million were recorded in connection with the acquisition of Pelican, as described in Note 4. The Company performs an annual impairment test at the reporting unit level as of April 1st of each fiscal year. As of April 1, 2020, the Company qualitatively assessed whether it is more likely than not that the respective fair value of the reporting unit is less than its carrying amount, including goodwill. Based on that assessment, the Company determined that this condition does not exist. As such, performing the first step of the two-step test impairment test was unnecessary. No impairment was recorded during the year ended December 31, 2020. However, during the year ended December 31, 2019, the Company experienced a sustained decline in the quoted market price of the Company’s common stock and as a result the Company determined that as of December 31, 2019 it was more likely than not that the carrying value of these acquired intangibles exceeded their estimated fair value. Accordingly, the Company performed an interim impairment analysis as of that date using the income approach. This analysis required significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. Pursuant to ASU 2017 04, the Company recorded a goodwill impairment charge for the excess of the reporting unit’s carrying value over its fair value. During the year ended December 31, 2019, goodwill with a total carrying value of $2.2 million was written down to its estimated fair value of $1.5 million and an impairment charge of $0.7 million was recorded. The following table provides the Company’s goodwill as of December 31, 2020. There was no goodwill impairment during the year ended December 31, 2020. Goodwill Balance at December 31, 2020 $ 1,452,338 The following table provides the Company’s in-process R&D as of December 31, 2020. There was no change in in-process R&D during the years ended December 31, 2020 and 2019. In-process R&D In-process R&D from acquisition of Pelican $ 5,866,000 . |
Accrued expenses
Accrued expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued expenses | |
Accrued expenses | 8. Accrued Expenses Accrued expenses consist of the following at: December 31, December 31, 2020 2019 Accrued preclinical and clinical trial expenses $ 628,000 $ 1,156,618 Accrued manufacturing expenses 175,089 — Compensation and related benefits 209,600 303,870 Accrued franchise tax 172,500 — Other expenses 429,345 215,979 $ 1,614,534 $ 1,676,467 |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2020 | |
License Agreements | |
License Agreements | 9. License Agreements University of Miami · Beginning in 2008, the Company has entered into various agreements with the University of Miami (“UM”) for intellectual and tangible property rights relating to the ImPACT ® , technology activities (“License Agreement 03‑31, 05‑39” and “License Agreement 97‑14”, or collectively “License Agreements”). These license agreements were subsequently assigned to the Company’s subsidiary Heat Biologics I, Inc. (Heat I) which issued to UM shares of its common stock representing seven and one-half percent (7.5%) of its common stock. The term of the license is the length of the last to expire patent, unless terminated earlier. · The Company agreed to make minimum royalty payments of $10,000 for three years beginning in 2010 that are due on the anniversary date of the agreement for License Agreement 97‑14. Beginning in 2013, and thereafter for the life of the agreement, the minimum royalty payment shall be $20,000 due on the same date. In July 2016, the Company and UM entered into an amendment which replaced the milestone payment of $250,000 by approval of a BLA for the lung cancer vaccine with a payment of $500,000 upon approval of an NDA for a lung cancer vaccine covered by Patent Rights. · In August 2009, Heat I and UM entered into a second amendment (“Amendment 2”) to License Agreement UMSS-114A to extend the foregoing payment due dates for all past due license fees and patent costs. · On February 18, 2011, Heat I entered into a license agreement (“SS114A”) with UM to obtain additional technology related to License Agreement 97‑14. Heat I agreed to reimburse UM for all past patent costs of $37,381. As partial consideration for SS114A, Heat II agreed to grant back certain exclusive rights to UM. · In addition, Heat entered into an agreement for “Modified Heat Shock Proteins-Antigenic Peptide Complex” with UM in September 2014 for a cancer cell line where UM agreed not to license the cell line to third parties while the Company is in good standing and in compliance of its patent license agreements with UM relating to our ImPACT ® platform. There is no financial obligation on the Company’s part under the arrangement. · On October 25, 2016, the Company entered into an exclusive license agreement with UM for the license and development of intellectual property related to its gp96 platform to target the Zika virus and other infectious diseases. As consideration for the rights granted in this license agreement the Company is obligated to pay UM an upfront license fee of $20,000 and nominal annual maintenance fees over the initial ten years that total $82,000 and increasing thereafter. The Company is obligated to pay royalties equal to a percentage (mid-single digits) of net sales of products covered by the patent-related rights, subject to reduction if additional licenses from third parties are required to commercialize licensed products . · On December 7, 2020, the Company entered into separate amendments to its existing three license agreements with the University of Miami to extend to December 31, 2025, the date by which the University of Miami may terminate the license agreements if by such date the Company will not have introduced a licensed product into the commercial marketplace in one of the three major markets (European Union, Japan and the United States) or will not have made best efforts to achieve the same. The three license agreements so amended are: (i) License Agreement (UMSS-114 (previously UM 97-14)) between the University of Miami and Heat Biologics, Inc. effective July 11, 2008, (ii) License Agreement (D-107) between the University of Miami and Heat I, Inc. effective February 18, 2011, and (iii) License Agreement (UMSS-114A) between the University of Miami and Heat I, Inc. effective February 18, 2011. University of Miami - Pelican · For each agreement, the Company agreed to make minimum royalty payments of $10,000 for three years beginning 2010 due on the anniversary date of the agreements to the University of Miami. Beginning in 2013, and thereafter for the life of the agreements, the minimum royalty payments shall be $20,000 due on the same date. License 0331, 0539: · Pelican is obligated to make milestone payments as follows: $150,000 due upon submission and approval of an IND and the completion of a Phase 1 clinical trial and $250,000 due upon the earlier of May 2022 or approval of an NDA. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. · In August 2009, Pelican and UM entered into a second amendment (“Amendment 2”) to License Agreement 0331, 0539 to extend the foregoing payment due dates for all past due license fees and patent costs. · In February 2010, Pelican and UM entered into a third amendment (“Amendment 3”) to License Agreement 0331, 0539 to grant back to UM a certain nonexclusive license. In all other respects, the original agreement remained the same. · In October 2010, Pelican and UM entered into a fourth amendment (“Amendment 4”) to License Agreement 0331, 0539 to grant to the licensor a nonexclusive license right for certain technology as research reagents and research tools. License I176: · On December 12, 2010, Pelican entered into another license agreement (“I176”) with UM for one component of complimentary technology to the July 11, 2008 agreement. Pelican agreed to pay UM a license fee of $50,000 and a reimbursement of $15,797 for past patent fees. Pelican also agreed to make a minimum royalty payment of $10,000 during 2012 through 2014 and then $20,000 every year thereafter. Pelican is obligated to make milestone payments as follows: $150,000 due upon submission and approval of an IND and the completion of a Phase 1 clinical trial and $500,000 due upon the earlier of May 2022 or approval of an NDA. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. · In August 2012, Pelican and UM entered into a second amendment (“I176 Amendment 2”) to License Agreement I176 to extend the foregoing payment due dates for all past due license fees and patent costs. · On December 7, 2020, the Company entered into a separate amendment to License Agreement (UMI-176) between the University of Miami and Heat Biologics, Inc. effective December 12, 2010, to extend to December 31, 2025, the date by which the University of Miami may terminate the license agreements if by such date the Company will not have introduced a licensed product into the commercial marketplace in one of the three major markets (European Union, Japan and the United States) or will not have made best efforts to achieve the same. Other License Agreements · On April 12, 2011, the Company entered into a non-exclusive evaluation and biological material license agreement with a not-for-profit corporation for evaluation and production of vaccines. In consideration for the evaluation and commercial use license, the Company agreed to pay the not-for-profit corporation a fee of $5,000 and $50,000, respectively. The Company has the option to renew the license once the original term has expired. Milestone payments are due upon certain events agreed upon by Heat and the not-for-profit corporation. In December 2015, the Company amended the evaluation and biological material license agreement to add additional cell lines in exchange for a one-time payment of $1,000. · On August 30, 2010, the Company entered into an option agreement with the University of Michigan (“University”) to acquire the right to negotiate an exclusive license for certain materials which include cancer cells and all unmodified derivatives of these cells. An option fee of $2,000 was paid on September 8, 2010 to grant a period of nine months for this consideration. In July 2011, the Company exercised the option to acquire the license for $10,000. · In June 2016, the Company entered into an exclusive license agreement with Shattuck Labs, Inc. (“Shattuck”) pursuant to which the Company licensed certain provisional patent applications and know-how related to fusion proteins to treat cancer and other diseases that were not being developed by us. Shattuck paid the Company an initial license fee of $50,000 and is obligated to pay the Company fees upon its receipt of sublicensing income, achievement of certain milestones and royalties upon sales of commercial products. Inasmuch as the technology that the Company out-licensed is in the early stages of development and there is a low likelihood of success for any technology at such stage, there can be no assurance that any products will be developed by Shattuck or that the Company will derive any revenue from Shattuck. · On December 31, 2020, Future minimum royalty payments by the Company for licenses as of December 31, 2020 are as follows (in thousands): Year ended December 31, 2021 $ 228 2022 784 2023 74 Total $ 1,086 |
Grant Revenue
Grant Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Grant Revenue | |
Grant Revenue | 10. Grant Revenue In June 2016, Pelican entered into a cancer research grant contract or Grant Contract with CPRIT, under which CPRIT awarded a grant not to exceed $15.2 million for use in developing cancer treatments by targeting a novel T-cell costimulatory receptor (namely, TNFRSF25). The Grant Contract initially covered a period from June 1, 2016 through November 30, 2019, as amended, was extended to May 30, 2021. The first tranche of funding of $1.8 million was received in May 2017, a second tranche of funding of $6.5 million was received in October 2017, and a third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be awarded on a reimbursement basis after we have fulfilled every requirement of the grant and the grant has been approved to be finalized. The grant is subject to customary CPRIT funding conditions including a matching funds requirement where Pelican will match $0.50 for every $1.00 from CPRIT. Consequently, Pelican is required to provide $7.6 million in matching funds over the life of the project. Upon commercialization of the product, the terms of the grant require Pelican to pay tiered royalties in the low to mid-single digit percentages. Such royalties reduce to less than one percent after a mid-single-digit multiple of the grant funds have been paid to CPRIT in royalties. Through December 31, 2020, $13.1 million of grant funding received to date has been recognized as revenue. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders’ Equity | |
