10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________

FORM 10-Q

________________________________

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

For the quarterly period ended March 31, 2020

OR

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

Commission File Number: 001-33958

SELLAS Life Sciences Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-8099512
(State of incorporation)	(I.R.S. Employer Identification No.)

15 West 38^th Street, 10^th Floor,New York,NY 10018

(917)438-4353

(Address, including zip code, and telephone number, including

area code, of registrant's principal executive offices)

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

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

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

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

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    o  Yes    xNo

As of May 14, 2020, SELLAS Life Sciences Group, Inc. had outstanding 6,717,900 shares of common stock.

EXPLANATORY NOTE

Unless stated otherwise, the information contained in these consolidated financial statements gives effect to a one-for-fifty reverse stock split of our shares of common stock effected on November 7, 2019. See Note 3 under our consolidated financial statements for further information.

SELLAS LIFE SCIENCES GROUP, INC.

FORM 10-Q - Quarterly Report

For the Quarter Ended March 31, 2020

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	3
	Unaudited Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	3
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019	4
	Unaudited Consolidated Statement of Stockholders' Equity for the three months ended March 31, 2020 and 2019	5
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019	6
	Unaudited Notes to Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4	Controls and Procedures	29
	PART II - OTHER INFORMATION
Item 1	Legal Proceedings	30
Item 1A	Risk Factors	30
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3	Defaults Upon Senior Securities	31
Item 4	Mine Safety Disclosures	31
Item 5	Other Information	31
Item 6	Exhibits	31
	Signatures

The names “SELLAS Life Sciences Group, Inc.,” “SELLAS,” the SELLAS logo, and other trademarks or service marks of SELLAS Life Sciences Group, Inc. appearing in this Quarterly Report on Form 10-Q are the property of SELLAS Life Sciences Group, Inc. Other trademarks, service marks or trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. We do not intend the use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of or by either of, these other companies.

Unless the context otherwise indicates, references in these notes to the “Company,” “we,” “us” or “our” refer to SELLAS Life Sciences Group, Inc. and its wholly owned subsidiaries.

1

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements that reflect our current views with respect to our development programs, business strategy, business plan, financial performance and other future events. These statements include forward-looking statements both with respect to us, specifically, and our industry, in general. Such forward-looking statements include the words “expect,” “intend,” “plan,” “believe,” “project,” “estimate,” “may,” “should,” “anticipate,” “will” and similar statements of a future or forward-looking nature identify forward-looking statements.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. In addition, while the Company expects the COVID-19 pandemic to have an impact on its business operations and financial results, the extent of the impact on the Company’s clinical development and regulatory efforts, its corporate development objectives, its financial position and the value of and market for its common stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States and in other countries, and the effectiveness of actions taken globally to contain and treat the disease. There are or will be important factors that could cause actual results to differ materially from those indicated in these statements. These factors include, but are not limited to, those factors set forth in the sections captioned “Risk Factors,” “Legal Proceedings,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission ("SEC") on March 13, 2020 ("2019 Annual Report") and in our other public filings with the SEC, all of which you should review carefully. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

2

PART I FINANCIAL INFORMATION

ITEM  1. FINANCIAL STATEMENTS

SELLAS LIFE SCIENCES GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)

(Unaudited)

	March 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	6,746		$	7,277
Restricted cash and cash equivalents	100			100
Stock subscription receivable	—			308
Prepaid expenses and other current assets	1,944			557
Total current assets	8,790			8,242
Operating lease right-of-use asset	123			217
In-process research and development	5,700			5,700
Goodwill	1,914			1,914
Deposits and other assets	499			536
Total assets	$	17,026		$	16,609
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,624		$	3,902
Accrued expenses and other current liabilities	888			1,171
Operating lease liability	123			217
Total current liabilities	3,635			5,290
Deferred tax liability	262			262
Warrant liability	17			52
Contingent consideration	5,050			4,912
Total liabilities	8,964			10,516
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; Series A convertible preferred stock, 17,500 shares designated; no shares issued and outstanding at March 31, 2020 and December 31, 2019	—			—
Common stock, $0.0001 par value; 350,000,000 shares authorized, 6,717,900 and 5,080,100 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively.	7			5
Additional paid-in capital	113,345			107,235
Accumulated deficit	(105,290		)	(101,147		)
Total stockholders’ equity	8,062			6,093
Total liabilities and stockholders’ equity	$	17,026		$	16,609

See accompanying notes to unaudited consolidated financial statements.

3

SELLAS LIFE SCIENCES GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2020			2019
Operating expenses:
Research and development	$	1,864		$	1,859
General and administrative	2,200			2,500
Total operating expenses and operating loss	(4,064		)	(4,359		)
Non-operating income (expense):
Change in fair value of warrant liability	35			195
Change in fair value of contingent consideration	(138		)	(387		)
Interest income (expense), net	24			14
Total non-operating income (expense), net	(79		)	(178		)
Net loss	(4,143		)	(4,537		)
Deemed dividend arising from warrant modifications	(78		)	(439		)
Net loss attributable to common stockholders	$	(4,221	)	$	(4,976	)
Per share information:
Net loss per common share attributable to common stockholders, basic and diluted	$	(0.66	)	$	(11.12	)
Weighted-average common shares outstanding, basic and diluted	6,374,979			447,362

See accompanying notes to unaudited consolidated financial statements.

4

SELLAS LIFE SCIENCES GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Amounts in thousands, except share amounts)

(Unaudited)

	Three Months Ended March 31, 2020
	Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit			Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	—	$	—	5,080,100	$	5	$	107,235	$	(101,147	)	$	6,093
Issuance of common stock and common stock warrants, net of issuance costs	—	—		1,189,000	1		5,962		—			5,963
Issuance of common stock upon exercise of pre-funded warrants	—	—		448,800	1		3		—			4
Stock-based compensation	—	—		—	—		145		—			145
Net loss	—	—		—	—		—		(4,143		)	(4,143		)
Balance at March 31, 2020	—	$	—	6,717,900	$	7	$	113,345	$	(105,290	)	$	8,062

	Three Months Ended March 31, 2019
	Preferred Stock			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2018	—	$	—	440,529	$	1	$	87,099		$	(81,855	)	$	5,245
Impact of anti-dilution protection on liability-classified warrants	—	—		—	—		(173		)	—			(173		)
Issuance of common stock upon exercise of warrants	—	—		43,000	—		2,230			—			2,230
Stock-based compensation	—	—		—	—		185			—			185
Net loss	—	—		—	—		—			(4,537		)	(4,537		)
Balance at March 31, 2019	—	$	—	483,529	$	1	$	89,341		$	(86,392	)	$	2,950

See accompanying notes to unaudited consolidated financial statements.

5

SELLAS LIFE SCIENCES GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	For the three months ended March 31,
	2020			2019
Cash flows from operating activities:
Net loss	$	(4,143	)	$	(4,537	)
Adjustment to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	145			185
Change in fair value of common stock warrants	(35		)	(195		)
Change in fair value of contingent consideration	138			387
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(1,350		)	(302		)
Accounts payable	(1,303		)	883
Accrued expenses and other current liabilities	(283		)	(1,412		)
Net cash used in operating activities	(6,831		)	(4,991		)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs	5,988			—
Collection of stock subscription receivable	308			—
Net proceeds from exercise of warrants	4			2,230
Net cash provided by financing activities	6,300			2,230
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	(531		)	(2,761		)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at the beginning of period	7,377			5,451
Cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of period	$	6,846		$	2,690
Supplemental disclosure of cash flow information:
Cash received during the periods for interest	$	24		$	14
Supplemental disclosure of non-cash investing and financing activities:
Operating right of use asset and current and non-current liability	$	123		$	—
Impact of anti-dilution protection on liability-classified warrants	$	—		$	173
Offering expenses in accounts payable and accrued expenses and other current liabilities	$	25		$	—

See accompanying notes to unaudited consolidated financial statements.

6

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business

Overview

SELLAS Life Sciences Group, Inc. (the "Company" or "SELLAS") is a late-stage clinical biopharmaceutical company focused on novel cancer immunotherapeutics for a broad range of cancer indications. SELLAS’ lead product candidate, galinpepimut-S ("GPS"), is licensed from Memorial Sloan Kettering Cancer Center and targets the Wilms Tumor 1 ("WT1") protein, which is present in an array of tumor types. GPS has potential as a monotherapy or in combination to address a broad spectrum of hematologic malignancies and solid tumor indications. In January 2020, the Company commenced a Phase 3 trial for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of their second complete remission. SELLAS’ second product candidate, nelipepimut-S ("NPS"), is a HER2-directed cancer immunotherapy with potential for the treatment of patients with early stage breast cancer with low to intermediate HER2 expression, otherwise known as HER2 1+ or 2+, which includes triple negative breast cancer patients, following standard of care.

As used in this Quarterly Report on Form 10-Q, the words the "Company," and "SELLAS" refer to SELLAS Life Sciences Group, Inc. and its consolidated subsidiaries following the completion of the business combination with Galena Biopharma, Inc., a Delaware corporation ("Galena"), and SELLAS Life Sciences Group, Ltd., a privately held Bermuda exempted company ("Private SELLAS") in December 2017. This business combination is referred to as the Merger. Upon completion of the Merger, the Company's name changed from "Galena Biopharma, Inc." to "SELLAS Life Sciences Group, Inc." and the Company's financial statements became those of Private SELLAS.

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new coronavirus as a “pandemic”. First identified in late 2019 and known now as COVID-19, the outbreak has impacted millions of individuals worldwide. While the Company's current business and operations have not been materially impacted by the coronavirus pandemic, the extent to which the Company's business and operations could be impacted throughout the remainder of 2020 will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, the re-emergence of a second outbreak in the fall or winter, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. In particular, the continued spread of the coronavirus globally could adversely impact the Company's clinical trial operations and could have an adverse impact on the Company's business and the Company's financial results. The Company will continue to monitor the situation closely, but given the uncertainty, management cannot estimate the impact of the COVID-19 pandemic on the Company's financial statements or operations.

2. Liquidity

The Company has not generated any revenues, including from product sales, and has funded operations primarily from the proceeds of sales of its equity interests and convertible notes. Additional financing will be required by the Company to continue to fund its research and development activities. No assurance can be given that any such financing will be available when needed or that the Company’s research and development efforts will be successful and the Company cannot be certain at this time of the impact of the COVID-19 pandemic on its ability to raise additional capital.

7

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

On January 9, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors named therein (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the “January 2020 Registered Offering”), (i) an aggregate of 1,189,000 shares of common stock at an offering price of $3.9825 per share and (ii) an aggregate of 448,800 pre-funded warrants exercisable for shares of common stock (the “Pre-Funded Warrants”) at an offering price of $3.9725 per Pre-Funded Warrant, for gross proceeds of approximately $6.5 million before deducting the placement agent fee and related offering expenses. In a concurrent private placement, the Company issued to the Investors who participated in the January 2020 Registered Offering warrants exercisable for an aggregate of 818,900 shares of common stock at an exercise price of $3.93 per share. Each warrant is immediately exercisable and will expire five and one-half years from the issuance date. The net proceeds to the Company from the January 2020 Registered Offering, after deducting underwriting discounts and commissions and other estimated offering expenses, and excluding the exercise of any warrants, were approximately $6.0 million.

The Company regularly explores alternative means of financing its operations and seeks funding through various sources, including public and private securities offerings, collaborative arrangements with third parties and other strategic alliances and business transactions.

The Company currently does not have any commitments to obtain additional funds and may be unable to obtain sufficient funding in the future on acceptable terms, if at all. If the Company cannot obtain the necessary funding, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties to commercialize potential products or technologies that it might otherwise seek to develop or commercialize independently, consider various other strategic alternatives, including a merger or sale of the Company, or cease operations. If the Company engages in collaborations, it may receive lower consideration upon commercialization of such products than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the product development process.

The Company has evaluated the guidance of Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern, in order to determine whether there is substantial doubt about its ability to continue as a going concern for one year from the date its financial statements are available to be issued. The Company has prepared its consolidated financial statements assuming that it will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative cash flows from operations since inception and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its product candidates, which raises substantial doubt about the Company’s ability to continue as a going concern. Various internal and external factors will affect whether and when the Company’s product candidates become approved drugs and how significant their market share will be, some of which are outside of the Company’s control. The length of time and cost of developing and commercializing these product candidates and/or the failure of any of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

As of March 31, 2020, the Company had cash and cash equivalents of approximately $6.7 million, and restricted cash and cash equivalents of $0.1 million. The Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit of $105.3 million as of March 31, 2020. In addition, the Company had current liabilities of $3.6 million as of March 31, 2020. The Company expects its cash and cash equivalents as of March 31, 2020 will enable the Company to fund its operating expenses and capital expenditure requirements through the end of 2020.

8

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

3. Basis of Presentation and Significant Accounting Policies

The Summary of Significant Accounting Policies included in the Company's 2019 Annual Report have not materially changed, except as set forth below.

Basis of Presentation

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

Principles of Consolidation

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. Unless the context otherwise indicates, reference in these notes to the "Company" refer to SELLAS Life Sciences Group, Inc., and its wholly owned subsidiaries, Private SELLAS, SLSG Limited, LLC, Sellas Life Sciences Limited, and Apthera, Inc. The functional currency of the Company's non-U.S. operations is the U.S. dollar.

Unaudited Interim Results

These consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and the notes thereto included in the 2019 Annual Report. The accompanying consolidated financial statements at March 31, 2020 and for the three months ended March 31, 2020 and 2019, are unaudited, but include all adjustments, consisting of normal recurring entries, that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2019 have been derived from the audited financial statements as of that date.

Reverse Stock Split

On November 6, 2019, the Company filed a certificate of amendment to its amended and restated Certificate of Incorporation to effect a 1 - for - 50 reverse stock split of the Company's outstanding shares of common stock, which became effective on November 7, 2019. The shares of common stock underlying the Company's outstanding options and warrants were also proportionately adjusted for the reverse stock split. In addition, the number of shares of common stock available for issuance under the Company’s equity incentive plans and employee stock purchase plan were proportionately adjusted for the reverse stock split. Further, the per share exercise prices for options granted under such plans were proportionately adjusted for the reverse stock split. The reverse stock split reduced the number of shares of the Company’s common stock that were outstanding at November 8, 2019 from 227,800,147 to 4,549,208, after the cancellation of fractional shares. No fractional shares were issued in connection with the reverse stock split. Stockholders who otherwise held fractional shares of the Company’s common stock as a result of the reverse stock split received a cash payment in lieu of such fractional shares. These consolidated financial statements give retroactive effect to such reverse stock split and all share and per share amounts have been adjusted accordingly.

9

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Restricted Stock Units with Performance and Service Conditions

During the three months ended March 31, 2020, the Board of Directors granted restricted stock units ("RSUs") to certain employees that vest based on performance and service conditions. The fair values of the RSUs are measured on the date of grant and are based on the Company's closing stock price on such date. Compensation expense is recognized for the number of RSUs expected to be earned, provided the requisite service period has been rendered, after assessing the probability that certain performance criteria will be met. Cumulative adjustments are recorded each quarter to reflect the estimated outcome of the performance-related conditions until the date results are determined and settled. If performance criteria are not met or are not expected to be met, any compensation expense previously recognized to date associated with the RSUs will be reversed.

Net Loss Per Share

Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as warrants, stock options and unvested restricted stock that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive.