Stockholders' Equity | 11. Stockholders’ Equity Authorized Capital Heat has authorized 10,000,000 shares of Preferred Stock (par value $0.0001) as of December 31, 2020 and 2019. As of December 31, 2020 and 2019, there were no outstanding shares of Preferred Stock. Heat had 250,000,000 shares and 100,000,000 shares of common stock (par value $0.0002) authorized as of December 31, 2020 and 2019. On March 20, 2020, an amendment to the Company’s third amended and restated certificate of incorporation to increase the authorized shares of common stock to 250,000,000 was filed. On December 10, 2020, Heat announced a reverse stock split of its shares of common stock at a ratio of 1-for-7. The reverse stock split took effect as of 12:01 a.m. ET on December 11, 2020, to trade on a post-split basis at the market open on December 11, 2020. During the Company’s annual shareholder meeting held February 27, 2020, shareholders approved the Company’s reverse stock split, and granted the board of directors the authority to implement and determine the exact split ratio. When the reverse stock split became effective, every 7 shares of the Company’s issued and outstanding common stock were combined into one share of common stock. Effecting the reverse stock split reduced the number of issued and outstanding common stock from approximately 159.8 million shares to approximately 22.8 million. As of December 31, 2020, and 2019, 22,592,500 and 4,826,565 common stock shares were issued and outstanding. Underwritten Registered Offering On January 21, 2020, the Company closed on a public offering consisting of 2,857,142 shares of common stock together with Warrants to purchase 1,428,571 shares of common stock. The gross proceeds to the Company from this offering were approximately $7,000,000, before deducting underwriting discounts, commissions, and other offering expenses. The Company has accounted for the warrants as liabilities and recorded them at fair value in our consolidated balance sheets (see Note 2). At-The-Market-Offering From January 1, 2020 to December 31, 2020 the Company sold approximately 13,175,677 shares of common stock under the Common Stock Sales Agreement, and the Amended and Restated Common Stock Sales Agreement, at an average price of approximately $8.69 per share, raising aggregate net proceeds of approximately $114.4 million, after deducting an aggregate commission up to 3%. Common Stock Warrants In connection with the November 26, 2018 public offering, the Company issued 657,142 common stock warrants each of which are exercisable for one share of common stock. The common stock warrants have an exercise price of $11.55 per share and expire five years from the issuance date. The warrants have been accounted for as equity instruments. In connection with the May 7, 2018 public offering, the Company issued 1,357,142 pre-funded warrants and 1,026,785 common stock warrants each of which are exercisable for one share of common stock. The pre-funded warrants had an exercise price of $0.07 per share and as of December 31, 2019 all pre-funded warrants have been exercised. The common stock warrants have an exercise price of $11.09 per share and expire five years from the issuance date. As of December 31, 2020, 497,094 common stock warrants have been exercised. The warrants have been accounted for as equity instruments. In connection with the March 23, 2016 public offering, the Company issued warrants to purchase 97,500 shares of common stock with an exercise price of $70.00 per share that expire five years from the issuance date. In connection with the Company’s July 23, 2013 initial public offering, the Company issued warrants to the underwriters for 1,785 shares of common stock issuable at $875.00 per share which expired July 22, 2018. On March 10, 2011, the Company issued warrants to purchase shares of common stock to third parties in consideration for a private equity placement transaction of which 248 warrants remain outstanding. The warrants have an exercise price of $33.60 per share and expire ten years from the issuance date. During the year ended December 31, 2020, 1,959,735 common stock warrants have been exercised and exchanged and no common stock warrants expired. No warrants were issued or exercised during the same period in 2019. The Company has a total of 758,939 warrants outstanding at a weighted average exercise price of $14.57 to purchase its common stock as of December 31, 2020. These warrants are summarized as follows: Issuance Date Number of Shares Exercise Price Expiration Date 3/10/2011 248 $ 33.60 3/10/2021 3/23/2016 42,308 $ 70.00 3/23/2021 5/7/2018 403,025 $ 11.09 5/8/2023 11/26/2018 313,358 $ 11.55 11/26/2023 The following table summarizes the warrant activity of the Company’s common stock warrants. There were no changes in the Company’s outstanding warrants during 2019: Common Stock Warrants Outstanding, December 31, 2019 1,290,103 Issued 1,428,571 Exercised (1,489,497) Exchanged (470,238) Outstanding, December 31, 2020 758,939 Equity Compensation Plans 2009 Stock Incentive Plan In 2009, the Company adopted the Heat Biologics, Inc. 2009 Stock Option Plan (the “2009 Plan”), under which stock options to acquire 21,739 common shares could be granted to key employees, directors, and independent contractors. Under the 2009 Plan, both incentive and non-qualified stock options could be granted under terms and conditions established by the Board of Directors. The exercise price for incentive stock options was the fair market value of the related common stock on the date the stock option was granted. Stock options granted under the 2009 Plan generally have terms of 10 years and have various vesting schedules. The Company amended the 2009 Stock Option Plan and all related addendum agreements in April 2011. This second amendment increased the number of shares available for issuance from 21,739 to 65,217. The Company amended the 2009 Plan to increase the number of shares available for issuance to 86,957. The 2009 Plan expired in September 2019, however all options outstanding at the time of expiration remained outstanding and exercisable by their term. As of December 31, 2020 and 2019, there were 6,378 and 6,752 stock options outstanding under the 2009 Plan, respectively. 2014 Stock Incentive Plan In June 2014, the stockholders approved the Heat Biologics, Inc. 2014 Stock Option Plan (the “2014 Plan”), under which the Company is authorized to grant 50,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2014 Plan. In 2015, the stockholders approved an amendment to the Plan to increase the number of shares by 60,000 and in 2016, the stockholders approved an amendment that allowed the Company to grant up to 300,000 awards in total. As of December 31, 2020 and 2019, there were 30,354 and 32,610 stock options outstanding under the 2014 Plan, respectively. 2017 Stock Incentive Plan In June 2017, the stockholders approved the Heat Biologics, Inc. 2017 Stock Incentive Plan (the “2017 Plan”), under which the Company is authorized to grant 500,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2017 Plan. As of December 31, 2020 and 2019 there were 42,932 and 49,340 stock options outstanding under the 2017 Plan, respectively. 2018 Stock Incentive Plan In October 2018, the stockholders approved the Heat Biologics, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), under which the Company is authorized to grant 4,000,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2018 Plan. At our 2019 Annual Meeting of Stockholders, the stockholders approved an amendment to the 2018 Plan to increase the number of shares by 4,000,000. As of December 31, 2020 and 2019 there were 1,400,475 and 532,752 stock options outstanding under the 2018 plan, respectively. There are 1,788,730 stock options remaining available for grant under the 2009 Plan, 2014 Plan, 2017 Plan and 2018 Plan (collectively, the “Plans”). The following table summarizes the components of the Company’s stock-based compensation included in net loss: For the years ended December 31, 2020 2019 Employee stock options $ 4,966,596 $ 1,349,089 Non-employee stock options 158,963 351,812 Employee stock awards 1,072,506 1,243,526 Non-employee stock awards 179,792 325,521 $ 6,377,857 $ 3,269,948 Accounting for Stock-Based Compensation: Stock Compensation Expense - For the years ended December 31, 2020, and 2019, we recorded $6,377,857, and $3,269,948 of stock-based compensation expense, respectively. No compensation expense of employees with stock awards was capitalized during the years ended December 31, 2020 and 2019. Stock Options - Under the Plans, we have issued stock options. A stock option granted gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. We typically issue options that vest over four years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plans, the contractual life of the option grants may not exceed ten years. During the years ended December 31, 2020, and 2019, we issued options that expire ten years from the date of grant. Fair Value Determination - We have used the Black-Scholes-Merton option pricing model to determine fair value of our stock option awards on the date of grant. We will reconsider the use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model. The following weighted-average assumptions were used for option grants during the years ended December 31, 2020 and 2019: · Volatility – The Company used an average historical stock price volatility of its own data plus an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms. · Expected life of options – The expected term represents the period that the Company’s stock option grants are expected to be outstanding. The Company elected to utilize the “simplified” method to estimate the expected term. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option. · Risk-free interest rate – The rate is based on U.S. Treasury interest rates at the time of the grant whose term is consistent with the expected life of the stock options. · Dividend yield – The expected dividend yield was considered to be 0% in the option pricing formula since the Company had not paid any dividends and had no plan to do so in the future. · Forfeitures – As required by ASC 718, the Company reviews recent forfeitures and stock compensation expense. We account for forfeitures as they occur. The following table summarizes assumptions used in our calculations of fair value for the years ended December 31, 2020 and 2019: 2020 2019 Dividend yield — % — % Expected volatility 83.13-101.68 % 89.59-91.03 % Risk-free interest rate 0.26-1.69 % 1.63-2.52 % Expected lives (years) 5.0-6.3 years 5.4-6.3 years Stock Option Activity - The weighted-average grant date fair value of options granted during the years ended December 31, 2020 and 2019, as determined under the Black-Scholes valuation model, was $5.92 and $5.27, respectively. The following table summarizes stock option activity for the years ended December 31, 2020 and 2019: Weighted Weighted Average Aggregate Average Exercise Intrinsic Remaining Shares Price Value Contractual Life Stock options outstanding at December 31, 2018 66,422 $ 81.15 $ — Granted 417,120 7.21 Exercised (285) 7.42 $ — Cancelled and expired (45,654) 12.33 Stock options outstanding at December 31, 2019 437,603 $ 17.90 $ 44,196 Granted 1,167,749 7.90 Exercised (7,140) 3.99 $ 9,813 Forfeited/Expired (118,073) 5.80 Stock options outstanding at December 31, 2020 1,480,139 $ 11.05 $ 403,744 Years Stock options exercisable at December 31, 2020 871,721 $ 14.74 $ 120,993 Years Unrecognized compensation expense related to unvested stock options was $2.4 million as of December 31, 2020, which is expected to be recognized over a weighted-average period of 1.75 years and will be adjusted for forfeitures as they occur. Restricted Stock - Under the Plans, the Company has issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses. Restricted stock issued to members of our Board of Directors and Executives vest 50% on grant date, 30% on the first anniversary and 10% each anniversary thereafter. The grant date fair value of the restricted stock is equal to the closing market price of the Company’s common stock on the date of grant. Restricted Stock Activity - The following table summarizes the restricted stock activity during the years ended December 31, 2020 and 2019: Weighted Average Shares Fair Value Restricted stock at December 31, 2018 — $ — Granted 354,165 5.97 Vested (168,272) 5.90 Cancelled (6,388) 7.42 Restricted stock at December 31, 2019 179,505 $ 5.99 Granted 339,999 3.22 Vested (275,115) 4.27 Cancelled (4,461) 7.42 Restricted stock at December 31, 2020 239,928 $ 4.02 RSUs - Under the Plans, the Company has time-based RSUs. RSUs are not actual shares, but rather a right to receive shares in the future. The shares are not issued and the employee cannot sell or transfer shares prior to vesting and has no voting rights until the RSUs vest. The employees' time-based RSUs will result in the delivery of shares in one-fourth increments commencing on the award date. The grant date fair value of the RSUs is equal to the closing market price of the Company’s common stock on the grant date. The Company recognizes the grant date fair value of RSUs of shares it expects to issue as compensation expense ratably over the requisite service period. The following table summarizes the RSU activity during the years ended December 31, 2020 and 2019: Weighted Average Shares Fair Value RSUs at December 31, 2018 8,073 $ 33.78 Vested (3,104) 37.37 Cancelled (678) 39.44 RSUs at December 31, 2019 4,291 $ 30.29 Vested (2,342) 33.15 Cancelled (49) 36.57 RSUs at December 31, 2020 1,900 $ 26.60 |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax | |
Income Tax | 1 2. Income Tax Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In accordance with FASB ASC 740, Accounting for Income Taxes, the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained by a taxing authority. As of December 31, 2020 and 2019, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of operations. As of December 31, 2020 and 2019, the Company had no such accruals. The components of income tax expense (benefit) attributable to continuing operations are as follows: 2020 2019 Current Expense: Federal $ — $ — State — — Foreign — — — — Deferred Expense: Federal $ — $ 45,178 State — — Foreign — — Total $ — $ 45,178 The differences between the company’s income tax expense attributable to continuing operations and the expense computed at the 21% United States statutory income tax rate were as follows: 2020 2019 Federal income tax expense at statutory rate: $ (5,540,000) $ (4,271,000) Increase (reduction) in income tax resulting from: State Income Taxes (433,000) (581,000) Foreign Rate Differential 5,000 (9,000) Nondeductible Expenses 210,000 15,000 Research & Development Credit (682,000) (772,000) Stock Based Compensation 113,000 132,000 Excess Executive Compensation 248,000 295,000 Payout of Contingent Consideration 421,000 — Goodwill Impairment — 155,000 Reserve for Loss Carryforwards Limited by Sec. 382 8,000 8,000 Other (41,000) 74,178 Increase in Valuation Allowance 5,691,000 4,999,000 $ — $ 45,178 The tax effects of temporary differences and operating loss carryforwards that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows at December 31, 2020 and December 31, 2019: 2020 2019 Deferred tax assets: Net Operating Losses $ 26,496,651 $ 22,278,013 R&D Credits 4,572,049 3,829,550 Stock Compensation 1,931,784 878,094 Contingent Consideration 668,994 854,129 Lease Liability (99,761) 9,950 Other Accrued Expenses — 20,797 Deferred tax assets 33,569,717 27,870,533 Deferred tax liabilities: Intangible Assets (1,347,399) (1,347,399) Property, plant and equipment, primarily due to differences in depreciation (69,882) (91,764) Other Accrued Expenses (29,781) — Deferred tax liabilities (1,447,062) (1,439,163) Valuation allowance (32,484,566) (26,793,281) Net deferred tax (liabilities) $ (361,911) $ (361,911) At December 31, 2020 and December 31, 2019, the Company evaluated all significant available positive and negative evidence, including the existence of losses in recent years and management’s forecast of future taxable income, and, as a result, determined it was more likely than not that federal and state deferred tax assets, including benefits related to net operating loss carryforwards, would not be realized. The valuation allowance was increased from $26,793,281 at December 31, 2019 to $32,484,566 at December 31, 2020. Net Operating Losses created in years beginning after 2017 now only offset 80% of Taxable Income but no longer have a 20 year expiration. As such, NOL’s created after 2017 can be used to offset indefinite lived liabilities up to 80%. At December 31, 2020, the Company has federal net operating loss carryforwards of approximately $118,799,856, including $3,027,284 acquired from Pelican Therapeutics, which are available to offset future taxable income. However, due to potential Section 382 limitations (discussed in further detail below) a reserve has been set up for the Pelican Therapeutics NOL of $(2,416,776). The federal net operating loss carryforwards begin to expire in 2029. The Company has various state net operating loss carryforwards totaling approximately $103,538,617 including $2,464,819 from Pelican Therapeutics, which are available to offset future state taxable income. State net operating losses begin to expire in 2024. The Company has various foreign net operating loss carryforwards of approximately $127,610. The foreign net operating loss carryforwards are carried forward indefinitely. Because the Company has incurred cumulative net operating losses since inception, all tax years remain open to examination by U.S. federal, state, and foreign income tax authorities. In accordance with FASB ASC 740, Accounting for Income Taxes, the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained by a taxing authority. As of December 31, 2020 and 2019, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying statements of income. As of December 31, 2020 and 2019, the Company had no such accruals The Company files income tax returns in the United States, various state and foreign jurisdictions. The Company is subject to examination by taxing authorities for the tax years ended December 31, 2009 through 2019. Potential 382 Limitation The Company’s ability to utilize its net operating loss (NOL) and research and development (R&D) credit carryforwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain stockholders or public groups. Due to the recent ownership changes, the Company is in the process of performing a study to determine whether a limitation of net operating losses and other attributes under IRC Sections 382 and 383 has occurred. The amount of NOL’s subject to this study are approximately $65 million. Since the study is still in-process, the deferred tax assets attributes subject to limitation are currently included in the consolidated financial statements, offset in full by a valuation allowance. When the section 382 study is complete, the limited deferred tax assets and related valuation allowances will be written off. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 13. Leases Effective January 1, 2019, the Company adopted ASC 842 using the optional transition method, applying no practical expedients. In accordance with the optional transition method, the Company did not recast the prior period consolidated financial statements. The lease term is the noncancelable period of the lease. There are no termination provisions or renewal periods reasonably certain of exercise or options controlled by the lessor. The Company has determined that its leases, consisting of leases for office and laboratory space without optional terms or variable components, are operating leases. Adoption of the new standard resulted in the recording of operating lease right-of-use assets and associated lease liabilities of $520,399 and $528,253, respectively, as of January 1, 2019 on the consolidated balance sheet with no cumulative impact to accumulated deficit and did not have a material impact on our results of operations or cash flows. The Company conducts its operations from leased facilities in Morrisville, North Carolina, San Antonio, Texas and New Brunswick, New Jersey, the leases for which will expire in 2027, 2023 and 2022. The leases are for general office space and lab space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs. On October 1, 2019, commencement date of our Morrisville, North Carolina lease, a right-of-use asset of $2.0 million and a liability of $1.4 million were recorded on our balance sheet. Total cash paid for operating leases during the year ended December 31, 2020 and 2019 was $0.3 million and $0.7 million and is included within cash flows from operating activities within the consolidated statement of cash flows. The Company leases furniture and specialized lab equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The effective interest rate was 6.17% for the years ended December 31, 2020 and 2019. The Company’s lease cost reflected in the accompanying Statements of Operations and Comprehensive loss as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Operating lease cost $ 435,024 $ 191,737 Finance lease cost Amortization of lease assets 114,201 5,210 Interest on lease liabilities 17,972 954 Total finance lease cost $ 132,173 $ 6,164 The weighted average remaining lease term and incremental borrowing rate as of December 31, 2020 and 2019 were as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Weighted average remaining lease term Operating leases years years Finance leases years years Weighted average discount rate Operating leases 6.49 % 6.58 % Finance leases 6.17 % 6.17 % Maturities of operating and finance lease liabilities as of December 31, 2020 were as follows: Operating Leases Finance Leases Total 2021 $ 369,995 $ 120,684 $ 490,679 2022 360,839 155,694 516,533 2023 244,973 10,284 255,257 2024 231,503 - 231,503 2025 238,452 - 238,452 Thereafter 454,820 - 454,820 Total minimum lease payments 1,900,582 286,662 2,187,244 Less: imputed interest (320,193) (18,295) (338,488) Present value of lease liabilities $ 1,580,389 $ 268,367 $ 1,848,756 Maturities of operating and finance lease liabilities as of December 31, 2019 were as follows: Operating Leases Finance Leases Total 2020 $ 321,273 $ 58,980 $ 380,253 2021 330,032 58,980 389,012 2022 338,960 93,990 432,950 2023 244,973 - 244,973 2024 231,503 - 231,503 Thereafter 693,272 - 693,272 Total minimum lease payments 2,160,013 211,950 2,371,963 Less: imputed interest (423,607) (20,179) (443,786) Present value of lease liabilities $ 1,736,406 $ 191,771 $ 1,928,177 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | 14. Related Party Transactions The Company compensates its board members. Board members received cash compensation between approximately $61,500 and $221,000, for services rendered during 2020 and 2019. Board members also received equity compensation. The Company owns 85% of the outstanding equity of Pelican, a related party as of the year ended December 31, 2020. See Note 4 about future milestone payments that may be paid to Participating Pelican Shareholders. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss Per Share | |
Net Loss Per Share | 15. Net Loss Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the periods. Fully diluted net loss per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options and warrants that are computed using the treasury stock method. For the years ended December 31, 2020 and 2019, all of the Company’s common stock options, unvested restricted stock units and warrants are anti-dilutive and therefore have been excluded from the diluted calculation. The following table reconciles net loss to net loss attributable to Heat Biologics, Inc.: For the Years Ended December 31, 2020 2019 Net loss $ (26,381,389) $ (20,384,716) Net loss - Non-controlling interest (331,652) (367,148) Net loss attributable to Heat Biologics, Inc. $ (26,049,737) $ (20,017,568) Weighted-average number of common shares used in net loss per share attributable to common stockholders —basic and diluted 15,982,568 4,754,542 Net loss per share attributable to Heat Biologics, Inc. —basic and diluted $ (1.63) $ (4.21) The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: 2020 2019 Outstanding stock options 1,480,139 437,603 Restricted stock subject to forfeiture and restricted stock units 241,828 183,796 Outstanding common stock warrants 758,939 1,290,103 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Event | |
Subsequent Events | 16. Subsequent Events Subsequent to the year ended December 31, 2020, through the date these consolidated financial statements were issued, the Company has issued an additional 2,106,027 shares of common stock in “at-the-market” offerings under the 2017 Shelf and received $25.6 million of net proceeds. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Heat Biologics, Inc. and its subsidiaries, Heat Biologics, Inc. (“the Company”), and its subsidiaries, Pelican Therapeutics, Inc. (“Pelican”), Heat Biologics I, Inc. (“Heat I”), Heat Biologics III, Inc. (“Heat III”), Heat Biologics IV, Inc. (“Heat IV”), Heat Biologics GmbH, Heat Biologics Australia Pty Ltd., Zolovax, Inc., Skunkworx Bio, Inc. (formerly known as Delphi Therapeutics, Inc.), and Scorpion Biosciences, Inc. As of December 31, 2020, there was no activity for Scorpion Biosciences, Inc. The functional currency of the entities located outside the United States of America (the foreign entities) is the applicable local currency of the foreign entities. Assets and liabilities of the foreign entities are translated at period-end exchange rates. Statement of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive loss, which is a component of accumulated other comprehensive loss in stockholders’ equity. All significant intercompany accounts and transactions have been eliminated in consolidation. The December 31, 2020 and 2019 year-end financials include 85% controlling interest in Pelican. Heat accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. GAAP. Accordingly, the Company presents non-controlling interest as a component of stockholders’ equity on its consolidated balance sheets and reports non-controlling interest net loss under the heading “net loss – non-controlling interest” in the consolidated statements of operations and comprehensive loss. |