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive (in thousands):

	Three Months Ended March 31,
	2020	2019
Common stock warrants	1,120	354
Stock options	194	27
RSUs	170	—
	1,484	381

Recent Accounting Pronouncements Adopted

In August 2018, FASB issued No. ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU No. 2018-13"). ASU No. 2018-13 modifies, adds and removes certain specific disclosure requirements on fair value measurements in Topic 820. The amendments in ASU No. 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company's disclosures. For the new disclosure regarding our Level 3 instruments, please read Note 4 to these consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Accounting ("ASU No. 2018-07"), which simplifies the accounting for share-based payments granted to nonemployees for goods and services. ASU No. 2018-07 supersedes ASC 505-50 and expands the scope of ASC 718, Compensation - Stock Compensation (Topic 718) ("ASC 718"), to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. ASU No. 2018-07 generally requires an entity to use a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year, for all (1) liability-classified nonemployee awards that have not been settled as of the adoption date and (2) equity-classified nonemployee awards for which a measurement date has not been established. This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company's consolidated financial statements and related disclosure.

10

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

4. Fair Value Measurements

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

Description	March 31, 2020		Quoted Prices In     Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Unobservable  Inputs (Level 3)
Assets:
Cash equivalents	$	6,304	$	6,304	$	—	$	—
Total assets measured and recorded at fair value	$	6,304	$	6,304	$	—	$	—
Liabilities:
Warrant liability	$	17	$	—	$	—	$	17
Contingent consideration	5,050		—		—		5,050
Total liabilities measured and recorded at fair value	$	5,067	$	—	$	—	$	5,067

Description	December 31, 2019		Quoted Prices In     Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Unobservable  Inputs (Level 3)
Assets:
Cash equivalents	$	7,027	$	7,027	$	—	$	—
Total assets measured and recorded at fair value	$	7,027	$	7,027	$	—	$	—
Liabilities:
Warrant liability	$	52	$	—	$	—	$	52
Contingent consideration	4,912		—		—		4,912
Total liabilities measured and recorded at fair value	$	4,964	$	—	$	—	$	4,964

The Company did not transfer any financial instruments into or out of Level 3 classification during the three months endedMarch 31, 2020 or the year ended December 31, 2019. See Note 8, Warrants to Acquire Shares of Common Stock, for a reconciliation of the changes in the fair value of the warrant liability for the three months endedMarch 31, 2020.

A reconciliation of the change in the fair value of the contingent consideration liability for the three months endedMarch 31, 2020 is as follows (in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent consideration, December 31, 2019	$	4,912
Change in the estimated fair value of the contingent consideration	138
Contingent consideration, March 31, 2020	$	5,050

11

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

The fair value of the contingent consideration is measured at the end of each reporting period using Level 3 inputs in a probability-weighted, discounted cash-outflow model. The contingent consideration relates to Galena's acquisition of Apthera, Inc. in 2011 and the future contingent payments of up to $32.0 million based on the achievement of certain development and commercial milestones relating to the Company’s nelipepimut-S ("NPS") product candidate, of which $2.0 million has been paid to date. The remaining contingent consideration of up to $30.0 million is payable at the election of the Company in either cash or shares of common stock, provided that the Company may not issue any shares in satisfaction of any contingent consideration unless it has first obtained approval from its stockholders in accordance with Rule 5635(a) of the Nasdaq Marketplace Rules.

The significant unobservable assumptions include the probability of achieving each milestone, the date the Company expects to reach the milestone, and a determination of present value factors used to discount future expected cash outflows. Changes in fair value reflect new information about the probability and anticipated timing of meeting the conditions of the milestone payments. In the absence of new information, changes in fair value will only reflect the interest component of contingent consideration related to the passage of time. As of March 31, 2020, estimated future contingent milestone payments related to the Company's business range from zero if no milestone events are achieved, to a maximum of $30.0 million if all development and commercial milestones are reached. As of March 31, 2020, resulting probability-weighted cash flows were discounted using a weighted average cost of capital of 11.8% for development milestones and cost of debt of 3.6% for the commercial milestones. The Company estimates the timing of achievement of these development milestones to range from five to eight years as of March 31, 2020.

5. Balance Sheet Accounts

Prepaid expenses and other current liabilities consist of the following (in thousands):

	March 31, 2020		December 31, 2019
Insurance	$	1,239	$	200
Clinical development	492		224
Professional services	129		49
Other	84		84
Prepaid expenses and other current assets	$	1,944	$	557

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

	March 31, 2020		December 31, 2019
Clinical trial costs	$	519	$	371
Compensation and related benefits	235		606
Professional fees	134		194
Accrued expenses and other current liabilities	$	888	$	1,171

12

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

6. Commitments and Contingencies

Office Space Rental

The Company has a non-cancelable operating lease for office space in New York, New York, which began August 1, 2018 with a term through July 31, 2020. The Company adopted ASC 842 in the first quarter of 2019 and as a result of the adoption, the Company recognized a current operating lease liability of $0.4 million and a non-current operating lease liability of $0.2 million with a corresponding right of use asset ("ROU") of $0.6 million, which is based on the present value of the minimum rental payments of the lease. The discount rate used to account for the Company's operating lease under ASC 842 is the Company’s estimated incremental borrowing rate of 13%. As of March 31, 2020, the lease has a remaining term of less than 1.0 year.

Rent expense related to the Company's operating lease was approximately $0.1 million for the three months ended March 31, 2020 and 2019. Future minimum rental payments under the Company's non-cancelable operating lease are as follows as of March 31, 2020 (in thousands):

Total minimum lease payments, all due in 2020	$	128
Less: imputed interest	(5		)
Operating lease liability	$	123

Operating lease amortization of the ROU asset was $0.1 million for the three months ended March 31, 2020 and 2019, respectively.

Legal Proceedings

From time to time, the Company is subject to various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business, which may include employment matters, breach of contract disputes and stockholder litigation. Such actions and proceedings are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, when the Company has assessed that a loss is probable and an amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. In the opinion of management, as of the date hereof, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s consolidated results of operations, financial position or cash flows.

13

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

The Company’s predecessor company, Galena, was involved in multiple legal proceedings and administrative actions, including stockholder class actions, both state and federal, and to which the Company is now subject, as follows:

On February 13, 2017, certain putative shareholder securities class action complaints were filed in federal court alleging, among other things, that Galena and certain of Galena's former officers and directors failed to disclose that Galena’s promotional practices for Abstral^® (fentanyl sublingual tablets) were allegedly improper and that Galena may be subject to civil and criminal liability, and that these alleged failures rendered Galena’s statements about its business misleading. The actions were consolidated, lead plaintiffs were named by the U.S. District Court for the District of New Jersey and a consolidated complaint was filed. The Company filed a motion to dismiss the consolidated complaint. On August 21, 2018, the Company's motion to dismiss the consolidated complaint was granted without prejudice to file an amended complaint. On September 20, 2018, the plaintiffs filed an amended complaint. On October 22, 2018, the Company filed a motion to dismiss the amended complaint. On November 13, 2019, the U.S. District Court for the District of New Jersey granted the Company's motion to dismiss. On December 20, 2019, the lead plaintiffs filed a Second Amended Consolidated Class Action Complaint. On January 29, 2020, the Company filed a motion to dismiss the amended complaint.

In March 2017, a derivative complaint was filed in the U.S. District Court for the District of New Jersey against the Company’s former directors and Galena, as a nominal defendant. In July 2017, a derivative complaint was filed in California state court against the Company’s former directors and Galena, as a nominal defendant. In January 2018, a derivative complaint was filed in the U.S. District Court for the District of New Jersey against the Company’s former directors, officers and employees, and the Company as a nominal defendant. These complaints purport to assert derivative claims for breach of fiduciary duty on the Company’s behalf against the Company’s former directors and, in certain of the complaints, certain of the Company’s former officers and former employees, based on substantially similar facts as alleged in the putative shareholder securities class action complaints mentioned above. These lawsuits are currently stayed pending resolution of motions to dismiss in the referenced securities class action.

7. Stockholders’ Equity

Preferred Stock

The Company has authorized up to 5,000,000 shares of preferred stock, $0.0001 par value per share, for issuance.

Common Stock

The Company has authorized up to 350,000,000 shares of common stock, $0.0001 par value per share, for issuance.

On October 29, 2019, the Company entered into an Equity Distribution Agreement (the "Distribution Agreement") with Maxim Group LLC (the "Agent"), pursuant to which the Company was permitted to offer and sell shares of common stock through the Agent having an aggregate offering price up to $5.0 million in gross proceeds. In connection with such sales, the Agent collected fees equal to 3% of the gross sales price of all shares of common stock sold. Sales of the shares under the Distribution Agreement were made in transactions deemed to be "at the market offering" as defined in Rule 415 under the Securities Act of 1933. Shares sold under the Distribution Agreement were offered and sold pursuant to the Company's effective registration statement on Form S-3. During the year ended December 31, 2019, the Company sold 524,097 shares of common stock pursuant to the Distribution Agreement for net proceeds of $2.7 million. The Distribution Agreement was terminated on January 9, 2020. There were no shares of common stock sold pursuant to the Distribution Agreement in 2020.

14

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

On January 9, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors named therein (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the “January 2020 Registered Offering”), (i) an aggregate of 1,189,000 shares of common stock, par value $0.0001 per share, of the Company, at an offering price of $3.9825 per share and (ii) an aggregate of 448,800 pre-funded warrants exercisable for shares of common stock (the “Pre-Funded Warrants”) at an offering price of $3.9725 per pre-funded warrant, for gross proceeds of approximately $6.5 million before deducting the placement agent fee and related offering expenses. In a concurrent private placement, the Company issued to the Investors who participated in the January 2020 Registered Offering warrants exercisable for an aggregate of 818,900 shares of common stock at an exercise price of $3.93 per share. Each warrant is immediately exercisable and will expire five and one-half years from the issuance date. The net proceeds to the Company from the January 2020 Registered Offering, after deducting the placement agent fee and other estimated offering expenses, and excluding the exercise of any warrants, was approximately $6.0 million.

As of March 31, 2020, the Company has shares of common stock reserved for future issuance as follows (in thousands):

Warrants outstanding	1,120
Stock options outstanding	194
Restricted stock units outstanding	170
Shares reserved for future issuance under the Company’s 2019 Equity Incentive Plan	115
Shares reserved for future issuance under the Employee Stock Purchase Plan	8
Total common stock reserved for future issuance	1,607

Stock Subscription Receivable

Prior to December 31, 2019, the Company sold 75,000 shares of common stock for gross proceeds of $0.3 million. As the gross cash proceeds of $0.3 million were not received until January 2, 2020, the Company recorded a stock subscription receivable of $0.3 million as of December 31, 2019.

15

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

8. Warrants to Acquire Shares of Common Stock

Warrants Outstanding

The following is a summary of the activity of the Company's warrants to acquire shares of common stock for the three months ended March 31, 2020 (in thousands):

Warrant Issuance	Outstanding, December 31, 2019	Granted	Exercised		Canceled/Expired		Outstanding, March 31, 2020	Expiration
January 2020 Offering	—	819	—		—		819	July 2025
Pre-funded January 2020 Offering	—	449	(449	)	—		—	July 2025
June 2019 Offering	2	—	—		—		2	June 2024
March 2019 Exercise Agreement	63	—	—		—		63	March 2024
July 2018 Offering	208	—	—		—		208	July 2023
Series A Convertible Preferred	19	—	—		—		19	September 2023
2017 Equilibria	6	—	—		—		6	December 2022
Galena February 2017	1	—	—		—		1	February 2022
Galena Other	3	—	—		(1	)	2	January 2022
	302	1,268	(449	)	(1	)	1,120

Warrants to acquire shares of common stock consist of warrants that may be settled in cash, which are liability-classified warrants, and equity-classified warrants.

Warrants Classified as Liabilities

Liability-classified warrants consist of warrants to acquire common stock issued in connection with previous equity financings for Series A Convertible Preferred Stock, Galena's February 2017 financing, and various other Galena equity financings that were assumed by the Company at the consummation of the Merger. These warrants may be settled in cash and were determined not to be indexed to the Company’s common stock.

The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the consolidated statement of operations as change in fair value of warrant liability. The fair value of the warrants is estimated using a Black-Scholes pricing model with the following inputs:

As of March 31, 2020
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.50	123.37	%	0.31	%
Galena February 2017	1	$	1,650.00	1.87	151.18	%	0.22	%
Galena Other	2	$	30,901.09	1.79	151.18	%	0.22	%
As of December 31, 2019
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.75	112.84	%	1.64	%
Galena February 2017	1	$	1,650.00	2.12	114.91	%	1.64	%
Galena Other	3	$	41,494.00	1.43	114.91	%	1.64	%

16

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

The expected volatility assumptions are based on the Company's implied volatility in combination with the implied volatilities of similar publicly traded entities. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the time of valuation. The dividend yield used in the pricing model is zero, because the Company has no present intention to pay cash dividends.

The changes in fair value of the warrant liability for the three months ended March 31, 2020 were as follows (in thousands):

Warrant Issuance	Warrant liability, December 31, 2019		Fair value of warrants granted		Fair value of warrants exercised		Adjustment to exercise price of warrants		Change in fair value of warrants			Warrant liability, March 31, 2020
Series A Convertible Preferred	$	52	$	—	$	—	$	—	$	(35	)	$	17
Galena February 2017	—		—		—		—		—			—
	$	52	$	—	$	—	$	—	$	(35	)	$	17

Warrants Classified as Equity

The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock issued during the January 2020 Offering and concurrent private placement were recorded as equity upon issuance. During its evaluation of equity classification of these pre-funded warrants and common stock purchase warrants, the Company considered the conditions as prescribed within ASC 815-40, Derivatives and Hedging, Contracts in an Entity’s own Equity (“ASC 815-40”). The conditions within ASC 815-40 are not subject to a probability assessment. The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock do not fall under the liability criteria within ASC 480, Distinguishing Liabilities from Equity, as they are not puttable and do not represent an instrument that has a redeemable underlying security. The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock do meet the definition of a derivative instrument under ASC 815, but are eligible for the scope exception as they are indexed to the Company’s own stock and would be classified in permanent equity if freestanding.

Warrant Modification

On March 6, 2019, the Company entered into a Warrant Exercise Agreement (the "March 2019 Exercise Agreement") with one of the holders of the Company's warrants issued in July 2018. Pursuant to the March 2019 Exercise Agreement, new warrants to purchase up to an aggregate of approximately 76,000 shares of common stock at an exercise price of $70.00 per share ("March 2019 Exercise Agreement Warrants") were issued on a share-for-share basis in an amount equal to the number of the warrants issued in 2018 that were cash exercised by the warrant holder prior to May 31, 2019. On January 2, 2020, the Company amended the March 2019 Exercise Agreement Warrants to provide for an exercise price of $7.50 per share (subject to adjustment for stock splits and the like). The reduced exercise price of the 63,000 March 2019 Exercise Agreement Warrants increased the fair value of these warrants by approximately $0.1 million during the three months ended March 31, 2020, which is recorded as a deemed dividend increasing the net loss attributable to common stockholders and additional paid-in-capital.

17

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

9. Stock-Based Compensation

2017 Equity Incentive Plan

On December 29, 2017, the 2017 Equity Incentive Plan was approved by the stockholders of the Company, and provided for the issuance of up to a maximum of 24,204 shares of common stock underlying stock options granted prior to September 10, 2019. The 2017 Equity Incentive Plan was terminated upon the approval of the 2019 Incentive Plan subject to outstanding stock options granted under the 2017 Equity Incentive Plan that remain exercisable through maturity for the Company's employees and directors.

2019 Equity Incentive Plan

On September 10, 2019, the 2019 Equity Incentive Plan was approved by the stockholders of the Company, and currently allows for issuance of up to (i) 454,005 shares of common stock in connection with the grant of stock-based awards, including stock options, restricted stock, restricted stock units, stock appreciation rights and other types of awards as deemed appropriate plus (ii) 2,684 shares of common stock under the 2017 Equity Incentive Plan that were forfeited back to the Company subsequent to September 10, 2019 and are available for future issuance.

The number of shares reserved for issuance under the 2019 Equity Incentive Plan will automatically increase on January 1 of each year, for a period of not more than four years, commencing on January 1, 2020 and ending on (and including) January 1, 2023, by an amount equal to the lesser of (i) 5% of the total number of shares of common stock outstanding at the end of the prior fiscal year; and (ii) an amount determined by the board of directors or authorized committee. As of March 31, 2020, 114,689 shares of common stock were reserved for future grants under the 2019 Equity Incentive Plan.

The following table summarizes the components of stock-based compensation expense in the consolidated statements of operations for the three months ended March 31, 2020 and 2019, respectively (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1	$	39
General and administrative	144		146
Total stock-based compensation	$	145	$	185

Options to Purchase Shares of Common Stock

The Company uses the Black-Scholes option-pricing model and the following assumptions were used to determine the fair value of all its stock options granted during the three months ended March 31, 2020 and 2019, respectively:

	Three Months Ended March 31,
	2020		2019
Risk free interest rate	0.63	%	2.49	%
Volatility	106.09	%	96.57	%
Expected lives (years)	6.13		6.15
Expected dividend yield	—	%	—	%

The weighted-average grant date fair value of options granted during the three months ended March 31, 2020 and 2019 was $1.54 and $54.00, respectively.

18

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

The Company’s expected common stock price volatility assumption is based upon the Company's own implied volatility in combination with the implied volatility of a basket of comparable companies. The expected life assumptions for employee grants were based upon the simplified method, which averages the contractual term of the Company’s options of ten years with the average vesting term of four years for an average of approximately six years. The expected life assumptions for non-employees were based upon the contractual term of the option. The dividend yield assumption is zero because the Company has never paid cash dividends and presently has no intention to do so. The risk-free interest rate used for each grant was also based upon prevailing short-term interest rates. The Company accounts for forfeitures as they occur.

As of March 31, 2020, there was $1.1 million of unrecognized compensation cost related to outstanding stock options that is expected to be recognized as a component of the Company’s operating expenses over a weighted-average period of 2.39 years.

The following table summarizes stock option activity of the Company for the three months ended March 31, 2020:

	Total Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2019	21,520	$	112.81	8.98	$	—
Granted	172,000	1.89			$	—
Canceled	—	—			$	—
Outstanding at March 31, 2020	193,520	$	14.23	8.90	$	—
Options exercisable at March 31, 2020	7,642	$	119.06	8.71	$	—

The aggregate intrinsic values of outstanding and exercisable stock options at March 31, 2020 were calculated based on the closing price of the Company’s common stock as reported on the Nasdaq Capital Market on March 31, 2020 of $1.73 per share. The aggregate intrinsic value equals the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying stock options.

RSUs with Performance and Service Conditions

The Company granted RSUs subject to both performance-based and service-based vesting conditions to certain of its employees pursuant to the Company's 2019 Equity Incentive Plan that will settle in shares of common stock. These RSUs vest based on the achievement of certain clinical and regulatory milestones and the respective employee's continued employment with the Company. As of March 31, 2020 there was $0.3 million of unrecognized compensation cost related to outstanding RSUs.

The following table summarizes RSU activity of the Company for the three months ended March 31, 2020:

	Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2019	—	$	—
Granted	170,000	$	1.89
Vested	—	$	—
Unvested at March 31, 2020	170,000	$	1.89

19

SELLAS LIFE SCIENCES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

10. Subsequent Events

The Company evaluated all events or transactions that occurred after March 31, 2020 up through the date these financial statements were issued. Other than as disclosed elsewhere in the notes to the consolidated financial statements, the Company did not have any material subsequent events.

20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition as of March 31, 2020 and results of operations for the three months ended March 31, 2020 and 2019, respectively, should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2019 Annual Report, and our other public reports filed with the SEC.

Overview

We are a late-stage clinical biopharmaceutical company focused on developing novel cancer immunotherapeutics for a broad range of cancer indications. Our product candidates currently include galinpepimut-S and nelipepimut-S.

Galinpepimut-S, or GPS

Our lead product candidate, galinpepimut-S, or GPS, is a cancer immunotherapeutic agent licensed from Memorial Sloan Kettering Cancer Center, or MSK, that targets the Wilms tumor 1, or WT1, protein, which is present in 20 or more cancer types. Based on its mechanism of action as a directly immunizing agent, GPS has potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic, or blood, cancers and solid tumor indications.

In February 2020, we commenced an investigator-sponsored clinical trial, or IST, of GPS in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, Opdivo® (nivolumab), in patients with malignant pleural mesothelioma, or MPM, which is being conducted at MSK. This Phase 1 open-label clinical study, or MPM IST, will enroll patients with MPM who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy with the study drug provided by both us and Bristol-Myers Squibb.

In January 2020, we commenced a Phase 3 trial for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of their second complete remission, or CRem2, following successful completion of second-line antileukemic therapy. We expect this study will be used as the basis for a Biologics License Application, or BLA, submission, subject to a statistically significant and clinically meaningful data outcome and agreement with the U.S. Food & Drug Administration, or the FDA. The study is expected to enroll approximately 116 patients at approximately 50 clinical sites in the United States and Europe and is contemplated to have a planned interim safety and futility analysis after 80 events (deaths).

In December 2018, we initiated a Phase 1/2 multi-arm (‘basket’ type) clinical study of GPS in combination with Merck & Co., Inc.’s anti-PD-1 therapy, Keytruda® (pembrolizumab). We plan to enroll up to approximately 90 patients at up to 20 centers in the United States. The initial tumor types being studied are ovarian cancer (second or third line) and colorectal cancer (third or fourth line) with up to approximately 40 patients in total in these two indications, to be followed by AML (in patients having achieved partial response as their best hematological response after four cycles of therapy with hypomethylating agents), triple negative breast cancer, or TNBC, (second line), and small cell lung cancer, or SCLC.

GPS was granted Orphan Drug Product Designations from the FDA, as well as Orphan Medicinal Product Designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track Designation for AML, MPM, and MM from the FDA.

21

Nelipepimut-S or NPS

Nelipepimut-S, or NPS, is a cancer immunotherapy targeting the human epidermal growth factor receptor, or HER2, expressing cancers. Following positive data for the patients in the TNBC cohort received in 2018 from our Phase 2b clinical trial of the combination of trastuzumab (Herceptin®) plus NPS in HER2 low expressing 1+ or 2+ per immunohistochemistry, or IHC) breast cancer patients in the adjuvant setting to prevent recurrences and subsequent discussions with the FDA, and based upon written feedback from the FDA and the totality of clinical, safety and translational NPS data to date, we have finalized the design and plan for a Phase 3 registration-enabling study of NPS in combination with trastuzumab for the treatment of patients with TNBC in the adjuvant setting after standard treatment. If successful, we believe this study may be considered as the basis for a BLA submission to the FDA. We are seeking out-licensing opportunities to fund and conduct the future clinical development of NPS in order to maximize the potential of the program and we do not plan to conduct and fund a Phase 3 program for NPS on our own.

FBP-targeting bivalent vaccine (GALE-301/-302)

In order to prioritize development of our core assets, we have determined to cease development of GALE-301 and GALE-302, cancer immunotherapies that target the E39 peptide derived from the folate binding protein, or FBP, which were licensed in from The Henry M. Jackson Foundation, or HJF, and the MD Anderson Cancer Center, or MDACC. We are currently negotiating a termination of the license agreement with HJF and MDACC.

Recent Developments

On March 11, 2020, the World Health Organization declared the outbreak of a new coronavirus to be a “pandemic”. First identified in 2019 and known now as COVID-19, the outbreak has resulted in various “stay-at-home” and “shutdown” orders through the various states in the United States as well as most countries worldwide. The pandemic has impacted millions of individuals and business worldwide. As we have functioned operationally as a semi-virtual company, the transition to “work-from home” for our employees has not materially altered our business operations. Our Phase 3 REGAL study is in its early stages, with the necessary work to activate additional sites in the United States and Europe continuing without material interruption. Screening is ongoing at the majority of the sites in the GPS + pembrolizumab combination study although certain sites have limited operations to some extent. Due to the uncertainty of these limitations regarding the sites, we now expect initial clinical data in the first half of 2021. We have been informed by MSK that while it is continuing to dose the patients already enrolled in the MPM IST, it is not currently enrolling additional patients. We believe that the COVID-19 pandemic has not materially impacted our efforts to out-license NPS. The extent to which the coronavirus impacts the Company's operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, the re-emergence of a second outbreak in the fall or winter, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. In particular, the continued spread of the coronavirus globally could adversely impact the Company's clinical trial operations and could have an adverse impact on the Company's business and the Company's financial results.

22

Components of Results of Operations

Research and Development

Research and development expense consists of expenses incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred. These expenses include:

• expenses incurred under agreements with CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials;

• manufacturing expenses;

• quality control and quality assurance services;

• outsourced professional scientific development services;

• employee-related expenses, which include salaries, benefits and stock-based compensation;

• payments made under our license agreements, under which we acquired certain intellectual property;

• expenses relating to certain regulatory activities, including filing fees paid to regulatory agencies;

• laboratory materials and supplies used to support our research activities; and

• allocated expenses, utilities and other facility-related costs.

The successful development of our current and future product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any current or future product candidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of our clinical trials, which vary significantly over the life of a project as a result of many factors, including, but not limited to:

• the number of clinical sites included in the trials;

• the length of time required to enroll suitable patients;

• the number of patients that ultimately participate in the trials;

• the number of doses patients receive;

• the duration of patient follow-up;

• the results of clinical trials;

• the expenses associated with manufacturing;

• the receipt of marketing approvals;

• the commercialization of current and future product candidates; and

• the impact of the COVID-19 pandemic.

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We may never succeed in achieving regulatory approval for any of our current or future product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or target indications or focus on others. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials due to the COVID-19 pandemic or otherwise, we could be required to expend significant additional financial resources and time on the completion of clinical development. Cancer immunotherapy product commercialization may take several years and millions of dollars in development costs.

23

Research and development activities are central to our business model. Cancer immunotherapy product candidates in the later stages of clinical development generally have higher development costs than those in the earlier stages of clinical development, primarily due to the increased size and duration of the later-stage clinical trials. We expect our research and development expenses to increase for the foreseeable future as we conduct and complete our ongoing early and late stage clinical trials and initiate additional clinical trials.

General and Administrative Expense

General and administrative expenses consist principally of salaries and related costs for personnel in executive, administrative, finance and legal functions, including stock-based compensation, travel expenses and recruiting expenses, fees for outside legal counsel, and director and officer insurance premiums. Other general and administrative expenses include facility related costs, patent filing and prosecution costs, professional fees for business development, accounting, consulting, legal and tax-related services associated with maintaining compliance with our Nasdaq listing and SEC reporting requirements, investor relations costs, and other expenses associated with being a public company.

If and when we believe that regulatory approval of a product candidate appears likely, we anticipate that an increase in general and administrative expenses will occur as a result of our preparation for commercial operations, particularly as it relates to the sales and marketing of such product candidate.

Non-Operating Income (Expense), Net

Non-operating income (expense), net consists of changes in fair value of our warrant liability, changes in fair value of our contingent consideration, loss on settlement of liability-classified warrants, and interest expense, net. Interest expense, net primarily reflects interest earned from our cash and cash equivalents.

Critical Accounting Policies and Estimates

In the 2019 Annual Report, we disclosed our critical accounting policies and estimates upon which our financial statements are derived. There have been no material changes to these policies since December 31, 2019 that are not included in Note 3 of the accompanying consolidated financial statements for the three months endedMarch 31, 2020. Readers are encouraged to read the 2019 Annual Report in conjunction with this Quarterly Report on Form 10-Q.

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Results of Operations for the Three Months Ended March 31, 2020 and 2019

The following table summarizes our results of operations for the three months ended March 31, 2020 and 2019:

(dollars in thousands)	Three Months Ended March 31,
	2020			2019			Change
Operating expenses:
Research and development	$	1,864		$	1,859		$	5
General and administrative	2,200			2,500			(300		)
Total operating expenses and operating loss	(4,064		)	(4,359		)	295
Non-operating income (expense), net	(79		)	(178		)	99
Net loss	$	(4,143	)	$	(4,537	)	$	394

Further analysis of the changes and trends in our operating results are discussed below.

Research and Development

Research and development expenses were relatively unchanged for the three months ended March 31, 2020 compared to the three months ended March 31, 2019; however, there was a $0.2 million increase in clinical trial expenses, $0.1 million increase in manufacturing related expenses for GPS due to our ongoing basket trial of GPS in combination with pembrolizumab and our Phase 3 clinical trial of GPS as a monotherapy in AML, and $0.1 million in other research and development expenses, partially offset by a $0.2 million decrease in personnel related expenses due to reduced headcount and a $0.2 million decrease in licensing fees per our license agreements. We anticipate that our research and development expenses will increase in the future as we continue to advance the development of GPS, including the ongoing basket trial of GPS in combination with pembrolizumab, and our Phase 3 trial of GPS in AML.

General and Administrative

General and administrative expenses were $2.2 million for the three months ended March 31, 2020 compared to $2.5 million for the three months ended March 31, 2019. The $0.3 million decrease was primarily due to a $0.3 million decrease in legal fees, a $0.2 million decrease in accounting fees, and a $0.1 million decrease in personnel related expenses due to reduced headcount. These decreases were partially offset by a $0.2 million increase in insurance premiums for directors and officers liability insurance and a $0.1 million increase in outsourced consulting and public company costs.

Non-Operating Income (Expense), Net

Non-operating income (expense), net for the three months ended March 31, 2020 and 2019, respectively, was as follows (in thousands):

	Three Months Ended March 31,
	2020			2019			Change
Change in fair value of warrant liability	$	35		$	195		$	(160	)
Change in fair value of contingent consideration	(138		)	(387		)	249
Interest income (expense), net	24			14			10
Total non-operating income (expense), net	$	(79	)	$	(178	)	$	99

Net non-operating income of $0.1 million during the three months ended March 31, 2020 was primarily due to the decrease in the change in the fair value of the contingent consideration liability, partially offset by the increase in the change in the fair value of the warrant liability. The changes in the fair value of contingent consideration liability reflect the interest component of contingent consideration related to the passage of time. The decrease in the estimated fair value of our warrant liability was primarily due to decreases in our common stock price.

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Interest income consisted of interest earned from our cash and cash equivalents.

The change in fair value of warrant liability and change in fair value of contingent consideration are non-cash in nature.

Income Tax Expense

There was no income tax expense for the three months ended March 31, 2020 and 2019. We continue to maintain a full valuation allowance against our net deferred tax assets.

Liquidity and Capital Resources

We have not generated any revenue from product sales or collaboration and licensing agreements in the three months ended March 31, 2020 and 2019. Since inception, we have incurred net losses, used net cash from our operations, and have funded substantially all of our operations through proceeds of the sale of equity securities and convertible notes.

On January 9, 2020, we entered into a Securities Purchase Agreement, or the Purchase Agreement, with certain investors named therein, or the Investors, pursuant to which we agreed to issue and sell, in a registered direct offering by us directly to the Investors, or the January 2020 Registered Direct Offering, (i) an aggregate of 1,189,000 shares of our common stock at an offering price of $3.9825 per share and (ii) an aggregate of 448,800 pre-funded warrants exercisable for shares of our common stock, or the Pre-Funded Warrants, at an offering price of $3.9725 per Pre-Funded Warrant, for gross proceeds of approximately $6.5 million before deducting the placement agent fee and related offering expenses. In a concurrent private placement, we issued to the Investors who participated in the January 2020 Registered Offering warrants exercisable for an aggregate of 818,900 shares of common stock at an exercise price of $3.93 per share. Each warrant is immediately exercisable and will expire five and one-half years from the issuance date. The net proceeds to us from the January 2020 Registered Direct Offering, after deducting placement agent fees and other estimated offering expenses, and excluding the exercise of any warrants, was approximately $6.0 million.