Liquidity And Capital Resources [Policy Text Block] | Liquidity and Capital Resources The Company has an accumulated deficit of $130.6 million as of December 31, 2020 and a net loss of approximately $26.4 million for the year ended December 31, 2020 and has not generated significant revenue or positive cash flows from operations. The Company expects to incur significant expenses and continued losses from operations for the foreseeable future. The Company expects its expenses to increase in connection with its ongoing activities, particularly as the Company continues its research and development and advances its clinical trials of, and seeks marketing approval for, its product candidates. In addition, if the Company obtains marketing approval for any of its product candidates, the Company expects to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, the Company will need to obtain substantial additional funding in connection with its continuing operations. Adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or any future commercialization efforts. To meet its capital needs, the Company intends to continue to consider multiple alternatives, including, but not limited to, additional equity financings such as sales of its common stock under at-the-market offerings, if available, debt financings, partnerships, collaborations and other funding transactions. On April 23, 2020, the Company filed a shelf registration statement on Form S-3 (the "Registration Statement"). Pursuant to the Registration Statement, the Company may offer and sell securities having an aggregate public offering price of up to $150 million. In connection with the filing of the Registration Statement, the Company also entered into an amendment to its sales agreement (“Common Stock Sales Agreement”) with B. Riley FBR, as sales agent, pursuant to which the Company may issue and sell shares of its common stock under an at-the-market (the “ATM”) offering program. On August 24, 2020, the Company amended and restated the Common Stock Sales Agreement (the “Amended and Restated Common Stock Sales Agreement”) to include Cantor Fitzgerald & Co. (“Cantor”) as an additional sales agent for the ATM. Pursuant to the ATM, the Company will pay B. Riley FBR or Cantor (each a “Designated agent” and collectively, the “Agents”), a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock. As of December 31, 2020, the Company had approximately $111.8 million in cash and cash equivalents and short-term investments, which it believes is sufficient to fund its operations for at least one year from the date these consolidated financial statements were issued. This is based on the Company’s current estimates, and the Company could use its available capital resources sooner than it currently expects. The Company is continually evaluating various cost-saving measures considering its cash requirements in order to focus resources on its product candidates. The Company will need to generate significant revenues to achieve profitability, and it may never do so. |
Risk and Uncertainties | Risk and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s potential drug candidates, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses. With the global spread of the ongoing COVID-19 pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its business. The extent to which the COVID-19 pandemic impacts the Company’s business, the clinical development of the Company’s products, the business of the Company’s suppliers and other commercial partners, the Company’s corporate development objectives and the value of and market for the Company’s common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The Company’s in human phase 1 trial of HS-130 was subject to an approximate 8 week enrollment pause in April and May 2020 due to lack of personal protection equipment (“PPE”) at a clinical site. The site ceased all non-critical/non-essential patient procedures until PPE supplies were available. Enrollment resumed and no delays in overall development milestones are expected for HS-130. With the global spread of the ongoing novel coronavirus (“COVID-19”) pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its employees and business. While the Company is experiencing limited financial impacts at this time, given the global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces. On April 23, 2020, Heat and Pelican received loan proceeds of $0.7 million from Regions Bank, N.A, pursuant to the Paycheck Protection Program, or the PPP Loan, under the CARES Act, administered by the U.S. Small Business Administration. On April 28, 2020, we returned all $0.7 million in proceeds from the PPP Loan. The Company relies on third-party manufacturers to purchase from their third-party vendors the materials necessary to produce product candidates and manufacture product candidates for clinical studies. The Company also depends on third-party suppliers for key materials and services used in research and development, as well as manufacturing processes, and are subject to certain risks related to the loss of these third-party suppliers or their inability to supply adequate materials and services. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts and is dependent on these third parties for the production of its therapeutic candidates in accordance with relevant regulations (such as current Good Manufacturing Practices, or cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation. |
Use of Estimates | Use of Estimates The preparation of 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. Estimates are used for, but not limited to, useful lives of fixed assets, contingent consideration, valuation of goodwill and in process research and development (“IPR&D”), income taxes, valuation of warrant liabilities, and stock-based compensation. Actual results may differ from those estimates. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements and accompanying notes to the consolidated financial statements including the related party contingent consideration payable, which is now presented as a separate line item on the Company's consolidated balance sheets. |
Segments | Segments The Company has one reportable segment – the development of immunotherapies designed to activate and expand a patient’s T-cell mediated immune system against cancer. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all cash and other highly liquid investments with initial maturities from the date of purchase of three months or less to be cash and cash equivalents. |
Short-term Investments | Short-term Investments The Company’s short-term investments consist of equity securities and are carried at fair value. Unrealized gains and losses on securities are reported in the statement of operations. The Company classifies marketable equity investments available to fund current operations as current assets on its consolidated balance sheets. |
Derivative Financial Instruments | Derivative Financial Instruments The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of the warrants, which were deemed to be derivative instruments, was recorded as a derivative liability under the provisions of ASC Topic 815 Derivatives and Hedging (“ASC 815”) because they are not considered indexed to the Company’s own stock. Subsequently, the liability is adjusted to fair value as of the end of each reporting period and the changes in fair value of derivative liabilities are recorded in the consolidated statements of operations and comprehensive loss under the caption “Change in fair value of warrant liability.” The fair value of the warrants, including the warrants issued in connection with the January 2020 common stock offering and recorded as liability, was determined using the Monte Carlo simulation model, deemed to be an appropriate model due to the terms of the warrants issued. The fair value of warrants was affected by changes in inputs to the Monte Carlo simulation model including the Company’s stock price, expected stock price volatility, the remaining term, and the risk-free interest rate. At December 31, 2020, the fair value of such warrants was $33,779, which is classified as a long-term derivative warrant liability on the Company’s consolidated balance sheets. |
Concentration of Credit Risk | Concentration of Credit Risk At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has never experienced any losses related to these balances. As of December 31, 2020, and 2019, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2020 was $10,367,714. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are capitalized. Depreciation is calculated using the straight-line method and is based on estimated useful lives of five years for lab equipment, three years for computer equipment, eight years for furniture and fixtures and five years for leasehold improvements. |
Net Loss per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year. Fully diluted net loss per share is computed using the weighted average number of common shares and dilutive securities outstanding during each year. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other payables approximate fair value due to their short maturities. As a basis for determining the fair value of certain of the Company’s financial instruments, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level I – Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level II – Observable inputs, other than Level I prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level III – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The Company’s cash equivalents are classified within Level I of the fair value hierarchy. As of December 31, 2020, and December 31, 2019, the fair values of cash, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The Company’s short-term investments consist of Level I securities which are comprised of highly liquid money market funds. The estimated fair value of the short-term investments was based on quoted market prices. There were no transfers between fair value hierarchy levels during the years ended December 31, 2020 or 2019. In January 2020, the Company issued warrants in connection with the public offering of common stock (the “January 2020 Warrants”). Pursuant to the terms of these warrants, the warrants were not considered indexed to the Company’s own stock and therefore are required to be measured at fair value and reported as a liability in the consolidated balance sheets. Additionally, upon the closing of the January 2020 offering, 479,595 outstanding warrants were evaluated whether they were modified for accounting purpose and were determined that they were required to be classified as a liability. The fair value of the warrant liability is based on the Monte Carlo methodology. The Company is required to revalue the warrants at each reporting date with any changes in fair value recorded on our consolidated statement of operations and comprehensive loss. The valuation of the warrants is classified under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. In order to calculate the fair value of the warrants, certain assumptions were made, including the selling price or fair market value of the underlying common stock, risk-free interest rate, volatility, and remaining life. Changes to the assumptions could cause significant adjustments to valuation. The Company estimated a volatility factor utilizing its own data. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The Monte Carlo simulation was used to value the liability-classified warrants, including the warrants reclassified from equity to liability. The following weighted average assumptions were used: January 21, 2020 Current stock price $ 2.31 Estimated volatility of future stock price 124 % Risk free interest rate 1.53 % Expected term 3.7 years During the year ended December 31, 2020, 470,238 warrants were exchanged for 319,756 shares of common stock. As of December 31, 2020, there were a total of 9,357 warrants outstanding that were reported as a liability on the consolidated balance sheet. The fair value of financial instruments measured on a recurring basis is as follows: As of December 31, 2020 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 100,842,438 $ 100,842,438 — — Liabilities: Contingent consideration $ 2,912,515 — — $ 2,912,515 Warrant liability $ 33,779 — — $ 33,779 As of December 31, 2019 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,713,922 $ 5,713,922 — — Liabilities: Contingent consideration $ 3,718,515 — — $ 3,718,515 The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the year ended December 31, 2020: Contingent Warrant Consideration Liability Balance at December 31, 2019 $ 3,718,515 $ — Fair value at issuance — 2,494,823 Reclassification of warrants from equity to liability due to modification — 869,078 Reclassification of warrant liability to equity upon cashless exercise of warrants — (2,766,647) Reclassification of warrant liability to equity upon exchange of warrants — (1,575,642) Payout of contingent consideration (2,005,000) — Change in fair value 1,199,000 1,012,167 Balance at December 31, 2020 $ 2,912,515 $ 33,779 The change in the fair value of the contingent consideration of $1,199,000 and $613,290 for the years ended December 31, 2020 and 2019, respectively, was primarily due to the effect of the change in discount rate, probability of achieving milestones, and passage of time on the fair value measurement. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s consolidated statement of operations and comprehensive loss. The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements of contingent consideration classified as Level 3 as of December 31, 2020 and 2019: As of December 31, 2020 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2022-2030 Discount rate 7.66% Probability of occurrence 2.7% to 68% As of December 31, 2019 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2020-2030 Discount rate 7.83% Probability of occurrence 2.1% to 82% The following table presents quantitative information about the inputs used in the valuation for the Company’s fair value measurement of the warrant liability classified as Level 3 as of December 31, 2020: December 31, 2020 Current stock price $ 5.36 Estimated volatility of future stock price 141.28 % Risk free interest rate 0.17 % Contractual term 2.90 years The Company measures certain non-financial assets on a non-recurring basis, including goodwill and in-process R&D. As a result of those measurements, during the year ended December 31, 2019, goodwill with a total carrying value of $2.2 million was written down to its estimated fair value of $1.5 million and an impairment charge of $0.7 million was recorded. The Company uses a present value technique to estimate the fair value of these assets. This analysis requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. |