As of March 31, 2020, we had an accumulated deficit of $105.3 million, cash and cash equivalents of $6.7 million, and restricted cash and cash equivalents of $0.1 million. In addition, we had accounts payable and accrued expenses and other current liabilities of $3.6 million as of March 31, 2020. These matters raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of any current or future product candidates in development.

This going concern assumption is based on management’s assessment of the sufficiency of our current and future sources of liquidity, considering whether or not it is probable we will be able to meet our obligations as they become due for at least one year from the date our consolidated financial statements are available to be issued, and if not, whether our liquidation is imminent. Our management believes that our cash and cash equivalents of $6.7 million as of March 31, 2020 will enable us to fund our operating expenses and capital expenditure requirements through the end of 2020. We will require additional financing to fund our operations thereafter and to commercially develop any current or future product candidates. We may be required to delay, scale back or eliminate some or all of our research and development programs and place certain activities on hold, or cease operations if we are unable to raise funds as needed.

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We currently do not have any commitments to obtain additional funds and may be unable to obtain sufficient funding in the future on acceptable terms, if at all. Our management continues to evaluate different strategies to obtain the required funding for future operations. These strategies may include public and private placements of equity and/or debt securities, payments from potential strategic research and development collaborations, and licensing and/or marketing arrangements with pharmaceutical companies. Additionally, we continue to engage in active discussions with global and regional pharmaceutical companies for licensing and/or co-development rights to our pipeline candidates. To the extent that we raise additional capital through the sale of our common stock, the interests of our current stockholders may be diluted. If we issue additional preferred stock or convertible debt securities, it could affect the rights of our common stockholders or reduce the value of our common stock or any outstanding classes of preferred stock. There can be no assurance that these future funding efforts will be successful. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. An extended period of economic disruption could materially affect our access to sources of liquidity and financial condition.

Our future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing transactions discussed above, (ii) our ability to complete revenue-generating partnerships with pharmaceutical companies, (iii) the success of our research and development activities, (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies, and, ultimately, (v) regulatory approval and market acceptance of our proposed future products.

Cash Flows

The following table summarizes our cash flows from operating and financing activities for the three months ended March 31, 2020 and 2019 (amounts in thousands):

	Three Months Ended March 31,
	2020			2019
Net cash (used in) provided by:
Operating activities	$	(6,831	)	$	(4,991	)
Financing activities	6,300			2,230
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	(531	)	$	(2,761	)

Net Cash Flow from Operating Activities

Net cash used in operating activities of $6.8 million during the three months endedMarch 31, 2020 was primarily attributable to our net loss of $4.1 million and the prepayment of certain expenses and payment of certain payables. The net change in our operating assets and liabilities of $2.9 million is primarily attributable to an increase in prepaid expenses of $1.4 million and a $1.6 million decrease in accounts payable and accrued expenses and other current liabilities. The increase in prepaid expenses was primarily from payments of $1.0 million for insurance premiums and $0.4 million for clinical trial expenses related to our Phase 3 REGAL study.

Net cash used in operating activities of $5.0 million during the three months ended March 31, 2019 was primarily attributable to our net loss of $4.5 million. This amount was offset by various net non-cash charges of $0.4 million, which was comprised of $0.4 million increase in the fair value of our contingent consideration liability, $0.2 million increase in stock-based compensation, offset by a gain of $0.2 million from the decrease in the fair value of liability-classified warrants. The net change in our operating assets and liabilities of $0.8 million is primarily attributable to an increase in prepaid expenses of $0.3 million and a $0.5 million decrease in our accounts payable and accrued expenses and other current liabilities.

Net Cash Flow from Financing Activities

We generated $6.3 million of net cash from financing activities for the three months endedMarch 31, 2020. We received $6.0 million in net proceeds from our January 2020 Registered Offering through the sale of securities and $0.3 million from the collection of our stock subscription receivable.

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We generated $2.2 million of net cash from financing activities for the three months ended March 31, 2019 from the exercise of certain common stock warrants.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet financing arrangements as of March 31, 2020.

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 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and our principal financial officer (the “Certifying Officer”), evaluated the effectiveness of our disclosure controls and procedures. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures are also designed to reasonably assure that such information is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure. Based on these evaluations, the Certifying Officers have concluded, that, as of the end of the period covered by this Quarterly Report on Form 10-Q:

(a) our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and

(b) our disclosure controls and procedures were effective to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Exchange Act was accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please refer to Note 6 (Commitments and Contingencies) to our consolidated financial statements contained in Part I, Item 1 (Financial Statements) of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

ITEM 1A. RISK FACTORS

Please refer to our note on forward-looking statements on page 2 of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in our 2019 Annual Report. The risks described in such 2019 Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, operating results and stock price.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit #	Description	Form	Exhibit	Filing Date
3.1	Composite Amended and Restated Certificate of Incorporation of the Registrant (formerly, Galena Biopharma, Inc.) amended as of December 27, 2017	10-K	3.1	April 13, 2018
3.2	Amended and Restated By-Laws of the Registrant	8-K	3.3	January 5, 2018
4.1	Form of Investor Warrant	8-K	4.1	January 9, 2020
4.2	Form of Pre-funded Warrant	8-K	4.2	January 9, 2020
10.1	Amendment to Warrant to Purchase Common Stock dated January 2, 2020	8-K	10.1	January 7, 2020
10.2	Form of Securities Purchase Agreement, dated as of January 9, 2020, by and among SELLAS Life Sciences Group, Inc. and the Investor	8-K	10.1	January 9, 2020
10.3	Employment Agreement by and between SELLAS Life Sciences Group, Inc. and Angelos Stergiou, effective July 1, 2019* **
31.1	Certification of Principal Executive Officer pursuant to Rule13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act, as amended.**
31.2	Certification of Principal Financial Officer pursuant to Rule13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act, as amended.**
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ***
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase.*
101.LAB	XBRL Taxonomy Extension Label Linkbase.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.*

*	Indicates management contract or compensatory plans or arrangements.
**	Filed herewith
***	The certification attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

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

SELLAS Life Sciences Group, Inc.
By:	/s/ Angelos M. Stergiou
	Angelos M. Stergiou, MD, ScD h.c.
	President and Chief Executive Officer
	Date: May 14, 2020

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EX-10.3

Exhibit 10.3

EXECUTION COPY

SELLAS LIFE SCIENCES GROUP, INC.

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of March 21, 2019 by and between SELLAS Life Sciences Group, Inc. (the “Company”) and Angelos Stergiou (“Executive”) (each being a “Party” hereto and together constituting the “Parties”).

WHEREAS, the Company and the Executive previously entered into an Employment Agreement, dated September 1, 2016 (the “Prior Agreement”);

WHEREAS, the Company desires to continue to employ Executive as its President and Chief Executive Officer under the terms and conditions set forth below; and

WHEREAS, the Parties expressly agree and acknowledge that until June 30, 2019, the Executive’s employment shall be governed by the Prior Agreement and that only as of the Effective Date (as defined below) shall the Executive’s employment be governed by this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1. EMPLOYMENT.

A.Employment. The Company hereby agrees to continue to employ Executive and Executive hereby accepts such continued employment with the Company as President and Chief Executive Officer, upon the terms and conditions set forth in this Agreement.

B.Effective Date and Term. The Company’s employment of Executive under this Agreement shall commence effective as of July 1, 2019 (the “Effective Date”) and continue unless terminated earlier pursuant to Section 4 of this Agreement, until the second (2nd) anniversary of the Effective Date (the “Initial Term”). Following the Initial Term, the Executive’s employment shall continue in accordance with the terms and conditions of this Agreement, including, without limitation, Sections 4(1) and 4(J), until terminated by either party pursuant to Section 4. The period of time between the Effective Date and the Date of Termination (as defined below) shall be referred to herein as the “Employment Term.” Except as specifically set forth herein, the Company shall have no other obligation to the Executive. For the sake of clarity, the Company and Executive acknowledge and affirm that until June 30, 2019, the Company’s obligations to the Executive and the Executive’s obligations to the Company shall continue to be governed by the Prior Agreement.

C.Duties of Executive. During the Employment Term, all of the following shall apply: (i) Executive shall carry out, perform and comply with such reasonable and lawful orders, directions, and written rules and policies (including those rules and policies memorialized in meeting minutes) as are assigned or set by Company’s Board of Directors (the “Board”) from time to time; (ii) Executive shall report to, receive directions from and be reviewed by the Board; and (iii) Executive’s duties shall include the duties and responsibilities commonly associated with a Chief Executive Officer of a company similarly situated to the Company.

D.Duty of Loyalty. During the Employment Term: (i) Executive shall devote Executive’s full business time and attention and Executive’s best efforts to the faithful performance of Executive’s duties as an officer and employee of Company; and (ii) Executive shall not, without the prior written consent of the Board, accept other employment nor engage in any other business activity or serve in any industry, trade, professional, governmental or academic position during the term of this Agreement; provided, however, that Executive may participate in charitable activities and passive personal investment activities, provided that such activities do not, individually or in the aggregate: (a) interfere with the performance of the Executive’s duties under this Agreement; (b) conflict with the business interests of the Company or any of its affiliates; or (c) violate this Agreement. The Company acknowledges that Executive’s continuing as a member of the Board of Trustees of Kentucky Wesleyan College is a permitted activity under this Section.

E.Place of Performance. Executive’s principal place of employment during the Employment Term will be in New York, New York. Notwithstanding the foregoing, Executive understands and agrees that Executive’s presence may be required at other Company worksites or Executive may be required to travel for business, in each case, in accordance with Executive’s duties and responsibilities under this Agreement, as business needs require or may change over time and as reasonably requested by the Board.

2.COMPENSATION AND BENEFITS.

In consideration of the services to be rendered by Executive pursuant to this Agreement, as well as Executive’s covenants set forth in this Agreement, Company shall pay to Executive the following compensation, which shall be the entire and exclusive compensation for all of Executive’s services rendered and other obligations taken on Company’s behalf:

A.Annual Base Salary. During the Employment Term, Company shall pay to Executive an annualized base salary of $525,000 (the “Base Salary”), less all legally required applicable taxes, withholdings, and deductions in accordance with applicable laws. The Base Salary will be paid by Company in equal installments according to Company’s customary payroll practices, but in any event not less frequently than monthly. Executive’s Base Salary shall be reviewed periodically by the Company’s Board or the Compensation Committee of the Board (the “Compensation Committee”) if so designated and may be appropriately increased from time to time in the sole discretion of Board or the Compensation Committee, as applicable, and may not be decreased.

B.Incentive Compensation. During the Employment Term, Executive shall be eligible to participate in all short-term and long-term incentive programs established by Company, at such levels as the Board or Compensation Committee determines in its sole discretion. The Executive’s annual short-term incentive opportunity target shall be fifty percent (50%) of the Base Salary (the “Annual Bonus”). The actual amount of such Annual Bonus shall be determined in accordance with the applicable plans based on achievement of Executive and Company performance objectives established in advance by the Board or the Compensation Committee in consultation with the Executive. In order to earn and receive any such Annual Bonus, Executive must be employed by the Company, without having received from or tendered to the Company notice of an anticipated termination (for any reason), as of December 31^st of the calendar year with respect to which such bonus to be paid to Executive is earned. Each such Annual Bonus, if earned, will be paid no later than March 15th of the calendar year following the calendar year in which the applicable services were performed. Payment of an Annual Bonus for any year or other period of time will not give rise to an entitlement or expectation of an Annual Bonus for any other year or other period of time.

C.Equity Compensation. During the Employment Term, Executive shall be eligible to be granted equity in the Company at the sole discretion of the Board or Compensation Committee. The grant of equity award(s) in any year or other period of time will not give rise to an entitlement or expectation of an equity award for any other year or other period of time. The terms and conditions of any such equity award, if any, shall be governed by the applicable award agreements.

D.Welfare and Other Benefit Plans and Programs. During the Employment Term, Executive shall be eligible to participate in the employee retirement and welfare benefit plans and programs made available to Company’s other senior level executives as a group, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of such plans, including but not limited to, life, health and disability plans, and retirement plans and similar or other plans. Nothing in this Agreement or otherwise shall prevent Company from amending or terminating after the Effective Date any retirement, welfare or other employee benefit plans, programs, policies or perquisites from time to time as Company deems appropriate, and Executive’s participation in any such plan, program, policy and perquisite shall be subject to the terms, provisions, rules and regulations thereof.

E.Vacation Days. During the Employment Term, Executive shall be eligible to earn and accrue up to thirty (30) vacation days per calendar year, which days shall accrue proportionally on a month-to-month basis through continued employment with Company. Upon separation from employment (for any reason), Executive shall be paid for any accrued but unused vacation days, unless applicable law requires otherwise. Executive may carry over up to ten (10) unused vacation days per calendar year. If not used, remaining vacation time will be forfeited. Except as set forth in this Agreement, all vacation days shall accrue and be used and compensated in accordance with the Company’s vacation leave policies as in effect from time to time, unless applicable law requires otherwise.

F.Reimbursement of Expenses. During the Employment Term, Company shall reimburse Executive for all reasonable and necessary business expenses that Executive incurs while performing Executive’s duties under this Agreement in accordance with Company’s general policies of expense reimbursement in effect from time to time.

G.Immigration. The Company agrees to use its reasonable best efforts in accordance with applicable law to support Executive’s L1 Visa application, petition, and/or conversion to/for a Green Card (a/k/a Permanent Resident Card), the cost of which will be fully borne by the Executive.

3.COMPANY POLICIES AND PROCEDURES.

Executive agrees to observe and comply with the reasonable and lawful policies and procedures of Company as adopted by the Board in writing, respecting performance of Executive’s duties and to carry out and to perform the reasonable and lawful orders and directions stated by Company to Executive, from time to time, either orally or in writing. Executive agrees that Executive will be subject to any written compensation clawback, recoupment and anti-hedging policies that may be applicable to executives of the Company generally, as in effect from time to time and as approved by the Board or a duly authorized committee thereof.

4.TERM & TERMINATION.

A.Definitions. For purposes of this Agreement:

(1)Executive’s employment will have been terminated by Company with “Cause” if the termination arises from a determination by the Board that: (a) Executive is convicted of (or pleads guilty or nolo contendere to) a crime constituting a misdemeanor involving dishonesty or moral turpitude or any crime constituting a felony; (b) Executive’s misappropriation or embezzlement of the property of the Company (whether or not a misdemeanor or felony); (c) Executive commits a material act of dishonesty or otherwise engages in or is guilty of gross negligence or willful misconduct in the performance of Executive’s duties having the effect of materially injuring (whether financially or otherwise) the business or reputation of the Company; (d) Executive materially breaches the provisions of any written non-competition, non-disclosure or non-solicitation agreement, company policy, or any other agreement in effect with Company, including without limitation the provisions of this Agreement or Company’s applicable written code of business conduct and compliance policies; or (e) Executive neglects, refuses or fails to perform Executive’s material duties hereunder, other than a failure resulting from Executive’s incapacity due to physical or mental illness; provided, however, Executive shall have thirty (30) days following Company’s written notification specifying a condition under clause (c), (d) or (e) constituting “Cause” to cure such condition (to the extent the condition is curable as reasonably determined by the Board).

(2)Executive’s employment shall have been terminated by Company “without Cause” if such termination is by the Company and: (a) not with “Cause”; (b) not as a result of Executive’s death; and (c) not as a result of Executive suffering a Total Disability.

(3)Executive shall have suffered a “Total Disability” if: (a) Executive is granted long-term disability benefits under Company’s long-term disability plan; or (b) Executive becomes physically or mentally disabled so that Executive is unable to perform the essential functions of Executive’s job, with or without reasonable accommodation in accordance with the Americans with Disabilities Act and its amendments, for a period of either ninety (90) consecutive days or one-hundred and eighty (180) non-consecutive days during any period of three-hundred and sixty-five (365) calendar days.

(4)Executive shall have terminated Executive’s employment for “Good Reason” if Executive terminates Executive’s employment on account of the occurrence of one or more of the following without Executive’s consent: (i) a material diminution by Company of Executive’s authority, duties or responsibilities, other than a diminution of authority, duties or responsibilities during a thirty (30) day cure period following Company’s written notification of a condition constituting “Cause,” temporarily while Executive is physically or mentally incapacitated, or otherwise as required by applicable law; (ii) a material diminution in Executive’s Base Salary which is not the result of an across the board reduction in base salaries of other senior executives of Company; (iii) reassigns the Executive’s principal place of employment to a location that is more than fifty (50) miles from the Executive’s principal place of employment set forth in Section 1(E); and (iv) any action or inaction that constitutes a material breach by Company of this Agreement, including the material failure of Company to pay any amounts due under Section 2. Executive must provide written Notice of Termination for Good Reason to the Company within ninety (90) days after the event constituting Good Reason. Company shall then have a period of thirty (30) days in which it may correct the act or failure to act that constitutes the grounds for Good Reason as set forth in Executive’s notification. If Company does not correct that act or failure to act, then in order for the termination to be considered a Good Reason termination, Executive must provide a Second Notice of Termination which is dated is at least thirty (30) days, but no more than ninety (90) days after the first Notice of Termination.

B.Notice of Termination and Date of Termination. Either Party must give written notice to the other of the intent to terminate this Agreement and Executive’s employment hereunder (“Notice of Termination”). The Notice of Termination must specify the effective date of termination of employment (“Date of Termination”), which shall incorporate any period of notice required by this Section 4, which notice periods) may, in the Company’s sole discretion, be waived in whole or in part, provided that the Company pays Executive his Base Salary and any other accrued obligation owed to Executive during the notice period.

C.Executive’s Death or Total Disability. Executive’s employment under this Agreement shall terminate upon the date of Executive’s death. If, during the Employment Term, Executive suffers a Total Disability then Company may terminate Executive’s employment under this Agreement by giving Executive a Notice of Termination specifying the Date of Termination. Upon such termination due to death or Total Disability, Company shall pay to Executive or Executive’s estate (i) any Base Salary that has fully accrued but not been paid as of the effective date of such termination, any earned, but unpaid Annual Bonus, as well as any vested and accrued employment benefits subject to the terms of any applicable employment benefit arrangements and applicable law (“Accrued Benefits”); (ii) a prorated bonus for the year in which Executive’s death or Disability occurs (if applicable); and (iii) all other payments and benefits to which Executive is entitled under the terms of any applicable compensation arrangement or benefit, equity or perquisite plan or program or grant or this Agreement, including, but not limited to, any applicable insurance benefits. All other rights and benefits of Executive and Executive’s dependents hereunder shall terminate upon such termination, except for any right to the continuation of benefits otherwise provided by law.

D.By Company with Cause. The Company may terminate with Cause hereunder at any time. In order to terminate Executive’s employment hereunder with Cause, Company must give Notice of Termination to Executive specifying the events or circumstances constituting Cause and the Date of Termination, which may be the same date as the date of the Notice of Termination. Upon termination with Cause, Company shall pay to Executive all Accrued Benefits. All other rights and benefits of Executive hereunder shall terminate upon such termination, except for any right to the continuation of benefits otherwise provided by law.

E.By Executive without Good Reason. Executive may terminate Executive’s employment without Good Reason

at any time by giving Company Notice of Termination at least ninety (90) days prior to the Date of Termination designated by Executive; provided, however, that the Company may reduce or eliminate any notice period required under this Section at its discretion, without any further obligation or payment to Executive. Upon termination of Executive’s employment by Executive without Good Reason, Company shall pay to Executive all Accrued Benefits. All other rights and benefits of Executive hereunder shall terminate upon such termination, except for any right to the continuation of benefits otherwise provided by law.

F.Without Cause by Company. Company may terminate Executive’s employment at any time without Cause by giving Executive a Notice of Termination at least thirty (30) days prior to the Date of Termination.

G.Cooperation after Notice of Termination. Following any Notice of Termination by either Company or Executive, Executive, if requested by Company, shall reasonably cooperate with Company in all matters relating to the winding up of Executive’s pending work on behalf of Company and the orderly transfer of any such pending work to other employees of Company as may be reasonably designated by Company following the Notice of Termination. Executive shall not receive any additional compensation during the Employment Term, other than Executive’s Base Salary, for any services that Executive renders as provided in this Section 4(G). For each day that Executive performs services under this Section 4(G) after the Employment Term, Executive shall be reimbursed for Executive’s reasonable out-of-pocket expenses.

H.Surrender of Records and Property. Upon termination of employment, Executive shall promptly turn-over or deliver to the Company all property of the Company Group (as that term is defined below) in Executive’s possession, custody, or control, including without limitation thereto: records (paper and electronic), files (paper and electronic), documents (paper and electronic), electronic mail (e-mail) on Company Group accounts, letters, financial information, memoranda, notes, notebooks, contracts, project manuals, specifications, reports, data, tables, calculations, data, electronic information, and computer disks, in all cases whether or not such property constitutes Confidential Information (as defined below), and all copies thereof; all keys to motor vehicles, offices or other property of Company Group; and all computers, cellular phones and other property of Company Group. If any of the foregoing property of Company Group is electronically stored on a computer or other storage medium owned by Executive or a friend, family member or agent of Executive, such information shall be copied onto a computer disk to be delivered to Company together with a written statement of Executive that the information has been deleted from such person’s computer or other storage medium.

I.Severance. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason other than in accordance with Section 4(J), the Company will (the “Severance Benefits”): (a) pay Executive the following amounts in equal installments over the twelve (12) month period following the Payment Commencement Date (as hereinafter defined): (i) an amount equal to eighteen (18) months of Executive’s then-current Base Salary, less standard employment-related withholdings and deductions and (ii) an amount equal to a pro-rated portion of Executive’s annual short-term incentive compensation at Executive’s target level (“Target Bonus”) for the year in which Executive’s employment terminates, without regard to whether the performance goals with respect to such Target Bonus have been established or met and less standard employment-related withholdings and deductions; and (b) provided Executive elects to continue Executive’s and Executive’s eligible dependents’ participation in the Company’s medical and dental benefit plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”), reimburse Executive for the monthly premium to continue such coverage until the earlier of (x) the last calendar day of the eighteen (18) month anniversary following the month in which the Date of Termination occurs and (y) the end of the calendar month in which Executive becomes eligible to receive group health plan coverage under another employee benefit plan. Notwithstanding the foregoing, if the reimbursement of monthly premiums would otherwise violate the nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010 or Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”), these payments shall be treated as taxable payments to Executive and Executive shall be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Act or Section 105(h).

J.Change in Control Severance. If Executive’s employment is terminated within one (1) month period to or one (1) year following a Change in Control Event (as defined in the Company’s 2017 Stock Incentive Plan), by the Company, or its successor, without Cause or by Executive for Good Reason, the Company or its successor will (the “CIC Severance Benefits”): (i) pay Executive the following amounts in equal installments over the twelve (12) month period following the Payment Commencement Date: (A) an amount equal to twenty-four (24) months of Executive’s then-current Base Salary, less standard employment-related withholdings and deductions; and (B) an amount equal to one and one-half (1.5) times Executive’s Target Bonus for the year in which Executive’s employment terminates, without regard to whether the performance goals with respect to such Target Bonus have been established or met and less standard employment-related withholdings and deductions; (ii) provided Executive elects to continue Executive’s and Executive’s eligible dependents’ participation in the Company’s medical and dental benefit plans pursuant to COBRA, reimburse Executive for the monthly premium to continue such coverage until the earlier of (x) the eighteen (18) month anniversary of the Date of Termination and (y) the end of the calendar month in which Executive becomes eligible to receive group health plan coverage under another employee benefit plan; and (iii) provide that the then-unvested portion of any equity awards held by Executive shall immediately vest in full and become exercisable or free from forfeiture or repurchase, as applicable, as of the Date of Termination. Notwithstanding the foregoing, if the reimbursement of monthly premiums would otherwise violate the nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010

or Section 105(h) of the Code, these payments shall be treated as taxable payments to Executive and Executive shall be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Act or Section 105(h). For the avoidance of doubt, if Executive is eligible to receive CIC Severance Benefits Executive shall not receive any Severance Benefits.

K.Release Requirement. The Severance Benefits or CIC Severance Benefits, as applicable, are conditional upon: (i) Executive’s returning to the Company all Company property; (ii) Executive’s continued compliance with this Agreement and any other agreement with the Company and its affiliates, including without limitation any cooperation and restrictive covenant provisions contained therein; (iii) Executive’s delivering to the Company and making effective a release agreement in a form to be provided by the Company (the “Release”) (which will not include any post-employment restrictive covenants which are any more onerous to Executive than as provided under this Agreement); and (iv) such Release becoming binding and enforceable within sixty (60) days following the Date of Termination (such sixtieth (60th) days, the “Payment Commencement Date”); provided however, that if the sixtieth (60th) day following the Date of Termination occurs in the next calendar year following the Date of Termination, then the Payment Commencement Date shall be no earlier than January 1 of such following calendar year.

5.INTELLECTUAL PROPERTY.

A.Intellectual Property. During the Employment Term, Executive will be expected to perform duties which may lead to the creation of intellectual property including technologies, procedures, discoveries, methodologies, developments, designs, improvements, inventions, formulae, techniques, strategies, compilations of information, form and content of data, drawings, models, equipment, results of research proposals, reports, data such as those relating to, but not limited to, chemical, biological, pharmaceutical, experimental and clinical trials or procedures, customer lists, business and/or financial information, works of authorship, mask works, know-how whether or not patentable or registerable under patent, copyright, or similar statutes, generated, conceived, made, or reduced to practice in whole or in part by Executive, either alone or jointly with others. Intellectual Property includes without limitation all (i) issued United States and foreign patents, utility models, and the like, and applications pending before any relevant authority worldwide, including any additions, continuations, continuations-in-part, divisions, reissues, renewals, or extensions based thereon; (ii) copyrights and other rights in works of authorship; (iii) trade secrets; and (iv) any other intellectual property rights in existence at the date of this Agreement (collectively, hereinafter “Intellectual Property”).

B.Assignment. Executive hereby irrevocably assigns and transfers to Company all right, title and interest in and to Intellectual Property worldwide, and agrees that Company shall be the sole owner of all Intellectual Property generated, conceived, developed, made, or reduced to practice, in whole or in part, by Executive either alone or jointly with others, whether during working hours or at any other time during Executive’s employment with Company (including prior to, during and after the Employment Term), whether at the request or upon the suggestion of Company, results from tasks assigned to Executive by Company, results from the use of Company premises or property (including but not limited to equipment, software, firmware, supplies or facilities owned, leased, licensed or contracted by Company), or otherwise, which are useful in, or directly or indirectly related to Company’s business or any contemplated business of Company, or which relate to, or are generated, conceived, developed, made, reduced to practice, in whole or in part during the course of, Executive’s employment, or which are developed or made from, or by reason of knowledge gained from, such employment. Executive is not required to assign any developments that Executive developed entirely on his own time without using the Company’s equipment, supplies, facilities, trade secrets, or Intellectual Property, except for those developments that either (i) relate to the Company’s actual or anticipated business, research or development, or (ii) result from or are connected with work performed by Executive for the Company. In addition, this Agreement does not apply to any developments that qualify fully for protection from assignment to the Company under any applicable law, regulation, rule, or public policy.

C.Work for Hire. Executive acknowledges and agrees that all works of authorship he creates, whether alone or jointly with others, during the period of employment with the Company Group (as that term is defined below) (including prior to, during and after the Employment Term) other than those developed entirely on his own time without using the Company’s equipment, supplies, facilities, trade secrets, or Intellectual Property, shall be deemed a “work-for-hire” as defined by the United States Copyright Act and is owned by Company. If for any reason the work would not be considered a work made for hire under applicable law, the Executive hereby sells, assigns, and transfers to the Company, as well as to its successors and assigns, the entire right, title and interest in and to the copyright in the work and any registrations and copyright applications relating thereto and any renewals and extensions thereof, and in and to all works based upon, derived from, or incorporating the work throughout the world. Developments, if any, patented or unpatented, which Executive made prior to the commencement of his employment with the Company are excluded from the scope of this Agreement. If, in the course of his employment with the Company, Executive incorporates a prior development into a Company product, process or machine, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sub-licensees) to make, have made, modify, use and sell such prior developments. Notwithstanding the foregoing, Executive agrees that he will not incorporate, or permit to be incorporated, his prior developments in any Company developments without the Company’s prior written consent.

D.Continuing Obligations. Executive agrees to disclose promptly all technologies, procedures, discoveries, methodologies, developments, designs, improvements, inventions, formulae, techniques, strategies, compilations of information, form and content of data, drawings, models, equipment, results of research proposals, reports, data such as those relating to, but

not limited to, chemical, biological, pharmaceutical, experimental and clinical trials or procedures, customer lists, business and/or financial information, works of authorship, mask works, know-how conceive, developed, made, or reduced to practice, in whole or in part, by Executive (alone or with others) to which Company is entitled to as provided herein, and agrees not to disclose such Intellectual Property to others except as required by law or as is reasonably necessary or appropriate in connection with the performance of Executive’s duties as an employee and officer of Company, without the express written consent of Company. Executive further agrees to maintain accurate and complete records, to create other written documentation as is necessary and appropriate to document the creation of any Intellectual Property. Executive promptly shall execute and deliver to the Company any instruments deemed necessary by it to effect disclosure and assignment of all Inventions to the Company including, without limitation, assignment agreements satisfactory to the Company. Upon request of the Company, during and after Executive’s employment with the Company, Executive shall execute patent, copyright, trademark, mask work or other applications and any other instruments deemed necessary by the Company for the prosecution of such patent applications or the acquisition of patent letters or registration of copyrights, trademarks or mask works in the United States and foreign countries based on such Inventions. It is understood that all expenses in connection with such trademarks, copyrights or patents, and all applications related thereto, shall be borne by Company, however Company is under no obligation to protect such Intellectual Property, except at its own discretion and to such extent as Company shall deem desirable. Executive shall not receive any additional compensation during the Employment Term, other than Executive’s Base Salary, for any services that Executive renders as herein provided. For each day that Executive performs services under this Section 5(D) after the Employment Term, Executive shall be reimbursed for his reasonable out-of-pocket expenses.

6.CONFIDENTIAL INFORMATION.