Income Tax | Income Tax Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In accordance with FASB ASC 740, Accounting for Income Taxes, the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained by a taxing authority. As of December 31, 2020 and 2019, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of operations. As of December 31, 2020 and 2019, the Company had no such accruals. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employee directors using a fair value method that requires the recognition of compensation expense for costs related to all stock-based payments, including stock options and restricted stock units. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. The fair value of restricted stock units is estimated based on the closing price of the Company’s stock on the date of grant, and for the purposes of expense recognition, the total new number of shares expected to vest is adjusted for estimated forfeitures. Stock-based compensation costs are based on the fair value of the underlying option calculated using the Black-Scholes-Merton option pricing model on the date of grant for stock options and are recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, forfeiture rates and expected term. The expected volatility rates are estimated based on average historical stock price volatility of its own data plus an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms. The expected term for the years ended December 31, 2020 and 2019 represents the average time that options are expected to be outstanding based on the average of the vesting term and the contractual term of the option. We account for forfeitures as they occur. The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. |
Net loss attributable to non-controlling interests | Net loss attributable to non-controlling interests Net loss attributable to non-controlling interests is the result of the Company’s consolidation of subsidiaries of which it does not own 100%. In October 2018, the Company entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in the Company’s subsidiaries, Heat I, Inc. and Pelican, a related party prior to acquisition, for 35,000 shares of the Company’s common stock. The stock exchange resulted in the Company owning 100% of Heat I, Inc. and increasing its controlling ownership in Pelican from 80% to 85%. The Company’s net loss attributable to non-controlling interests relates to the 15% ownership of Pelican that Heat does not own as of December 31, 2020 and 2019. |
Revenue Recognition | Revenue Recognition Effective January 1, 2019, the Company has adopted ASU No. 2018-08 Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The Company’s primary source of revenue is grant revenue related to the CPRIT contract, which is being accounted for under ASC 958 as a conditional non-exchange contribution. The CPRIT grant covers the periods from June 1, 2017 through May 31, 2021, for a total grant award of up to $15.2 million. CPRIT advances grant funds upon request by the Company consistent with the agreed upon amounts and schedules as provided in the contract. The first tranche of funding of $1.8 million was received in May 2017, and a second tranche of funding of $6.5 million was received in October 2017, and the third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be awarded, on a reimbursement basis, after we have fulfilled every requirement of the grant and the grant has been approved to be finalized. Funds received are reflected in deferred revenue as a liability until revenue is earned. Grant revenue is recognized when qualifying costs are incurred. As of December 31, 2020, the deferred revenue balance was $0.6 million with $13.1 million recognized as revenue since contract inception. On January 7, 2020, the Company was awarded a grant of up to $224,713 from the NIH. The NIH grant provides funding for continued development of the Company’s technologies for PTX-35. The grant funds will be made available by the NIH to the Company as allowable expenses are incurred. For the year ended December 31, 2020, the Company incurred approximately $0.1 million of allowable expenses under the NIH grant and recognized a corresponding amount of grant revenues. |
Business Combinations | Business Combinations We account for acquisitions using the acquisition method of accounting, which requires that all identifiable assets acquired and liabilities assumed be recorded at their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired patented technology. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed (see Note 4). |
Goodwill and In-Process Research and Development | Goodwill and In-Process Research and Development The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of definite-lived intangible assets after considering specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, and other economic facts; including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their estimated useful lives. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate a potential impairment exists, using a fair value-based test. Pursuant to ASU 2017-04, the Company must record a goodwill impairment charge if a reporting unit’s carrying value exceeds its fair value. See Note 7 regarding impairment at December 31, 2019. IPR&D, assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that the Company acquires, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. |
Deferred Revenue | Deferred Revenue Deferred revenue is comprised of proceeds of $0.6 million received from CPRIT for which the costs have not been incurred or the conditions of the award have not been met and grant funds received from an economic development grant agreement with the City of San Antonio (“Economic Development Grant”) that we entered into on November 1, 2017. Under the Economic Development Grant, we received $0.2 million in state enterprise fund grants for the purpose of defraying costs toward the purchase of laboratory equipment. As part of the agreement, we will provide the city of San Antonio with a purchase money security interest in the equipment to secure the repayment of grant funds should we fail to perform under the terms and conditions of the agreement. Our obligations under the agreement include meeting certain employment levels for a period of not less than seven years commencing on or before December 31, 2017 and establishing Pelican’s corporate headquarters in San Antonio. The Economic Development Grant funds will be recognized as income upon the achievement of the performance criteria and determination that the cash is no longer refundable to the State of Texas. |
Contingent Consideration | Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations and comprehensive loss. The Company estimates the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. The milestone payments will be made upon the achievement of clinical and commercialization milestones as well as single low digit royalty payments and payments upon receipt of sublicensing income. Subsequent to the date of acquisition, the Company reassess the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets (see Note 4). |
Research and Development | Research and Development Research and development costs associated with developmental products not yet approved by the FDA as well as costs associated with bringing developmental products into advanced phase clinical trials are expensed as incurred. These costs consist primarily of pre-manufacturing and manufacturing drug costs, clinical trial execution, investigator payments, license fees, salaries, stock-based compensation and related personnel costs. Other costs include fees paid to consultants and outside service providers related to the development of the Company’s product candidates and other expenses relating to the design, development, and testing and enhancement of its product candidates. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2022 and the Company is currently evaluating the expected impact of this standard but does not expect it to have a material impact on its consolidated financial statements upon adoption. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes, and also improves consistency of application by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the expected impact of this standard but does not expect it to have a material impact on its consolidated financial statements upon adoption. In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force), which addresses the accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the expected impact of this standard but does not expect it to have a material impact on its consolidated financial statements upon adoption. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for convertible instruments. This ASU also requires entities to use the if-converted method for all convertible instruments in calculating diluted earnings-per-share. The ASU is effective for annual periods beginning after December 15, 2021 with early adoption permitted. We are currently evaluating the impact this standard will have on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of fair value of financial instruments measured on a recurring basis | As of December 31, 2020 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 100,842,438 $ 100,842,438 — — Liabilities: Contingent consideration $ 2,912,515 — — $ 2,912,515 Warrant liability $ 33,779 — — $ 33,779 As of December 31, 2019 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,713,922 $ 5,713,922 — — Liabilities: Contingent consideration $ 3,718,515 — — $ 3,718,515 |
Schedule of change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs | Contingent Warrant Consideration Liability Balance at December 31, 2019 $ 3,718,515 $ — Fair value at issuance — 2,494,823 Reclassification of warrants from equity to liability due to modification — 869,078 Reclassification of warrant liability to equity upon cashless exercise of warrants — (2,766,647) Reclassification of warrant liability to equity upon exchange of warrants — (1,575,642) Payout of contingent consideration (2,005,000) — Change in fair value 1,199,000 1,012,167 Balance at December 31, 2020 $ 2,912,515 $ 33,779 |
Contingent Consideration Classified As Level 3 | |
Summary of Significant Accounting Policies | |
Schedule of fair value inputs | As of December 31, 2020 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2022-2030 Discount rate 7.66% Probability of occurrence 2.7% to 68% As of December 31, 2019 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2020-2030 Discount rate 7.83% Probability of occurrence 2.1% to 82% |
Liability-Classified Warrants | |
Summary of Significant Accounting Policies | |
Schedule of fair value inputs | January 21, 2020 Current stock price $ 2.31 Estimated volatility of future stock price 124 % Risk free interest rate 1.53 % Expected term 3.7 years |
Warrant Liability Classified As Level 3 | |
Summary of Significant Accounting Policies | |
Schedule of fair value inputs | December 31, 2020 Current stock price $ 5.36 Estimated volatility of future stock price 141.28 % Risk free interest rate 0.17 % Contractual term 2.90 years |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expenses And Other Current Assets. | |
Schedule of prepaid expenses and other current assets | December 31, December 31, 2020 2019 Prepaid manufacturing expense $ 316,411 $ 148,156 Prepaid insurance 612,293 120,851 Prepaid preclinical and clinical expenses 690,543 22,319 Other prepaid expenses and current assets 223,373 109,843 Other current assets — 19,159 $ 1,842,620 $ 420,328 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Schedule of property and equipment | December 31, December 31, 2020 2019 Lab equipment $ 1,607,238 $ 1,311,853 Computers 71,058 53,065 Furniture and fixtures 64,523 50,453 Leasehold improvements 22,563 14,259 Total 1,765,382 1,429,630 Accumulated depreciation (1,089,120) (870,220) Property and equipment, net $ 676,262 $ 559,410 |
Goodwill and In-process R&D (Ta
Goodwill and In-process R&D (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and In-process R&D | |
Schedule of goodwill and in-process R&D | The following table provides the Company’s goodwill as of December 31, 2020. There was no goodwill impairment during the year ended December 31, 2020. Goodwill Balance at December 31, 2020 $ 1,452,338 The following table provides the Company’s in-process R&D as of December 31, 2020. There was no change in in-process R&D during the years ended December 31, 2020 and 2019. In-process R&D In-process R&D from acquisition of Pelican $ 5,866,000 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued expenses | |
Schedule of accrued expenses | December 31, December 31, 2020 2019 Accrued preclinical and clinical trial expenses $ 628,000 $ 1,156,618 Accrued manufacturing expenses 175,089 — Compensation and related benefits 209,600 303,870 Accrued franchise tax 172,500 — Other expenses 429,345 215,979 $ 1,614,534 $ 1,676,467 |
License Agreements (Tables)
License Agreements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
License Agreements | |