A.Confidential Information. The term “Confidential information” means all information related to the business of the Company, or its parent company(ies), subsidiaries, affiliates, and/or other related entities, including but not limited to Sellas Life Sciences Group AG and its direct or indirect affiliates and subsidiaries and any entities that it directly or indirectly controls, whether existing as of the Effective Date or at any time in the past or future (collectively, as the term is used throughout this Agreement, the “Company Group”), which information exists or existed, or is or was developed, at any time while Executive is or was an employee, consultant, independent contractor, officer and/or director of the Company Group (including prior to, during and after the Employment Term), including without limitation: (i) strategic and development plans, financial information, equity investors, business plans, co-developer identities, business relationships, business records, project records, market reports, information relating to processes and techniques, technology, research, data, development, trade secrets, know-how, discoveries, ideas, concepts, specifications, diagrams, inventions, technical and statistical data, designs, drawings, models, flow charts, engineering products, invention disclosures, patent applications, chemical and molecular structures, synthetic pathways, biological data, safety data, clinical data, developmental data, development route, manufacturing processes, synthetic techniques, analytical data, Work Product, and any and all other proprietary and sensitive information, disclosed or learned, whether oral, written, graphic or machine-readable, whether or not marked confidential or proprietary, whether or not patentable, whether or not copyrightable, including the manner and results in which any such Confidential Information may be combined with other information or synthesized or used by the Company Group, which could prove beneficial in enabling a competitor to compete with the Company Group; or (ii) information that satisfies the definition of a “Trade Secret” as that term is defined in the Delaware Uniform Trade Secrets Act, Title 6 Section 2001, as amended from time to time; provided, however, that information that is in the public domain (other than as a result of a breach by Executive of this Section 6), approved for release by Company, or lawfully obtained from a third party who is not known by Executive (after Executive’s reasonable inquiry) to be bound by a confidentiality agreement with Company and general information, knowledge and skill that Executive may have learned in the course of similar employment or work elsewhere in the Company’s industry is not Confidential Information.

B.Acknowledgements. Executive acknowledges and agrees that: (1) Executive’s position with Company is one of high trust and confidence; (2) the Confidential Information constitutes a valuable, special and unique asset which Company uses to obtain a competitive advantage over its competitors; (3) Executive’s protection of such Confidential Information against unauthorized use or disclosure is critically important to Company in maintaining its competitive advantage; (4) all Confidential Information is the property of the Company Group,’ and (5) Executive shall acquire no right, title or interest in, to or under any such Confidential Information.

C.Nondisclosure. Executive promises that Executive will never (before, during or after the Employment Term): (1) disclose any Confidential Information to any person other than (i) an officer or director of Company or (ii) any other person who is bound by nondisclosure restrictive covenants to Company and to whom disclosure of such Confidential Information is reasonably necessary or appropriate in connection with performance by Executive of Executive’s duties as an employee and officer of Company; or (2) use any Confidential Information except to the extent it is reasonably necessary or appropriate in connection with performance by Executive of Executive’s duties as an employee and officer of Company. Executive promises to take all reasonable precautions to prevent the inadvertent or accidental disclosure or misuse of any Confidential Information. In the event Executive receives a request to disclose all or any part of the Confidential Information under the terms of a subpoena or order issued by a court or governmental body, Executive promises, to the extent permissible by law, to (a) notify Company immediately of the existence, terms and circumstances surrounding such request, (b) consult with Company on the advisability of taking legally available steps to resist or narrow such request, (c) if disclosure is required, furnish only such portion of the Confidential Information

as Executive is legally compelled to disclose, and (d) exercise Executive’s best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the disclosed Confidential Information. Notwithstanding the foregoing, nothing in this Agreement shall be construed as, or shall interfere with, abridge, limit, restrain, or restrict Executive’s (or his attorney’s) right, without prior authorization from or notification to the Company Group: (i) to communicate with any federal, state, or local government agency charged with the enforcement and/or investigation of claims of discrimination, harassment, retaliation, improper wage payments, or any other unlawful employment practices under federal, state, or local law, or to file a charge, claim, or complaint with, or participate in or cooperate with any investigation or proceeding conducted by, any such agency; (ii) to report possible violations of federal, state, or local law or regulation to any government agency or entity, including but not limited, to the extent applicable, to the U.S. Department of Labor, the Department of Justice, the Securities and Exchange Commission (the “SEC”), the Congress, and/or any agency Inspector General, or make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (iii) to communicate directly with, respond to any inquiry from, or provide testimony before, to the extent applicable, the SEC, the Financial Industry Regulatory Authority, any other self-regulatory organization, or any other federal, state, or local regulatory authority, regarding this Agreement or its underlying facts or circumstances. In addition, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, in the event that Executive files a lawsuit for retaliation by the Company Group for reporting a suspected violation of law, Executive may disclose the trade secret to his attorney and use the trade secret information in the court proceeding, if Executive: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

7.NONCOMPETITION.

A.Restricted Period. As used in this Agreement, the term “Restricted Period” means throughout the Executive’s employment with the Company and continuing until the end of the twelve (12) month period following the date on which Executive’s employment with Company is terminated for any reason.

B.Prohibition on Competition. Executive hereby covenants and agrees that, until the expiration of the Restricted Period, Executive will not serve as an officer, director, employee, independent contractor, consultant, agent, or otherwise provide services to, or have any ownership interest in, any entity which engages in any activities anywhere in the world concerning WT1/HER2 peptide vaccines for the treatment of cancer. If a court of competent jurisdiction finds this non-competition provision invalid or unenforceable due to unreasonableness in time, geographic scope, or scope of the Company Group’s business, then Executive agrees that such court shall interpret and enforce this provision to the maximum extent that such court deems reasonable.

C.Exceptions. Executive’s ownership of less than 5% of the stock of a company that is competitive with the activities of the Company Group as described in Section 7(B) and listed on a national securities exchange shall not be deemed to violate the prohibitions of Section 7(B). Also, Executive shall not be considered to have violated Section 7(B) with respect to the purchasing entity if there is a sale and Executive becomes an employee, officer, director or shareholder of the purchasing entity.

8.NONSOLICITATION.

A.Of Employees. Until the expiration of the Restricted Period, Executive shall not, directly or indirectly, either on Executive’s own account or for any other person or entity: (a) employ, solicit, induce, advise, or otherwise convince, interfere with the Company Group’s employment of, or offer employment to, any employee of the Company Group; (b) employ or otherwise interfere with the Company Group’s engagement with, or offer employment to, any consultant of Company with whom the Executive had material dealings or material knowledge of; or (c) induce or attempt to induce any such employee or consultant to breach their employment agreement or relationship or consulting agreement or relationship with the Company Group; provided, however, that Executive shall not be in breach of this provision if any such employee or consultant, without inducement or solicitation by Executive, applies for employment at Executive’s subsequent employer in response to a general advertisement soliciting employment.

B.Of Clients. Until the expiration of the Restricted Period, Executive shall not, directly or indirectly, either on Executive’s own account or for any other person or entity: (i) solicit, invite, induce, cause, or encourage to alter or terminate his, her, or its business relationship with the Company Group, any client, customer, supplier, vendor, licensee, licensor, or other person or entity that, at any time during Executive’s employment with the Company Group, had a business relationship with the Company Group, or any person or entity whose business the Company Group was soliciting or attempting to solicit at the time of Executive’s termination; (ii) solicit, entice, attempt to solicit or entice, or accept business (which is substantially related to the business of the Company) from any such client, customer, supplier, vendor, licensee, licensor, person, or entity; or (iii) interfere or attempt to interfere with any aspect of the business relationship between the Company Group and any such client, customer, supplier, vendor, licensee, licensor, person, or entity.

C.For purposes of and as it is referenced in this Section 8 of the Agreement only, Executive’s period of employment with the Company shall be deemed to encompass any period, including before the Employment Term, during which Executive is or was an employee, consultant, independent contractor, officer and/or director of the Company Group.

9.REASONABLENESS OF RESTRICTIONS; REMEDIES.

Executive has carefully read and considered the restrictive covenants set forth in Sections 6-8 hereof, and understands Executive’s obligations thereunder, the limitations such obligations will impose upon Executive after termination of Executive’s employment with Company. Executive has had full opportunity to review this Agreement with an attorney of his choosing, and Company has hereby advised him to do so, specifically Sections 6-8, before executing the Agreement. Executive agrees that, as a result of Executive’s position with Company, the length of the Restricted Period and each restriction set forth in Sections 6-8 herein are (1) fair and reasonable, (2) reasonably required for the protection of the legitimate business interests and goodwill established by Company, (3) fair and reasonable in that Company’s agreement to employ Executive, and a portion of the compensation to be paid to Executive hereunder, are in consideration for such covenants and Executive’s continued compliance therewith, and constitute adequate and sufficient consideration for such covenants, and (4) not overly broad or unduly burdensome to Executive, either in geographic or temporal scope. Executive acknowledges that Executive’s compliance with Executive’s obligations and restrictive covenants set forth in this Agreement is necessary to protect the business and goodwill of Company. Executive agrees that Executive’s breach of Executive’s obligations and/or restrictive covenants under this Agreement may irreparably and continually damage Company, for which money damages may not be adequate. Consequently, Executive agrees that in the event that Executive breaches or threatens to breach any of the obligations and/or restrictive covenants contained herein, Company shall be entitled to: (a) seek injunctive relief to prevent or halt Executive from breaching this Agreement; and (b) money damages as determined by a court of competent jurisdiction. Executive hereby agrees that injunctive relief may be granted by a court of competent jurisdiction without the necessity of Company to post bond, or if required to post bond, Executive agrees that the lowest amount permitted shall be adequate. Nothing in this Agreement shall be construed to prohibit Company from pursuing any other remedy available or from seeking to enforce any restrictive covenants to a lesser extent than set forth herein. The Parties agree that all remedies shall be cumulative. Each party is responsible for its own costs and expenses, including attorneys’ fees.

10. NO PRIOR RESTRICTIONS.

Executive hereby represents and warrants to Company that the execution, delivery, and performance by Executive of Executive’s duties under this Agreement do not violate any provision of any agreement or restrictive covenant which Executive has with any former employer or any other entity. Executive further agrees to honor and inform Company of any and all post-employment obligations Executive has to any former employer or any other entity with which Executive has or had a business relationship.

11. SECTION 409A.

A.The intent of the Parties is that payments and benefits under this Agreement comply with, or be exempt from, Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”). Accordingly, if any provision of this Agreement is ambiguous, such that one interpretation would subject a payment or benefit to the excise tax imposed by Code Section 409A and an alternative interpretation would not so subject the payment or benefit, the Parties intend the interpretation that would not so subject the payment or benefit to apply.

B.With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that this clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(a) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.

C.For purposes of Code Section 409A, each payment hereunder shall be treated as a separate payment and Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that is considered nonqualified deferred compensation.

D.Termination of employment and similar terms as used herein shall mean separation from service within the meaning of Code Section 409A. In the event at the time of any separation from service Executive is a “specified employee” within the meaning of Code Section 409A, any deferred compensation subject to Code Section 409A payable as a result of such termination shall not be paid prior to the earlier of six (6) months after such termination and Executive’s death and shall be paid immediately thereafter.

E.In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Code Section 409A.

12.SECTION 280G.

A.To the extent that any payment, benefit or distribution of any type to or for Executive’s benefit by the Company

or any of its affiliates, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (including, without limitation, any accelerated vesting of stock options or other equity-based awards) (collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code, but only if the Total Payments so reduced result in Executive receiving a net after tax amount that exceeds the net after tax amount Executive would receive if the Total Payments were not reduced and were instead subject to the excise tax imposed on excess parachute payments by Section 4999 of the Code. Unless Executive shall have given prior written notice to the Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Total Payments. The preceding provisions of this Section shall take precedence over the provisions of any other plan, arrangement or agreement governing Executive’s rights and entitlements to any benefits or compensation.

B.If the Total Payments to Executive are reduced in accordance with Section 12(A), as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial reduction under Section 12(A), it is possible that Total Payments to Executive which will not have been made by the Company should have been made (“Underpayment”) or that Total Payments to Executive which were made should not have been made (“Overpayment”). If an Underpayment has occurred, the amount of any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. In the event of an Overpayment, then Executive shall promptly repay to the Company the amount of any such Overpayment together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor thereto), from the date the reimbursable payment was received by Executive to the date the same is repaid to the Company.

13.ARBITRATION.

A.This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to any conflicts of laws principles thereof that would give effect to the laws of another jurisdiction), and any dispute or controversy arising out of or relating to this Agreement, other than injunctive relief, will be settled exclusively by arbitration, conducted before a single arbitrator in New York, New York in accordance with, and pursuant to, the Employment Arbitration Rules and Procedures of JAMS ( “JAMS”), a copy of which rules, which are available at http://www.jamsadr.com/rules-employment-arbitration/, have been reviewed by Executive in their current form. The arbitrator shall have the power to take interim measures, and to rule on such arbitrator’s own jurisdiction, including on any objections with respect to the existence, scope or validity of this arbitration clause.

B.The arbitration shall be conducted on a strictly confidential basis, and neither party shall disclose the existence of a claim, the nature of a claim, any documents, exhibits, or information exchanged or presented in connection with such a claim, or the result of any action (collectively, “Arbitration Materials”), to any third party, except as required by law, with the sole exception of their legal counsel and parties engaged by that counsel to assist in the arbitration process, who also shall be bound by these confidentiality terms. The arbitrator shall be authorized to issue any award, relief or other remedy which a court of competent jurisdiction would be entitled to issue. The Parties shall have the right to conduct discovery, including through depositions, interrogatories, requests for documents, and requests for admission. The arbitrator shall issue a written decision, which decision shall include a statement of the essential findings and conclusions on which any arbitral award is based. The decision of the arbitrator will be final and binding upon the parties hereto. Any arbitral award may be entered as a judgment or order in any court of competent jurisdiction. Either party may commence litigation in court to obtain injunctive relief in aid of arbitration, to compel arbitration, or to confirm or vacate an award, to the extent authorized by the Federal Arbitration Act or applicable state law. The Company shall pay the JAMS administrative fees and the arbitrator’s fee and expenses. Each Party will pay its own attorneys’ fees; provided, however, that if Executive is the prevailing party, the Company shall pay Executive’s attorneys’ fees. Executive and the Company each agree that any arbitration will be conducted only on an individual basis and that no dispute between the parties relating to this Agreement may be consolidated or joined with a dispute between any other employee and the Company or any of its affiliates, nor may Executive seek to bring Executive’s dispute on behalf of other employees, independent contractors or consultants of the Company or any of its affiliates as a class or collective action. The parties agree to take all steps necessary to protect the confidentiality of the Arbitration Materials in connection with any such proceeding and agree to the entry of an appropriate protective order encompassing the confidentiality terms of this Agreement.

C.TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EXECUTIVE AND THE COMPANY HEREBY WAIVE AND COVENANT THAT EXECUTIVE AND THE COMPANY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY, WHETHER NOW OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREE THAT ANY OF THE COMPANY OR ANY OF ITS AFFILIATES OR EXECUTIVE MAY FILE

A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE COMPANY AND ITS AFFILIATES, ON THE ONE HAND, AND EXECUTIVE, ON THE OTHER HAND, IRREVOCABLY TO WAIVE THE RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN SUCH PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THAT ANY PROCEEDING PROPERLY HEARD BY A COURT UNDER THIS AGREEMENT WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

14.NOTICES.

Any notice or communication required or permitted to be given hereunder may be delivered by hand, deposited with an overnight courier, sent by confirmed email, confirmed facsimile, or mailed by registered or certified mail, return receipt requested, postage prepaid, in the case of Company, addressed to Company’s principal office marked attention to the Chairman of the Board, and in the case of Executive, addressed to Executive’s personal address as appearing in Company’s payroll records, and in each case to such other mail address, email address, or facsimile number as may hereafter be furnished in writing by either Party to the other Party. Such notice will be deemed to have been given as of the date it is hand delivered, emailed, faxed or three days after deposit in the U.S. Mail.

15. LIKENESS.

Executive hereby grants to Company a license to use, without further compensation or approval from Executive, Executive’s name, image, portrait, voice, likeness and all other rights of publicity, or any derivative or modification thereto that Company may create, in any and all mediums, now known or hereafter developed, provided that such use is in relation to Company’s business and consistent with professional business standards, and does not disparage or denigrate Executive.