Schedule of future minimum royalty payments | Future minimum royalty payments by the Company for licenses as of December 31, 2020 are as follows (in thousands): Year ended December 31, 2021 $ 228 2022 784 2023 74 Total $ 1,086 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders’ Equity | |
Schedule of common stock warrants by exercise price range | Issuance Date Number of Shares Exercise Price Expiration Date 3/10/2011 248 $ 33.60 3/10/2021 3/23/2016 42,308 $ 70.00 3/23/2021 5/7/2018 403,025 $ 11.09 5/8/2023 11/26/2018 313,358 $ 11.55 11/26/2023 |
Schedule of common stock warrants outstanding | Common Stock Warrants Outstanding, December 31, 2019 1,290,103 Issued 1,428,571 Exercised (1,489,497) Exchanged (470,238) Outstanding, December 31, 2020 758,939 |
Schedule of components of stock-based compensation included in net loss | For the years ended December 31, 2020 2019 Employee stock options $ 4,966,596 $ 1,349,089 Non-employee stock options 158,963 351,812 Employee stock awards 1,072,506 1,243,526 Non-employee stock awards 179,792 325,521 $ 6,377,857 $ 3,269,948 |
Schedule of stock option valuation assumptions | 2020 2019 Dividend yield — % — % Expected volatility 83.13-101.68 % 89.59-91.03 % Risk-free interest rate 0.26-1.69 % 1.63-2.52 % Expected lives (years) 5.0-6.3 years 5.4-6.3 years |
Schedule of stock option activity | Weighted Weighted Average Aggregate Average Exercise Intrinsic Remaining Shares Price Value Contractual Life Stock options outstanding at December 31, 2018 66,422 $ 81.15 $ — Granted 417,120 7.21 Exercised (285) 7.42 $ — Cancelled and expired (45,654) 12.33 Stock options outstanding at December 31, 2019 437,603 $ 17.90 $ 44,196 Granted 1,167,749 7.90 Exercised (7,140) 3.99 $ 9,813 Forfeited/Expired (118,073) 5.80 Stock options outstanding at December 31, 2020 1,480,139 $ 11.05 $ 403,744 Years Stock options exercisable at December 31, 2020 871,721 $ 14.74 $ 120,993 Years |
Schedule of restricted stock activity | Weighted Average Shares Fair Value Restricted stock at December 31, 2018 — $ — Granted 354,165 5.97 Vested (168,272) 5.90 Cancelled (6,388) 7.42 Restricted stock at December 31, 2019 179,505 $ 5.99 Granted 339,999 3.22 Vested (275,115) 4.27 Cancelled (4,461) 7.42 Restricted stock at December 31, 2020 239,928 $ 4.02 |
Schedule of RSU activity | Weighted Average Shares Fair Value RSUs at December 31, 2018 8,073 $ 33.78 Vested (3,104) 37.37 Cancelled (678) 39.44 RSUs at December 31, 2019 4,291 $ 30.29 Vested (2,342) 33.15 Cancelled (49) 36.57 RSUs at December 31, 2020 1,900 $ 26.60 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax | |
Schedule of components of income tax expense (benefit) attributable to continuing operations | 2020 2019 Current Expense: Federal $ — $ — State — — Foreign — — — — Deferred Expense: Federal $ — $ 45,178 State — — Foreign — — Total $ — $ 45,178 |
Schedule of income tax rate reconciliation | 2020 2019 Federal income tax expense at statutory rate: $ (5,540,000) $ (4,271,000) Increase (reduction) in income tax resulting from: State Income Taxes (433,000) (581,000) Foreign Rate Differential 5,000 (9,000) Nondeductible Expenses 210,000 15,000 Research & Development Credit (682,000) (772,000) Stock Based Compensation 113,000 132,000 Excess Executive Compensation 248,000 295,000 Payout of Contingent Consideration 421,000 — Goodwill Impairment — 155,000 Reserve for Loss Carryforwards Limited by Sec. 382 8,000 8,000 Other (41,000) 74,178 Increase in Valuation Allowance 5,691,000 4,999,000 $ — $ 45,178 |
Schedule of deferred tax assets and liabilities | 2020 2019 Deferred tax assets: Net Operating Losses $ 26,496,651 $ 22,278,013 R&D Credits 4,572,049 3,829,550 Stock Compensation 1,931,784 878,094 Contingent Consideration 668,994 854,129 Lease Liability (99,761) 9,950 Other Accrued Expenses — 20,797 Deferred tax assets 33,569,717 27,870,533 Deferred tax liabilities: Intangible Assets (1,347,399) (1,347,399) Property, plant and equipment, primarily due to differences in depreciation (69,882) (91,764) Other Accrued Expenses (29,781) — Deferred tax liabilities (1,447,062) (1,439,163) Valuation allowance (32,484,566) (26,793,281) Net deferred tax (liabilities) $ (361,911) $ (361,911) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of lease cost | For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Operating lease cost $ 435,024 $ 191,737 Finance lease cost Amortization of lease assets 114,201 5,210 Interest on lease liabilities 17,972 954 Total finance lease cost $ 132,173 $ 6,164 |
Schedule of weighted average remaining lease term and incremental borrowing rate | For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Weighted average remaining lease term Operating leases years years Finance leases years years Weighted average discount rate Operating leases 6.49 % 6.58 % Finance leases 6.17 % 6.17 % |
Schedule of maturities of operating and finance lease liabilities | Maturities of operating and finance lease liabilities as of December 31, 2020 were as follows: Operating Leases Finance Leases Total 2021 $ 369,995 $ 120,684 $ 490,679 2022 360,839 155,694 516,533 2023 244,973 10,284 255,257 2024 231,503 - 231,503 2025 238,452 - 238,452 Thereafter 454,820 - 454,820 Total minimum lease payments 1,900,582 286,662 2,187,244 Less: imputed interest (320,193) (18,295) (338,488) Present value of lease liabilities $ 1,580,389 $ 268,367 $ 1,848,756 Maturities of operating and finance lease liabilities as of December 31, 2019 were as follows: Operating Leases Finance Leases Total 2020 $ 321,273 $ 58,980 $ 380,253 2021 330,032 58,980 389,012 2022 338,960 93,990 432,950 2023 244,973 - 244,973 2024 231,503 - 231,503 Thereafter 693,272 - 693,272 Total minimum lease payments 2,160,013 211,950 2,371,963 Less: imputed interest (423,607) (20,179) (443,786) Present value of lease liabilities $ 1,736,406 $ 191,771 $ 1,928,177 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss Per Share | |
Schedule of reconciliation of net loss | For the Years Ended December 31, 2020 2019 Net loss $ (26,381,389) $ (20,384,716) Net loss - Non-controlling interest (331,652) (367,148) Net loss attributable to Heat Biologics, Inc. $ (26,049,737) $ (20,017,568) Weighted-average number of common shares used in net loss per share attributable to common stockholders —basic and diluted 15,982,568 4,754,542 Net loss per share attributable to Heat Biologics, Inc. —basic and diluted $ (1.63) $ (4.21) |
Schedule of potentially dilutive securities | 2020 2019 Outstanding stock options 1,480,139 437,603 Restricted stock subject to forfeiture and restricted stock units 241,828 183,796 Outstanding common stock warrants 758,939 1,290,103 |
Organization (Details)
Organization (Details) | Dec. 11, 2020 |
Organization | |
Reverse stock split conversion ratio | 0.1429 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | Apr. 28, 2020USD ($) | Apr. 23, 2020USD ($) | Jan. 07, 2020USD ($) | Nov. 01, 2017USD ($) | Jan. 31, 2020shares | Dec. 31, 2019USD ($) | Oct. 31, 2018shares | Oct. 31, 2017USD ($) | May 31, 2017USD ($) | May 31, 2016USD ($) | Dec. 31, 2020USD ($)segmentshares | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)shares | Sep. 30, 2018 | Dec. 31, 2017 |
Accumulated deficit | $ (104,597,748) | $ (130,647,485) | $ (104,597,748) | $ (130,647,485) | |||||||||||
Net loss | (26,381,389) | (20,384,716) | |||||||||||||
Cash, cash equivalents and short term investments | 111,800,000 | 111,800,000 | |||||||||||||
Proceeds from PPP loan | 702,000 | ||||||||||||||
Repayment of PPP loan | $ 702,000 | ||||||||||||||
Number of reportable segments | segment | 1 | ||||||||||||||
Derivative warrant liability | $ 33,779 | 33,779 | |||||||||||||
Cash balance insured | 250,000 | 250,000 | 250,000 | 250,000 | |||||||||||
Cash balance uninsured | $ 10,367,714 | $ 10,367,714 | |||||||||||||
Common stock issued in exchange for warrants (in shares) | shares | 319,756 | ||||||||||||||
Warrants outstanding | shares | 9,357 | 9,357 | |||||||||||||
Fair value of the contingent consideration | $ 1,199,000 | 613,290 | |||||||||||||
Goodwill gross | 2,200,000 | 2,200,000 | |||||||||||||
Goodwill fair value | 1,500,000 | 1,500,000 | |||||||||||||
Goodwill impairment loss | 0 | 737,000 | |||||||||||||
Unrecognized tax benefit | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||
Percentage of non-controlling interest acquired | 15.00% | 15.00% | 15.00% | 15.00% | |||||||||||
Revenue | $ 2,947,969 | $ 3,049,104 | |||||||||||||
Allowable expenses incurred under NIH grant | $ 100,000 | ||||||||||||||
Maximum | |||||||||||||||
Aggregate public offering price | $ 150,000,000 | ||||||||||||||
Amount awarded from NIH grant | $ 224,713 | ||||||||||||||
Lab equipment | |||||||||||||||
Useful life | P5Y | ||||||||||||||
Computers | |||||||||||||||
Useful life | P3Y | ||||||||||||||
Furniture and fixtures | |||||||||||||||
Useful life | P8Y | ||||||||||||||
Leasehold Improvements | |||||||||||||||
Useful life | five | ||||||||||||||
Common stock warrants | |||||||||||||||
Number of warrants reclassified to liability | shares | 479,595 | ||||||||||||||
Warrants exchanged | shares | 470,238 | ||||||||||||||
At The Market Offerings | Maximum | |||||||||||||||
Percentage of commission fees to sales agent | 3.00% | ||||||||||||||
Heat I | |||||||||||||||
Ownership interest in subsidiary | 100.00% | ||||||||||||||
Pelican Therapeutics, Inc. | |||||||||||||||
Ownership interest in subsidiary | 85.00% | 80.00% | |||||||||||||
CPRIT | |||||||||||||||
Grant receivable | $ 200,000 | ||||||||||||||
Deferred revenue | $ 600,000 | $ 600,000 | $ 600,000 | ||||||||||||
CPRIT | Minimum | |||||||||||||||
Period of maintenance of employment levels | 7 years | ||||||||||||||
CPRIT | Grant revenue | |||||||||||||||
Grant receivable | 1,500,000 | 1,500,000 | |||||||||||||
Heat I, Inc. and Pelican | |||||||||||||||
Proceeds from PPP loan | $ 700,000 | ||||||||||||||
Repayment of PPP loan | $ 700,000 | ||||||||||||||
Shares issued in acquisition | shares | 35,000 | ||||||||||||||
Pelican Therapeutics, Inc. | |||||||||||||||
Percentage of non-controlling interest acquired | 20.00% | ||||||||||||||
Amount awarded from CPRIT grant | $ 15,200,000 | ||||||||||||||
Contract value | 13,100,000 | ||||||||||||||
Pelican Therapeutics, Inc. | Grant revenue | |||||||||||||||
Revenue | 13,100,000 | ||||||||||||||
Grant receivable | $ 1,500,000 | $ 1,500,000 | |||||||||||||
Pelican Therapeutics, Inc. | First tranche | Grant revenue | |||||||||||||||
Revenue | $ 1,800,000 | ||||||||||||||
Pelican Therapeutics, Inc. | Second tranche | Grant revenue | |||||||||||||||
Revenue | $ 6,500,000 | ||||||||||||||
Pelican Therapeutics, Inc. | Third tranche | Grant revenue | |||||||||||||||
Revenue | $ 5,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Warrant Weighted Average Assumptions (Details) | Dec. 31, 2020$ / shares | Jan. 21, 2020$ / shares |
Liability-Classified Warrants | Current stock price | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 2.31 | |
Liability-Classified Warrants | Estimated volatility of future stock price | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 124 | |
Liability-Classified Warrants | Risk free interest rate | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 1.53 | |
Liability-Classified Warrants | Expected term | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 3.7 | |
Warrant Liability Classified As Level 3 | Current stock price | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 5.36 | |
Warrant Liability Classified As Level 3 | Estimated volatility of future stock price | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 141.28 | |
Warrant Liability Classified As Level 3 | Risk free interest rate | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 0.17 | |
Warrant Liability Classified As Level 3 | Expected term | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 2.90 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Fair Value of Financial Instruments Measurements (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Short-term investments | $ 100,842,438 | $ 5,713,922 |
Liabilities: | ||
Contingent consideration | 2,912,515 | 3,718,515 |
Warrant liability | 33,779 | |
Level 1 | ||
Assets | ||
Short-term investments | 100,842,438 | 5,713,922 |
Level 3 | ||
Liabilities: | ||
Contingent consideration | 2,912,515 | $ 3,718,515 |
Warrant liability | $ 33,779 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contingent Consideration | ||
Beginning Balance | $ 3,718,515 | |
Payout of contingent consideration | (2,005,000) | |
Change in fair value of contingent consideration | 1,199,000 | $ 613,290 |
Ending Balance | 2,912,515 | $ 3,718,515 |
Warrant Liability | ||
Fair value at issuance | 2,494,823 | |
Reclassification of warrants from equity to liability due to modification | 869,078 | |
Reclassification of warrant liability to equity upon exercise of warrants | (2,766,647) | |
Reclassification of warrant liability to equity upon exchange of warrants | (1,575,642) | |
Change in fair value | 1,012,167 | |
Ending Balance | $ 33,779 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Fair Value Measurements of Contingent Consideration (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Valuation Methodology | Probability weighted income approach | Probability weighted income approach |
Significant unobservable input - milestone dates | 2022-2030 | 2020-2030 |
Discount rate | 7.66% | 7.83% |
Probability of occurrence - minimum | 2.70% | 2.10% |
Probability of occurrence - maximum | 68.00% | 82.00% |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Mutual funds | ||