16. INDEMNIFICATION; LIABILITY INSURANCE.

Company shall indemnify and hold Executive harmless to the fullest extent permitted by applicable law in effect at the time this provision is implicated against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including advancement of reasonable attorneys’ fees), losses, and damages resulting from Executive’s good-faith performance, within the scope of his employment, of Executive’s duties and obligations with Company. The Company agrees to maintain insurance policies generally for the benefit of officers and directors of Company and Executive will be entitled to be covered thereunder, both during and, while potential liability exists, by and pursuant to the terms of any such policy against all costs, charges and expenses incurred in connection with any action, suit or proceeding to which Executive may be made a party by reason of being an officer or director of Company in the same amount and to the same extent as Company covers its other officers and directors. These obligations shall survive the termination of Executive’s employment with Company. Notwithstanding anything else in this provision, to be indemnified, Executive’s actions must not be intentionally wrongful acts, intentionally unlawful acts of gross negligence, and/or acts in violation of this Agreement.

17. GENERAL PROVISIONS.

A.Successors and Assigns. The rights and obligations under Sections 5, 6, 7 and 8 of this Agreement shall survive the termination of Executive’s services to Company in any capacity and shall inure to the benefit and shall be binding upon Executive’s heirs and personal representatives. Executive’s duties and obligations are personal in nature and Executive may not assign or delegate any duties under this Agreement without Company’s prior written approval. As used in this Agreement, “Company” shall mean Company and any such successor which assumes and agrees to perform the duties and obligations of Company under this Agreement by operation of law or otherwise.

B.Survival of Certain Terms. The terms, conditions and covenants set forth in this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of Executive’s employment, including, without limitation, Sections 5-8, shall survive the termination of this Agreement and Company’s employment of Executive hereunder, and the Parties shall remain bound by such terms, conditions and covenants.

C.Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the procedural and substantive laws of State of New York, without regard to its conflict of law provisions. The litigation of any disputes arising out of this Agreement shall take place in New York, New York. Notwithstanding the foregoing, should Executive refuse to comply with an order or judgment of such court, then Company may enforce this Agreement and the order or judgment of such court in any jurisdiction it deems appropriate.

D.Severability, Reform. If any provision of this Agreement is determined to be void, invalid or unenforceable, the remainder shall be unaffected and shall be enforceable as if the void, invalid or unenforceable part was not a provision of the Agreement.

E.Entire Agreement. This Agreement contains the entire understanding of the Parties and supersede and replace all former agreements or understandings, oral or written, between the Company Group and Executive, regarding the subject matter

hereof, including, without limitation, the Prior Agreement. For the avoidance of doubt, and without limitation of the foregoing, the Parties acknowledge and agree that: (a) all prior agreements, contracts, and/or understandings, including all exhibits and schedules annexed thereto, between Executive and the Company Group regarding Executive’s compensation, benefits, and/or equity, and/or obligations to the Company Group, during any prior consultancy or employment with the Company Group, including, without limitation, the Prior Agreement, are hereby superseded, cancelled, and rendered null and void immediately upon the Effective Date; (b) as of the date hereof, no amounts are due or owing to Executive under any such prior agreement, contract, and/or understanding, including, without limitation, the Prior Agreement; and (c) based on the Parties actual knowledge as of the date hereof, neither Party is aware of any claim it may have against the other Party.

F.Modification and Waiver. This Agreement may not be amended except by a written instrument signed by both Parties which specifically refers to the particular provision or provisions being amended. No provision of this Agreement may be waived except in a written instrument that specifically refers to the particular provision or provisions being waived and is signed by the Party against whom the waiver is being asserted. No waiver by any Party of any right, power or privilege hereunder shall constitute a waiver of any other right, power or privilege hereunder, and no waiver by any Party of any breach of a provision hereunder shall constitute a waiver of any other breach of that or any other provision of this Agreement. Neither email correspondence, text messages, nor any other electronic communications constitutes a written instrument for purposes of this Section 17(F).

G.Taxes; Withholding. All compensation and benefits payable to Executive under this Agreement shall be subject to all income and other employment tax withholding and reporting required by federal, state or local law with respect to compensation, benefits and reimbursable expenses paid by a corporation to an employee, unless otherwise set out in this Agreement.

H.Assistance in Litigation. Executive shall reasonably cooperate with the Company Group in the defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company Group that relate to events or occurrences that transpired while Executive was employed by Company. Executive’s cooperation in connection with such claims or actions shall include being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of Company at mutually convenient times. Executive also shall cooperate fully with the Company Group in connection with any investigation or review by any federal, state or local regulatory authority as any such investigation or review relates, to events or occurrences that transpired while Executive was employed by Company. Notwithstanding anything to the contrary in this Section 17(H), unless otherwise mutually agreed between Executive and Company in writing and, for each day that Executive performs services under this Section 17(H) Executive shall be reimbursed for Executive’s reasonable out-of-pocket expenses.

I.Beneficiaries; References. Executive shall be entitled to select (and change to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive’s death, and may change such election, in either case by giving Company written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate or other legal representative. Any reference to any gender in this Agreement shall include, where appropriate, the other gender.

J.Voluntary Agreement. Each Party to this Agreement has read and fully understands the terms and provisions hereof, has had an opportunity to review this Agreement with legal counsel, has executed this Agreement based upon such Party’s own judgment and advice of counsel, and knowingly, voluntarily and without duress, agrees to all of the terms set forth in this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party because of authorship of any provision of this Agreement. Except as expressly set forth in this Agreement, neither the Parties nor their affiliates, advisors and/or their attorneys have made any representation or warranty, express or implied, at law or in equity with respect of the subject matter contained herein. Without limiting the generality of the previous sentence, Company, its affiliates, advisors and/or attorneys have made no representation or warranty to Executive concerning the state or federal tax consequences to Executive regarding the transactions contemplated by this Agreement.

K.Effect of Headings. Headings to sections and paragraphs of this Agreement are for reference only, and do not form a part of this Agreement, or effect the interpretation of this Agreement.

L.Counterparts. This Agreement may be executed in counterparts, including by transmission of facsimile or PDF copies of signature pages, each of which shall for all purposes are deemed to be an original and all of which shall constitute an instrument. All signatures of the Parties transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

[SIGNATURE PAGE FOLLOWS]

SIGNATURE PAGE

OF

EMPLOYMENT AGREEMENT

IN WITNESS WHEREOF, Company has caused this Agreement to be duly executed and delivered by its duly authorized officer, and Executive has duly executed and delivered this Agreement, as of the date first written on page 1 of this Agreement.

/s/ Jane Wasman                

Jane Wasman

Chairman of the Board of Directors

Date:     March 21, 2019            

/s/ Angelos Stergiou                

Dr. Angelos Stergiou

Date:     March 21, 2019            

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

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

I, Angelos M. Stergiou, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of SELLAS Life Sciences Group, Inc.;

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

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

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

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

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

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

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

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

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

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

Dated: May 14, 2020

/s/ Angelos M. Stergiou

Angelos M. Stergiou, MD, ScD h.c.

President and Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

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

I, Angelos M. Stergiou, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of SELLAS Life Sciences Group, Inc.;

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

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

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

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

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

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

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

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

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

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

Dated: May 14, 2020

/s/ Angelos M. Stergiou

Angelos M. Stergiou, MD, ScD h.c.

President and Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report of SELLAS Life Sciences Group, Inc., (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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

2. The information contained in the Report fairly presents, in all material respects, the Company’s financial condition and result of operations.

By:	/s/ Angelos M. Stergiou
	Angelos M. Stergiou, MD, ScD h.c.
	President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
	Date: May 14, 2020

A signed original of this written statement required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

XML

Warrants to Acquire Shares of Common Stock - Warrants Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Jan. 02, 2020	Mar. 31, 2020	Jan. 09, 2020	Mar. 06, 2019
Class of Warrant or Right [Line Items]
Common stock to be called by warrants (in shares)			818,900
Number of warrants exercised (in shares)		449,000
Series A Convertible Preferred
Class of Warrant or Right [Line Items]
Common stock to be called by warrants (in shares)				76,000
Warrant exercise price (in dollars per share)	$ 7.50			$ 70.00
Number of warrants exercised (in shares)		0
Warrants 2019
Class of Warrant or Right [Line Items]
Number of warrants exercised (in shares)	63,000
Warrants 2020
Class of Warrant or Right [Line Items]
Decrease (increase) in warrant fair value		$ 0.1

XML

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Total Number of Shares
Options outstanding, beginning balance (in shares)	193,520	21,520	193,520
Granted (in shares)	172,000
Canceled (in shares)	0
Options outstanding, ending balance (in shares)	193,520	21,520
Exercisable (in shares)			7,642
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 112.81
Granted (in dollars per share)	1.89
Canceled (in dollars per share)	0.00
Ending balance (in dollars per share)	$ 14.23	$ 112.81
Exercisable (in dollars per share)			$ 119.06
Weighted average remaining contractual term, outstanding	8 years 10 months 25 days	8 years 11 months 22 days
Weighted average remaining contractual term, options exercisable	8 years 8 months 14 days
Aggregate Intrinsic Value
Beginning balance	$ 0
Granted	0
Canceled	0
Ending balance	$ 0	$ 0
Exercisable			$ 0

XML

Liquidity

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity

Liquidity

The Company has not generated any revenues, including from product sales, and has funded operations primarily from the proceeds of sales of its equity interests and convertible notes. Additional financing will be required by the Company to continue to fund its research and development activities. No assurance can be given that any such financing will be available when needed or that the Company’s research and development efforts will be successful and the Company cannot be certain at this time of the impact of the COVID-19 pandemic on its ability to raise additional capital.

On January 9, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors named therein (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the “January 2020 Registered Offering”), (i) an aggregate of 1,189,000 shares of common stock at an offering price of $3.9825 per share and (ii) an aggregate of 448,800 pre-funded warrants exercisable for shares of common stock (the “Pre-Funded Warrants”) at an offering price of $3.9725 per Pre-Funded Warrant, for gross proceeds of approximately $6.5 million before deducting the placement agent fee and related offering expenses. In a concurrent private placement, the Company issued to the Investors who participated in the January 2020 Registered Offering warrants exercisable for an aggregate of 818,900 shares of common stock at an exercise price of $3.93 per share. Each warrant is immediately exercisable and will expire five and one-half years from the issuance date. The net proceeds to the Company from the January 2020 Registered Offering, after deducting underwriting discounts and commissions and other estimated offering expenses, and excluding the exercise of any warrants, were approximately $6.0 million.

The Company regularly explores alternative means of financing its operations and seeks funding through various sources, including public and private securities offerings, collaborative arrangements with third parties and other strategic alliances and business transactions.

The Company currently does not have any commitments to obtain additional funds and may be unable to obtain sufficient funding in the future on acceptable terms, if at all. If the Company cannot obtain the necessary funding, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties to commercialize potential products or technologies that it might otherwise seek to develop or commercialize independently, consider various other strategic alternatives, including a merger or sale of the Company, or cease operations. If the Company engages in collaborations, it may receive lower consideration upon commercialization of such products than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the product development process.

The Company has evaluated the guidance of Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern, in order to determine whether there is substantial doubt about its ability to continue as a going concern for one year from the date its financial statements are available to be issued. The Company has prepared its consolidated financial statements assuming that it will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative cash flows from operations since inception and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its product candidates, which raises substantial doubt about the Company’s ability to continue as a going concern. Various internal and external factors will affect whether and when the Company’s product candidates become approved drugs and how significant their market share will be, some of which are outside of the Company’s control. The length of time and cost of developing and commercializing these product candidates and/or the failure of any of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

As of March 31, 2020, the Company had cash and cash equivalents of approximately $6.7 million, and restricted cash and cash equivalents of $0.1 million. The Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit of $105.3 million as of March 31, 2020. In addition, the Company had current liabilities of $3.6 million as of March 31, 2020. The Company expects its cash and cash equivalents as of March 31, 2020 will enable the Company to fund its operating expenses and capital expenditure requirements through the end of 2020.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating expenses:
Research and development	$ 1,864	$ 1,859
General and administrative	2,200	2,500
Total operating expenses and operating loss	(4,064)	(4,359)
Non-operating income (expense):
Change in fair value of warrant liability	35	195
Change in fair value of contingent consideration	(138)	(387)
Interest income (expense), net	24	14
Total non-operating income (expense), net	(79)	(178)
Net loss	(4,143)	(4,537)
Deemed dividend arising from warrant modifications	(78)	(439)
Net loss attributable to common stockholders	$ (4,221)	$ (4,976)
Per share information:
Net loss per common share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.66)	$ (11.12)
Weighted-average common shares outstanding, basic and diluted (in shares)	6,374,979	447,362

XML

Fair Value Measurements - Reconciliation of Level 3 Liabilities (Details) - Unobservable Inputs (Level 3) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration, beginning balance	$ 4,912
Change in the estimated fair value of the contingent consideration	138
Contingent consideration, ending balance	$ 5,050

XML

Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Jan. 09, 2020	Jan. 02, 2020	Dec. 31, 2019	Dec. 30, 2019	Mar. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common stock to be called by warrants (in shares)	818,900
Net proceeds of common stock		$ 300	$ 2,700	$ 300
Cash and cash equivalents			7,277		$ 6,746
Restricted cash and cash equivalents			100		100
Accumulated deficit			$ 101,147		105,290
Accounts payable and accrued liabilities					$ 3,600
Pre-Funded Warrants
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Offering (in dollars per share)	$ 3.9725
Warrants exercisable (in shares)	448,800
Gross proceeds from warrant exercises	$ 6,500
Net proceeds of common stock	$ 6,000
Investor
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Aggregate common stock (in shares)	1,189,000
Offering (in dollars per share)	$ 3.9825
Warrant exercise price (in dollars per share)	$ 3.93
Warrant term	5 years 6 months

XML

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Future Minimum Lease Payments

Future minimum rental payments under the Company's non-cancelable operating lease are as follows as of March 31, 2020 (in thousands):

Total minimum lease payments, all due in 2020	$	128
Less: imputed interest	(5		)
Operating lease liability	$	123

XML

Basis of Presentation and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

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

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. Unless the context otherwise indicates, reference in these notes to the "Company" refer to SELLAS Life Sciences Group, Inc., and its wholly owned subsidiaries, Private SELLAS, SLSG Limited, LLC, Sellas Life Sciences Limited, and Apthera, Inc. The functional currency of the Company's non-U.S. operations is the U.S. dollar.

Restricted Stock Units with Performance and Service Conditions

Restricted Stock Units with Performance and Service Conditions

During the three months ended March 31, 2020, the Board of Directors granted restricted stock units ("RSUs") to certain employees that vest based on performance and service conditions. The fair values of the RSUs are measured on the date of grant and are based on the Company's closing stock price on such date. Compensation expense is recognized for the number of RSUs expected to be earned, provided the requisite service period has been rendered, after assessing the probability that certain performance criteria will be met. Cumulative adjustments are recorded each quarter to reflect the estimated outcome of the performance-related conditions until the date results are determined and settled. If performance criteria are not met or are not expected to be met, any compensation expense previously recognized to date associated with the RSUs will be reversed.

Net Loss Per Share

Net Loss Per Share

Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as warrants, stock options and unvested restricted stock that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive.

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Adopted

In August 2018, FASB issued No. ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU No. 2018-13"). ASU No. 2018-13 modifies, adds and removes certain specific disclosure requirements on fair value measurements in Topic 820. The amendments in ASU No. 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company's disclosures. For the new disclosure regarding our Level 3 instruments, please read Note 4 to these consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Accounting ("ASU No. 2018-07"), which simplifies the accounting for share-based payments granted to nonemployees for goods and services. ASU No. 2018-07 supersedes ASC 505-50 and expands the scope of ASC 718, Compensation - Stock Compensation (Topic 718) ("ASC 718"), to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. ASU No. 2018-07 generally requires an entity to use a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year, for all (1) liability-classified nonemployee awards that have not been settled as of the adoption date and (2) equity-classified nonemployee awards for which a measurement date has not been established. This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company's consolidated financial statements and related disclosure.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Preferred Stock

The Company has authorized up to 5,000,000 shares of preferred stock, $0.0001 par value per share, for issuance.