Estimated fair value | $ 100.8 | $ 5.7 |
Acquisition of Pelican Therap_2
Acquisition of Pelican Therapeutics - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
May 31, 2016USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017director | |
Acquisition of Pelican Therapeutics | |||||||
Discount rate | 7.66% | 7.83% | |||||
Accrued liabilities | $ 1,614,534 | $ 1,676,467 | |||||
Other income | $ 255,189 | $ (25,557) | |||||
Percentage of non-controlling interest acquired | 15.00% | 15.00% | |||||
Revenue | $ 2,947,969 | $ 3,049,104 | |||||
Net loss attributable to Heat Biologics, Inc. | (26,049,737) | (20,017,568) | |||||
Net loss | $ 26,381,389 | $ 20,384,716 | |||||
Pelican Therapeutics, Inc. | |||||||
Acquisition of Pelican Therapeutics | |||||||
Ownership interest in subsidiary | 85.00% | 80.00% | |||||
Pelican Therapeutics, Inc. | |||||||
Acquisition of Pelican Therapeutics | |||||||
Percentage of voting interests acquired in acquisition | 80.00% | ||||||
Other income | $ 200,000 | ||||||
Percentage of non-controlling interest acquired | 20.00% | ||||||
Amount awarded from CPRIT grant | $ 15,200,000 | ||||||
Pelican Therapeutics, Inc. | Stockholders | |||||||
Acquisition of Pelican Therapeutics | |||||||
Cash consideration distributed | $ 300,000 | ||||||
Pelican Therapeutics, Inc. | CEO, Two Directors and Affiliated Companies | |||||||
Acquisition of Pelican Therapeutics | |||||||
Number of directors | director | 2 | ||||||
Percentage of milestone payments that will be paid to related parties | 22.70% |
Acquisition of Pelican Therap_3
Acquisition of Pelican Therapeutics - Future Milestone Payments (Details) - University of Miami - USD ($) $ in Millions | Jun. 22, 2020 | Dec. 31, 2020 |
Payment under first milestone achieved | $ 2 | |
Pelican Therapeutics, Inc. | ||
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 2 trial for an oncology indication | $ 1.5 | |
Future milestone payment upon successful outcome of the first Phase 2 trial for an oncology indication | 3 | |
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 3 trial for an oncology indication | 6 | |
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 3 trial for a non- oncology indication | 3 | |
Future milestone payment upon successful outcome of the first Phase 3 trial for an oncology indication | 7.5 | |
Future milestone payment upon successful outcome of the first Phase 3 trial for a non-oncology indication | 3 | |
Future milestone payment upon acceptance of a Biologics License Application (BLA) submission for an oncology indication | 7.5 | |
Future milestone payment upon acceptance of a BLA submission for a non-oncology indication | 3 | |
Future milestone payment upon first product indication approval in the United States or Europe for an oncology indication | 7.5 | |
Future milestone payment upon first product indication approval in the United States or Europe for a non- oncology indication | $ 3 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expenses And Other Current Assets | ||
Prepaid manufacturing expense | $ 316,411 | $ 148,156 |
Prepaid insurance | 612,293 | 120,851 |
Prepaid preclinical and clinical expenses | 690,543 | 22,319 |
Other prepaid expenses and current assets | 223,373 | 109,843 |
Other current assets | 19,159 | |
Prepaid expenses and other current assets | $ 1,842,620 | $ 420,328 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment | ||
Total | $ 1,765,382 | $ 1,429,630 |
Accumulated depreciation | (1,089,120) | (870,220) |
Property and equipment, net | 676,262 | 559,410 |
Depreciation expense | $ 218,951 | 227,296 |
Minimum | ||
Property and Equipment | ||
Estimated useful lives | 5 years | |
Maximum | ||
Property and Equipment | ||
Estimated useful lives | 7 years | |
Lab equipment | ||
Property and Equipment | ||
Total | $ 1,607,238 | 1,311,853 |
Computers | ||
Property and Equipment | ||
Total | 64,523 | 50,453 |
Furniture and fixtures | ||
Property and Equipment | ||
Total | 22,563 | 14,259 |
Leasehold Improvements | ||
Property and Equipment | ||
Total | $ 71,058 | $ 53,065 |
Goodwill and In-process R&D (De
Goodwill and In-process R&D (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Goodwill and In-Process R&D | |||
Balance of finite-lived intangible assets | $ 5,866,000 | $ 5,866,000 | |
Goodwill and intangible asset impairment | 0 | ||
Goodwill | 1,452,338 | 1,452,338 | |
Goodwill gross | 2,200,000 | ||
Goodwill fair value | 1,500,000 | ||
Goodwill impairment loss | 0 | 737,000 | |
In-process R&D | |||
Goodwill and In-Process R&D | |||
Change in finite-lived intangible assets | $ 0 | $ 0 | |
Pelican Therapeutics, Inc. | |||
Goodwill and In-Process R&D | |||
Goodwill acquired | $ 2,200,000 | ||
Pelican Therapeutics, Inc. | In-process R&D | |||
Goodwill and In-Process R&D | |||
Finite-lived intangible assets acquired | $ 5,866,000 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued expenses | ||
Accrued clinical trial expenses | $ 628,000 | $ 1,156,618 |
Accrued manufacturing expenses | 175,089 | |
Compensation and related benefits | 209,600 | 303,870 |
Accrued franchise tax | 172,500 | |
Other expenses | 429,345 | 215,979 |
Accrued expenses | $ 1,614,534 | $ 1,676,467 |
License Agreements - Narrative
License Agreements - Narrative (Details) | Dec. 31, 2020USD ($) | Sep. 08, 2020 | Oct. 25, 2016USD ($) | Apr. 12, 2011USD ($) | Feb. 18, 2011USD ($) | Dec. 10, 2010USD ($) | Jun. 30, 2016USD ($) | Jul. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2008 | Dec. 07, 2020itemagreement | Jul. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 12, 2010USD ($) | Sep. 08, 2010USD ($) |
University of Miami | ||||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | |||||||||||||||||
Time period of minimum royalty payments | 3 years | |||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | $ 20,000 | |||||||||||||||||
Milestone payment | $ 500,000 | |||||||||||||||||
Milestone payment upon annual net sales of $100,000,000 or more | $ 250,000 | |||||||||||||||||
Maintenance fee | $ 82,000 | |||||||||||||||||
Number of license agreements | agreement | 3 | |||||||||||||||||
Threshold number of major markets | item | 1 | |||||||||||||||||
Number of major markets | item | 3 | |||||||||||||||||
Period of payment of nominal maintenance fee | 10 years | |||||||||||||||||
Upfront fee | $ 20,000 | |||||||||||||||||
University of Miami | License agreement ("SS114A") | ||||||||||||||||||
Reimbursement of for past patent fees | $ 37,381 | |||||||||||||||||
University of Miami | License I176 | ||||||||||||||||||
Threshold number of major markets | item | 1 | |||||||||||||||||
Number of major markets | item | 3 | |||||||||||||||||
Not-for-profit corporation | ||||||||||||||||||
Milestone payment | $ 1,000 | |||||||||||||||||
License costs | $ 50,000 | |||||||||||||||||
Maintenance fee | $ 5,000 | |||||||||||||||||
University of Michigan | ||||||||||||||||||
Option fees | $ 2,000 | |||||||||||||||||
Term of option agreement | 9 months | |||||||||||||||||
Payment for exercise of license option | $ 10,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | License I176 | ||||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | 20,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | University of Miami | ||||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | |||||||||||||||||
Time period of minimum royalty payments | 3 years | |||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | 20,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | University of Miami | License 0331, 0539 | ||||||||||||||||||
Milestone payments due upon submission | 150,000 | |||||||||||||||||
Milestone payments completion of phase 1 clinical trial | $ 250,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | University of Miami | License I176 | ||||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||||
License costs | $ 50,000 | |||||||||||||||||
Reimbursement of for past patent fees | $ 15,797 | |||||||||||||||||
Milestone payments due upon submission | $ 150,000 | |||||||||||||||||
Milestone payments completion of phase 1 clinical trial | $ 500,000 | |||||||||||||||||
Heat I | ||||||||||||||||||
Percentage of issued and outstanding stock owned | 7.50% | |||||||||||||||||
Shattuck | ||||||||||||||||||
License costs | $ 50,000 | |||||||||||||||||
Zolovax | University of Miami | ||||||||||||||||||
License time period from date of first sale of a Licensed Product | 15 years | |||||||||||||||||
Upfront fee | $ 2,500 |
License Agreements - Future Min
License Agreements - Future Minimum Royalty Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
License Agreements | |
2021 | $ 228 |
2022 | 784 |
2023 | 74 |
Total | $ 1,086 |
Grant Revenue (Details)
Grant Revenue (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 55 Months Ended | ||||
Dec. 31, 2019 | Oct. 31, 2017 | May 31, 2017 | Jun. 30, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |
Grant Revenue | |||||||
Revenue | $ 2,947,969 | $ 3,049,104 | |||||
Pelican Therapeutics, Inc. | |||||||
Grant Revenue | |||||||
Contribution to be made by Pelican | 7,600,000 | $ 7,600,000 | |||||
Pelican Therapeutics, Inc. | Maximum | |||||||
Grant Revenue | |||||||
Amount of grant under Grant Contract with CIPRIT | $ 15,200,000 | ||||||
Pelican Therapeutics, Inc. | Tranche 1 | |||||||
Grant Revenue | |||||||
Revenue | $ 1,800,000 | ||||||
Pelican Therapeutics, Inc. | Tranche 2 | |||||||
Grant Revenue | |||||||
Revenue | $ 6,500,000 | ||||||
Pelican Therapeutics, Inc. | Tranche 3 | |||||||
Grant Revenue | |||||||
Revenue | $ 5,400,000 | ||||||
Pelican Therapeutics, Inc. | Grant revenue | |||||||
Grant Revenue | |||||||
Revenue | 13,100,000 | ||||||
Grant receivable | $ 1,500,000 | $ 1,500,000 | |||||
Percentage of contribution | 0.50% | ||||||
Pelican Therapeutics, Inc. | Grant revenue | Maximum | |||||||
Grant Revenue | |||||||
Royalty percentage after threshold is met | 1.00% |
Stockholders' Equity - Authoriz
Stockholders' Equity - Authorized Capital (Details) | Dec. 11, 2020shares | Dec. 31, 2020$ / sharesshares | Dec. 10, 2020shares | Mar. 20, 2020shares | Dec. 31, 2019$ / sharesshares |
Stockholders’ Equity | |||||
Preferred Stock, par value per share | $ / shares | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0002 | $ 0.0002 | |||
Common Stock, Shares Authorized | 250,000,000 | 250,000,000 | 100,000,000 | ||
Common Stock, Shares, Issued | 22,800,000 | 22,592,500 | 159,800,000 | 4,826,565 | |
Common Stock, Shares, Outstanding | 22,800,000 | 22,592,500 | 159,800,000 | 4,826,565 | |
Reverse stock split conversion ratio | 0.1429 |
Stockholders' Equity - Underwri
Stockholders' Equity - Underwritten Registered and ATM Offerings (Details) - USD ($) | Jan. 21, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Proceeds from the issuance of common stock | $ 117,373,495 | $ 18,898 | |
January 2020 Offering | |||
Issuance of common stock (in shares) | 2,857,142 | ||
Warrants to purchase common stock | 1,428,571 | ||
Proceeds from offering | $ 7,000,000 | ||
At The Market Offering | |||
Issuance of common stock (in shares) | 13,175,677 | ||
Average price of common stock | $ 8.69 | ||
Proceeds from the issuance of common stock | $ 114,400,000 | ||
At The Market Offering | Maximum | |||
Percentage of commission for common stock sold | 3.00% |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants (Details) - USD ($) | Nov. 26, 2018 | May 07, 2018 | Mar. 23, 2016 | Mar. 10, 2011 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 21, 2020 | Jul. 23, 2013 |
Stockholders’ Equity | ||||||||
Warrants outstanding | 9,357 | |||||||
January 2020 Offering | ||||||||
Stockholders’ Equity | ||||||||
Number of shares of common stock issuable through warrants | 1,428,571 | |||||||
Common stock warrants | ||||||||
Stockholders’ Equity | ||||||||
Warrants exercised | 1,959,735 | 0 | ||||||
Warrants expired | 0 | |||||||
Warrants exchanged | 470,238 | |||||||
Warrants issued | 0 | |||||||
Common stock warrants | November 2018 Offering | ||||||||
Stockholders’ Equity | ||||||||
Number of shares of common stock exchanged for warrants | $ 1 | |||||||
Number of shares of common stock issuable through warrants | 657,142 | |||||||
Exercise price | $ 11.55 | |||||||
Expiration term | 5 years | |||||||
Common stock warrants | May 2018 Offering | ||||||||
Stockholders’ Equity | ||||||||
Warrants exercised | 497,094 | |||||||
Number of shares of common stock issuable through warrants | 1,357,142 | |||||||
Number of shares of common stock each warrant is exercisable into | 1 | |||||||
Exercise price | $ 11.09 | |||||||
Common stock issued for conversion of warrants | 1,026,785 | |||||||
Expiration term | 5 years | |||||||
Common stock warrants | March 2016 Offering | ||||||||
Stockholders’ Equity | ||||||||
Number of shares of common stock issuable through warrants | 97,500 | 1,785 | ||||||
Exercise price | $ 70 | $ 33.60 | $ 875 | |||||
Expiration term | 5 years | 10 years | ||||||
Warrants outstanding | 248 | |||||||
Pre-funded warrant | May 2018 Offering | ||||||||
Stockholders’ Equity | ||||||||
Exercise price | $ 0.07 |
Stockholders' Equity - Equity C
Stockholders' Equity - Equity Compensation Plan - Narrative (Details) - shares | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2009 | Dec. 31, 2018 | Oct. 31, 2018 | Jun. 30, 2017 | Dec. 31, 2015 | Jun. 30, 2014 | Apr. 30, 2011 | Mar. 31, 2010 | |
Stockholders’ Equity | |||||||||||
Granted | 1,167,749 | 417,120 | |||||||||
Outstanding stock options | 1,480,139 | 437,603 | 66,422 | ||||||||
Dividend yield | |||||||||||
Stockholders’ Equity | |||||||||||
Annual interest on outstanding balance | 0.00% | ||||||||||
2009 Stock Incentive Plan | |||||||||||
Stockholders’ Equity | |||||||||||
Number of shares authorized | 21,739 | 65,217 | 21,739 | ||||||||
Expiration term | 10 years | ||||||||||
Common shares available for issuance | 86,957 | ||||||||||
Outstanding stock options | 6,378 | 6,752 | |||||||||
2014 Stock Option Plan | |||||||||||
Stockholders’ Equity | |||||||||||
Number of shares authorized | 50,000 | ||||||||||
Stock Incentive Plan, shares authorized increased | 60,000 | ||||||||||
Outstanding stock options | 30,354 | 32,610 | |||||||||
2009 and 2014 Plans | |||||||||||
Stockholders’ Equity | |||||||||||
Granted | 300,000 | ||||||||||
2017 Stock Option Plan | |||||||||||
Stockholders’ Equity | |||||||||||
Number of shares authorized | 500,000 | ||||||||||
Outstanding stock options | 42,932 | 49,340 | |||||||||
2018 Stock Option Plan | |||||||||||
Stockholders’ Equity | |||||||||||
Number of shares authorized | 4,000,000 | ||||||||||
Increase in the number of shares available for grant | 4,000,000 | ||||||||||
Common shares available for issuance | 1,788,730 | ||||||||||
Outstanding stock options | 1,400,475 | 532,752 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants By Exercise Price (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | 1,480,139 | 437,603 | 66,422 |
Exercise Price | $ 11.05 | $ 17.90 | $ 81.15 |
3/10/2011 | |||
Issuance Date | Mar. 10, 2011 | ||
Number of Shares | 248 | ||
Exercise Price | $ 33.60 | ||
Expiration Date | Mar. 10, 2021 | ||
3/23/2016 | |||
Issuance Date | Mar. 23, 2016 | ||
Number of Shares | 42,308 | ||
Exercise Price | $ 70 | ||
Expiration Date | Mar. 23, 2021 | ||
5/7/2018 | |||
Issuance Date | May 7, 2018 | ||
Number of Shares | 403,025 | ||
Exercise Price | $ 11.09 | ||
Expiration Date | May 8, 2023 | ||
11/26/2018 | |||
Issuance Date | Nov. 26, 2018 | ||
Number of Shares | 313,358 | ||
Exercise Price | $ 11.55 | ||
Expiration Date | Nov. 26, 2023 | ||
Common stock warrants | |||
Exercise Price | $ 14.57 |
Stockholders' Equity - Warrant
Stockholders' Equity - Warrant Activity (Details) - Common stock warrants | 12 Months Ended |
Dec. 31, 2020shares | |
Stockholders’ Equity | |
Outstanding, beginning balance | 1,290,103 |
Issued | 1,428,571 |
Exercised | (1,489,497) |
Exchanged | (470,238) |
Outstanding, ending balance | 758,939 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders’ Equity | ||
Share-based Payment Arrangement, Noncash Expense | $ 6,377,857 | $ 3,269,948 |
Employee stock options | ||
Stockholders’ Equity | ||
Share-based Payment Arrangement, Noncash Expense | 4,966,596 | 1,349,089 |
Employee stock awards | ||
Stockholders’ Equity | ||
Share-based Payment Arrangement, Noncash Expense | 1,072,506 | 1,243,526 |
Non-employee stock awards | ||
Stockholders’ Equity | ||
Share-based Payment Arrangement, Noncash Expense | 179,792 | 325,521 |
Non-employee stock options | ||
Stockholders’ Equity | ||
Share-based Payment Arrangement, Noncash Expense | $ 158,963 | $ 351,812 |
Stockholders' Equity - Accounti
Stockholders' Equity - Accounting for Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders’ Equity | |||
Stock-based compensation | $ 6,377,857 | $ 3,269,948 | |
Compensation expenses capitalized | $ 0 | $ 0 | |
Term of award | P10Y | P10Y | |
Maximum | |||
Stockholders’ Equity | |||
Vesting period | 10 years | ||
Employee stock options | |||
Stockholders’ Equity | |||
Vesting period | 4 months |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders’ Equity | ||
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Stockholders’ Equity | ||
Expected volatility | 83.13% | 89.59% |
Risk-free interest rate | 0.26% | 1.63% |
Expected lives (years) | 5 years | 5 years 4 months 24 days |
Maximum | ||
Stockholders’ Equity | ||
Expected volatility | 101.68% | 91.03% |
Risk-free interest rate | 1.69% | 2.52% |
Expected lives (years) | 6 years 3 months 18 days | 6 years 3 months 18 days |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | ||
Stock options outstanding at beginning of period | 437,603 | 66,422 |
Granted | 1,167,749 | 417,120 |
Exercised | (7,140) | (285) |
Forfeited/Expired | (118,073) | (45,654) |
Stock options outstanding at end of period | 1,480,139 | 437,603 |
Stock options exercisable at end of period | 871,721 | |
Weighted Average Exercise Price | ||
Stock options outstanding at beginning of period (in dollars per share) | $ 17.90 | $ 81.15 |
Granted (in dollars per share) | 7.90 | 7.21 |
Exercised (in dollars per share) | 3.99 | 7.42 |
Forfeited/Expired (in dollars per share) | 5.80 | 12.33 |
Stock options outstanding at end of period (in dollars per share) | 11.05 | $ 17.90 |
Stock options exercisable at end of period | $ 14.74 | |
Aggregate Intrinsic Value | ||
Stock options outstanding at beginning of period | $ 44,196 | |
Exercised | 9,813 | |
Stock options outstanding at end of period | 403,744 | $ 44,196 |
Stock options exercisable at end of period | $ 120,993 | |
Weighted Average Remaining Contractual Life | ||
Stock options outstanding at end of period | 8 years 7 months 6 days | |
Stock options exercisable at end of period | 8 years 1 month 6 days | |
Unrecognized stock-based compensation expense | $ 2,400,000 | |
Unrecognized stock-based compensation expense, recognition period | 1 year 9 months | |
Weighted-average fair value of options | $ 5.92 | $ 5.27 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted stock | ||
Shares | ||
Restricted stock at beginning of period | 179,505 | |
Granted | 339,999 | 354,165 |
Vested | (275,115) | (168,272) |
Cancelled | (4,461) | (6,388) |
Restricted stock at end of period | 239,928 | 179,505 |
Weighted Average Fair Value | ||
Restricted stock at beginning of period | $ 5.99 | |
Granted | 3.22 | $ 5.97 |
Vested | 4.27 | 5.90 |
Cancelled | 7.42 | 7.42 |
Restricted stock at end of period | $ 4.02 | $ 5.99 |
Restricted stock | Vest on grant date | ||
Stockholders’ Equity | ||
Vesting percentage | 50.00% | |
Restricted stock | Vest on first anniversary | ||
Stockholders’ Equity | ||
Vesting percentage | 30.00% | |
Restricted stock | Vest on each anniversary thereafter | ||
Stockholders’ Equity | ||
Vesting percentage | 10.00% | |
RSU's | ||
Shares | ||
Restricted stock at beginning of period | 4,291 | 8,073 |
Vested | (2,342) | (3,104) |
Cancelled | (49) | (678) |
Restricted stock at end of period | 1,900 | 4,291 |
Weighted Average Fair Value | ||
Restricted stock at beginning of period | $ 30.29 | $ 33.78 |
Vested | 33.15 | 37.37 |
Cancelled | 36.57 | 39.44 |
Restricted stock at end of period | $ 26.60 | $ 30.29 |
Increments for delivery of shares for time-based awards | 25.00% |
Income Tax (Details)
Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax | ||
Unrecognized tax benefit | $ 0 | $ 0 |
Unrecognized income tax benefits impact on effective income tax rate | 0 | 0 |
Accrual for interest and penalties relating to uncertain income tax positions | $ 0 | 0 |
Statutory federal tax rate | 21.00% | |
Valuation allowance | $ 32,484,566 | 26,793,281 |
State Net Operating Loss Carryforwards | ||
Income Tax | ||
Net operating loss carryforwards | $ 103,538,617 | |
Net operating loss carryforwards expiration dates | Dec. 31, 2024 | |
Federal Net Operating Loss Carryforwards | ||
Income Tax | ||
Net operating loss carryforwards | $ 118,799,856 | |
Net operating loss carryforwards expiration dates | Dec. 31, 2029 | |
Pelican Therapeutics | ||
Income Tax | ||
Net operating loss carryforwards | $ 3,027,284 | |
State Net Pelican Therapeutics | ||
Income Tax | ||
Net operating loss carryforwards | 2,464,819 | |
Foreign Net Operating Loss Carryforwards | ||
Income Tax | ||
Net operating loss carryforwards | 127,610 | |
Pelican Net Operating Loss Carryforwards | ||
Income Tax | ||
Net operating loss carryforwards | $ 2,416,776 |
Income Tax - Income Tax Expense
Income Tax - Income Tax Expense (Benefit) (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Deferred Expense: | |
Federal | $ 45,178 |
Total | $ 45,178 |
Income Tax - Income Tax Rate Di
Income Tax - Income Tax Rate Differences (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax | ||
Federal income tax expense at statutory rate: | $ (5,540,000) | $ (4,271,000) |
Increase (reduction) in income tax resulting from: | ||
State Income Taxes | (433,000) | (581,000) |
Foreign Rate Differential | 5,000 | (9,000) |
Nondeductible Expenses | 210,000 | 15,000 |
Research & Development Credit | (682,000) | (772,000) |
Stock Based compensation | 113,000 | 132,000 |
Excess Executive Compensation | 248,000 | 295,000 |
Payout of Contingent Consideration | 421,000 | |
Goodwill Impairment | 155,000 | |
Reserve for Loss Carryforwards Limited by Sec. 382 | 8,000 | 8,000 |
Other | (41,000) | 74,178 |
Increase (Decrease) in Valuation Allowance | $ 5,691,000 | 4,999,000 |
Total | $ 45,178 |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net Operating Losses | $ 26,496,651 | $ 22,278,013 |
R&D Credits | 4,572,049 | 3,829,550 |
Stock Compensation | 1,931,784 | 878,094 |
Contingent Consideration | 668,994 | 854,129 |
Lease Liability | (99,761) | 9,950 |
Other Accrued Expenses | 20,797 | |
Deferred tax assets | 33,569,717 | 27,870,533 |
Deferred tax liabilities: | ||
Intangible Assets | (29,781) | |
Property, plant and equipment, primarily due to differences in depreciation | (1,347,399) | (1,347,399) |
Other Accrued Expenses | (69,882) | (91,764) |
Deferred tax liabilities | (1,447,062) | (1,439,163) |
Valuation allowance | (32,484,566) | (26,793,281) |
Net deferred tax assets (liabilities) | $ (361,911) | $ (361,911) |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) | Jan. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2019 |
Leases | ||||
Lease, Practical Expedients, Package [true false] | false | |||
Operating Lease, Right-of-Use Asset | $ 520,399 | $ 2,035,882 | $ 2,287,500 | $ 2,000,000 |
Operating lease liability | $ 528,253 | 1,580,389 | 1,736,406 | $ 1,400,000 |
Operating lease payments | $ 300,000 | $ 700,000 | ||
Effective interest rate | 6.17% | 6.17% | ||
Operating lease cost | $ 435,024 | $ 191,737 | ||
Finance lease cost | ||||
Amortization of lease assets | 114,201 | 5,210 | ||
Interest on lease liabilities | 17,972 | 954 | ||
Lease cost | $ 132,173 | $ 6,164 | ||
Weighted average remaining lease term (years), Operating leases | 5 years 10 months 24 days | 7 years | ||
Weighted average remaining lease term (years), Finance leases | 2 years | 3 years | ||
Weighted average discount rate, Operating leases | 6.49% | 6.58% | ||
Weighted average discount rate, Finance leases | 6.17% | 6.17% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2019 | Jan. 01, 2019 |
Maturities of operating lease liabilities | ||||
Year 1 | $ 369,995 | $ 321,273 | ||
Year 2 | 360,839 | 330,032 | ||
Year 3 | 244,973 | 338,960 | ||
Year 4 | 231,503 | 244,973 | ||
Year 5 | 238,452 | 231,503 | ||
Thereafter | 454,820 | 693,272 | ||
Total minimum lease payments | 1,900,582 | 2,160,013 | ||
Less: imputed interest | (320,193) | (423,607) | ||
Present value of operating lease liabilities | 1,580,389 | 1,736,406 | $ 1,400,000 | $ 528,253 |
Maturities of finance lease liabilities | ||||
Year 1 | 120,684 | 58,980 | ||
Year 2 | 155,694 | 58,980 | ||
Year 3 | 10,284 | 93,990 | ||
Total minimum lease payments | 286,662 | 211,950 | ||
Less: imputed interest | (18,295) | (20,179) | ||
Present value of lease liabilities | 268,367 | 191,771 | ||
Maturities of lease liabilities | ||||
Year 1 | 490,679 | 380,253 | ||
Year 2 | 516,533 | 389,012 | ||
Year 3 | 255,257 | 432,950 | ||
Year 4 | 231,503 | 244,973 | ||
Year 5 | 238,452 | 231,503 | ||
Thereafter | 454,820 | 693,272 | ||
Total minimum lease payments | 2,187,244 | 2,371,963 | ||
Less: imputed interest | (338,488) | (443,786) | ||
Present value of lease liabilities | $ 1,848,756 | $ 1,928,177 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2018 | Sep. 30, 2018 | |
Board of Directors | ||||
Related Party Transactions | ||||
Cash compensation | $ 61,500 | $ 221,000 | ||
Pelican Therapeutics, Inc. | ||||
Related Party Transactions | ||||
Ownership interest in subsidiary | 85.00% | 80.00% | ||
Pelican Therapeutics, Inc. | Pelican, Inc. | ||||
Related Party Transactions | ||||
Ownership interest in subsidiary | 85.00% |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation of Net Loss (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net Loss Per Share | ||
Net loss | $ (26,381,389) | $ (20,384,716) |
Net loss: Non-controlling interest | (331,652) | (367,148) |
Net loss attributable to Heat Biologics, Inc. | $ (26,049,737) | $ (20,017,568) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 15,982,568 | 4,754,542 |
Net loss per share applicable to Heat Biologics, Inc - basic and diluted | $ (1.63) | $ (4.21) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Employee stock options | ||
Net Loss Per Share | ||
Potentially dilutive securities | 1,480,139 | 437,603 |
Restricted stock subject to forfeiture and restricted stock units | ||
Net Loss Per Share | ||
Potentially dilutive securities | 241,828 | 183,796 |
Common stock warrants | ||
Net Loss Per Share | ||
Potentially dilutive securities | 758,939 | 1,290,103 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events - At The Market Offerings $ in Millions | 3 Months Ended |
Mar. 24, 2021USD ($)shares | |
Subsequent Events | |
Shares issued (in shares) | shares | 2,106,027 |
Net proceeds | $ | $ 25.6 |