Common Stock

The Company has authorized up to 350,000,000 shares of common stock, $0.0001 par value per share, for issuance.

On October 29, 2019, the Company entered into an Equity Distribution Agreement (the "Distribution Agreement") with Maxim Group LLC (the "Agent"), pursuant to which the Company was permitted to offer and sell shares of common stock through the Agent having an aggregate offering price up to $5.0 million in gross proceeds. In connection with such sales, the Agent collected fees equal to 3% of the gross sales price of all shares of common stock sold. Sales of the shares under the Distribution Agreement were made in transactions deemed to be "at the market offering" as defined in Rule 415 under the Securities Act of 1933. Shares sold under the Distribution Agreement were offered and sold pursuant to the Company's effective registration statement on Form S-3. During the year ended December 31, 2019, the Company sold 524,097 shares of common stock pursuant to the Distribution Agreement for net proceeds of $2.7 million. The Distribution Agreement was terminated on January 9, 2020. There were no shares of common stock sold pursuant to the Distribution Agreement in 2020.

On January 9, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors named therein (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the “January 2020 Registered Offering”), (i) an aggregate of 1,189,000 shares of common stock, par value $0.0001 per share, of the Company, at an offering price of $3.9825 per share and (ii) an aggregate of 448,800 pre-funded warrants exercisable for shares of common stock (the “Pre-Funded Warrants”) at an offering price of $3.9725 per pre-funded warrant, for gross proceeds of approximately $6.5 million before deducting the placement agent fee and related offering expenses. In a concurrent private placement, the Company issued to the Investors who participated in the January 2020 Registered Offering warrants exercisable for an aggregate of 818,900 shares of common stock at an exercise price of $3.93 per share. Each warrant is immediately exercisable and will expire five and one-half years from the issuance date. The net proceeds to the Company from the January 2020 Registered Offering, after deducting the placement agent fee and other estimated offering expenses, and excluding the exercise of any warrants, was approximately $6.0 million.

As of March 31, 2020, the Company has shares of common stock reserved for future issuance as follows (in thousands):

Warrants outstanding	1,120
Stock options outstanding	194
Restricted stock units outstanding	170
Shares reserved for future issuance under the Company’s 2019 Equity Incentive Plan	115
Shares reserved for future issuance under the Employee Stock Purchase Plan	8
Total common stock reserved for future issuance	1,607

Stock Subscription Receivable

Prior to December 31, 2019, the Company sold 75,000 shares of common stock for gross proceeds of $0.3 million. As the gross cash proceeds of $0.3 million were not received until January 2, 2020, the Company recorded a stock subscription receivable of $0.3 million as of December 31, 2019.

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Fair Value Measurements - Narrative (Details) - Apthera, Inc.	3 Months Ended
	Mar. 31, 2020 USD ($)	Dec. 31, 2011 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable, maximum amount	$ 30,000,000	$ 32,000,000
Contingent consideration paid	2,000,000
Contingent consideration	30,000,000
Contingent consideration payable, minimum amount	$ 0
Weighted average cost of capital
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business combination, contingent consideration, measurement input	0.118
Cost of debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business combination, contingent consideration, measurement input	0.036
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business combination, contingent consideration, timing of development milestones	5 years
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business combination, contingent consideration, timing of development milestones	8 years

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Commitments and Contingencies - Maturities of Lease Liabilities - 842 (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Total minimum lease payments, all due in 2020	$ 128
Less: imputed interest	(5)
Operating lease liability	$ 123

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Warrants to Acquire Shares of Common Stock - Fair Value of Warrants is Estimated Using Black-Scholes Option Pricing Model (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares)	1,120,000	302,000
Measurement Input, Risk Free Interest Rate
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input	0
Measurement Input, Expected Dividend Rate
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input	0
Series A Convertible Preferred
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares)	19,000	19,000
Strike price (in dollars per share)	$ 7.5	$ 7.50
Expected term	3 years 6 months 1 day	3 years 9 months 1 day
Volatility %	123.37%	112.84%
Risk-free rate %	0.31%	1.64%
Galena February 2017
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares)	1,000	1,000
Strike price (in dollars per share)	$ 1,650	$ 1,650
Expected term	1 year 10 months 13 days	2 years 1 month 13 days
Volatility %	151.18%	114.91%
Risk-free rate %	0.22%	1.64%
Galena Other
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares)	2,000	3,000
Strike price (in dollars per share)	$ 30,901.09	$ 41,494
Expected term	1 year 9 months 15 days	1 year 5 months 5 days
Volatility %	151.18%	114.91%
Risk-free rate %	0.22%	1.64%

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Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company evaluated all events or transactions that occurred after March 31, 2020 up through the date these financial statements were issued. Other than as disclosed elsewhere in the notes to the consolidated financial statements, the Company did not have any material subsequent events.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Office Space Rental

The Company has a non-cancelable operating lease for office space in New York, New York, which began August 1, 2018 with a term through July 31, 2020. The Company adopted ASC 842 in the first quarter of 2019 and as a result of the adoption, the Company recognized a current operating lease liability of $0.4 million and a non-current operating lease liability of $0.2 million with a corresponding right of use asset ("ROU") of $0.6 million, which is based on the present value of the minimum rental payments of the lease. The discount rate used to account for the Company's operating lease under ASC 842 is the Company’s estimated incremental borrowing rate of 13%. As of March 31, 2020, the lease has a remaining term of less than 1.0 year.

Rent expense related to the Company's operating lease was approximately $0.1 million for the three months ended March 31, 2020 and 2019. Future minimum rental payments under the Company's non-cancelable operating lease are as follows as of March 31, 2020 (in thousands):

Total minimum lease payments, all due in 2020	$	128
Less: imputed interest	(5		)
Operating lease liability	$	123

Operating lease amortization of the ROU asset was $0.1 million for the three months ended March 31, 2020 and 2019, respectively.

Legal Proceedings

From time to time, the Company is subject to various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business, which may include employment matters, breach of contract disputes and stockholder litigation. Such actions and proceedings are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, when the Company has assessed that a loss is probable and an amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. In the opinion of management, as of the date hereof, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s consolidated results of operations, financial position or cash flows.

The Company’s predecessor company, Galena, was involved in multiple legal proceedings and administrative actions, including stockholder class actions, both state and federal, and to which the Company is now subject, as follows:

On February 13, 2017, certain putative shareholder securities class action complaints were filed in federal court alleging, among other things, that Galena and certain of Galena's former officers and directors failed to disclose that Galena’s promotional practices for Abstral^® (fentanyl sublingual tablets) were allegedly improper and that Galena may be subject to civil and criminal liability, and that these alleged failures rendered Galena’s statements about its business misleading. The actions were consolidated, lead plaintiffs were named by the U.S. District Court for the District of New Jersey and a consolidated complaint was filed. The Company filed a motion to dismiss the consolidated complaint. On August 21, 2018, the Company's motion to dismiss the consolidated complaint was granted without prejudice to file an amended complaint. On September 20, 2018, the plaintiffs filed an amended complaint. On October 22, 2018, the Company filed a motion to dismiss the amended complaint. On November 13, 2019, the U.S. District Court for the District of New Jersey granted the Company's motion to dismiss. On December 20, 2019, the lead plaintiffs filed a Second Amended Consolidated Class Action Complaint. On January 29, 2020, the Company filed a motion to dismiss the amended complaint.

In March 2017, a derivative complaint was filed in the U.S. District Court for the District of New Jersey against the Company’s former directors and Galena, as a nominal defendant. In July 2017, a derivative complaint was filed in California state court against the Company’s former directors and Galena, as a nominal defendant. In January 2018, a derivative complaint was filed in the U.S. District Court for the District of New Jersey against the Company’s former directors, officers and employees, and the Company as a nominal defendant. These complaints purport to assert derivative claims for breach of fiduciary duty on the Company’s behalf against the Company’s former directors and, in certain of the complaints, certain of the Company’s former officers and former employees, based on substantially similar facts as alleged in the putative shareholder securities class action complaints mentioned above. These lawsuits are currently stayed pending resolution of motions to dismiss in the referenced securities class action.

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Warrants to Acquire Shares of Common Stock - Changes in Fair Value of Warrant Liability (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Class of Warrant or Right, Fair Value [Roll Forward]
Warrant liability, beginning balance	$ 52
Fair value of warrants granted	0
Fair value of warrants exercised	0
Adjustment to exercise price of warrants	0
Change in fair value of warrants	(35)
Warrant liability, ending balance	17
Series A Convertible Preferred
Class of Warrant or Right, Fair Value [Roll Forward]
Warrant liability, beginning balance	52
Fair value of warrants granted	0
Fair value of warrants exercised	0
Adjustment to exercise price of warrants	0
Change in fair value of warrants	(35)
Warrant liability, ending balance	17
Galena February 2017
Class of Warrant or Right, Fair Value [Roll Forward]
Warrant liability, beginning balance	0
Fair value of warrants granted	0
Fair value of warrants exercised	0
Adjustment to exercise price of warrants	0
Change in fair value of warrants	0
Warrant liability, ending balance	$ 0

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Balance Sheet Accounts - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Insurance	$ 1,239	$ 200
Clinical development	492	224
Professional services	129	49
Other	84	84
Prepaid expenses and other current assets	$ 1,944	$ 557

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Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended	12 Months Ended
	Jan. 09, 2020	Jan. 02, 2020	Oct. 29, 2019	Mar. 31, 2020	Dec. 31, 2019	Dec. 30, 2019
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)				5,000,000	5,000,000
Preferred stock, par value (in dollars per share)				$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)				350,000,000	350,000,000
Common stock, par value (in dollars per share)				$ 0.0001	$ 0.0001
Number of shares of stock (in shares)				0	524,097	75,000
Net proceeds of common stock		$ 300			$ 2,700	$ 300
Common stock to be called by warrants (in shares)	818,900
Stock subscription receivable				$ 0	$ 308
Pre-Funded Warrants
Class of Stock [Line Items]
Net proceeds of common stock	$ 6,000
Offering (in dollars per share)	$ 3.9725
Warrants exercisable (in shares)	448,800
Gross proceeds from warrant exercises	$ 6,500
Distribution Agreement
Class of Stock [Line Items]
Sale of shares, common stock gross proceeds			$ 5,000
Percentage gross proceeds from the sale of share			3.00%
Investor
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.0001
Aggregate common stock (in shares)	1,189,000
Offering (in dollars per share)	$ 3.9825
Warrant exercise price (in dollars per share)	$ 3.93
Warrant term	5 years 6 months

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 14, 2020
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	SELLAS Life Sciences Group, Inc.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,717,900
Entity Central Index Key	0001390478
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2018		0	440,529
Beginning balance at Dec. 31, 2018	$ 5,245	$ 0	$ 1	$ 87,099	$ (81,855)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Impact of anti-dilution protection on liability-classified warrants	(173)			(173)
Issuance of common stock upon exercise of warrants (shares)			43,000
Issuance of common stock upon exercise of warrants	2,230			2,230
Stock-based compensation	185			185
Net loss	(4,537)				(4,537)
Ending balance (in shares) at Mar. 31, 2019		0	483,529
Ending balance at Mar. 31, 2019	2,950	$ 0	$ 1	89,341	(86,392)
Beginning balance (in shares) at Dec. 31, 2019		0	5,080,100
Beginning balance at Dec. 31, 2019	6,093	$ 0	$ 5	107,235	(101,147)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock and common stock warrants, net of issuance costs (in shares)			1,189,000
Issuance of common stock and common stock warrants, net of issuance costs	5,963		$ 1	5,962
Issuance of common stock upon exercise of pre-funded warrants (in shares)			448,800
Issuance of common stock upon exercise of pre-funded warrants	4		$ 1	3
Stock-based compensation	145			145
Net loss	(4,143)				(4,143)
Ending balance (in shares) at Mar. 31, 2020		0	6,717,900
Ending balance at Mar. 31, 2020	$ 8,062	$ 0	$ 7	$ 113,345	$ (105,290)

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Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Sep. 10, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 29, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for issuance (in shares)		1,606,511.000
Weighted average exercise price, granted (in dollars per share)		$ 1.54	$ 54.00
Averages contractual term		10 years
Expected dividend yield		0.00%	0.00%
Unrecognized compensation cost, options		$ 1.1
Operating expenses weighted average period		2 years 4 months 20 days
Closing price of the Company's common stock (in dollars per share)		$ 1.73
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Average vesting term		6 years
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Average vesting term		4 years
2017 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for issuance (in shares)		2,684
2017 Equity Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock authorized for issuance (in shares)				24,204
2019 Incentive plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock authorized for issuance (in shares)	454,005
Shares of common stock reserved for issuance (in shares)		114,689
Options expire from date of grant	4 years
Percentage increase in number of shares available for future issuance under stock based awards	5.00%
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average exercise price, granted (in dollars per share)		$ 1.89
Unrecognized compensation cost		$ 0.3

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Stock-Based Compensation - Summary of RSU Activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 1.54	$ 54.00
RSUs
Total Number of Shares
Beginning balance (in shares)	0
Granted (in shares)	170,000
Vested (in shares)	0
Ending balance (in shares)	170,000
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 0.00
Granted (in dollars per share)	1.89
Vested (in dollars per share)	0.00
Ending balance (in dollars per share)	$ 1.89

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Basis of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

The Summary of Significant Accounting Policies included in the Company's 2019 Annual Report have not materially changed, except as set forth below.

Basis of Presentation

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

Principles of Consolidation

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. Unless the context otherwise indicates, reference in these notes to the "Company" refer to SELLAS Life Sciences Group, Inc., and its wholly owned subsidiaries, Private SELLAS, SLSG Limited, LLC, Sellas Life Sciences Limited, and Apthera, Inc. The functional currency of the Company's non-U.S. operations is the U.S. dollar.

Unaudited Interim Results

These consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and the notes thereto included in the 2019 Annual Report. The accompanying consolidated financial statements at March 31, 2020 and for the three months ended March 31, 2020 and 2019, are unaudited, but include all adjustments, consisting of normal recurring entries, that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2019 have been derived from the audited financial statements as of that date.

Reverse Stock Split

On November 6, 2019, the Company filed a certificate of amendment to its amended and restated Certificate of Incorporation to effect a 1 - for - 50 reverse stock split of the Company's outstanding shares of common stock, which became effective on November 7, 2019. The shares of common stock underlying the Company's outstanding options and warrants were also proportionately adjusted for the reverse stock split. In addition, the number of shares of common stock available for issuance under the Company’s equity incentive plans and employee stock purchase plan were proportionately adjusted for the reverse stock split. Further, the per share exercise prices for options granted under such plans were proportionately adjusted for the reverse stock split. The reverse stock split reduced the number of shares of the Company’s common stock that were outstanding at November 8, 2019 from 227,800,147 to 4,549,208, after the cancellation of fractional shares. No fractional shares were issued in connection with the reverse stock split. Stockholders who otherwise held fractional shares of the Company’s common stock as a result of the reverse stock split received a cash payment in lieu of such fractional shares. These consolidated financial statements give retroactive effect to such reverse stock split and all share and per share amounts have been adjusted accordingly.

Restricted Stock Units with Performance and Service Conditions

During the three months ended March 31, 2020, the Board of Directors granted restricted stock units ("RSUs") to certain employees that vest based on performance and service conditions. The fair values of the RSUs are measured on the date of grant and are based on the Company's closing stock price on such date. Compensation expense is recognized for the number of RSUs expected to be earned, provided the requisite service period has been rendered, after assessing the probability that certain performance criteria will be met. Cumulative adjustments are recorded each quarter to reflect the estimated outcome of the performance-related conditions until the date results are determined and settled. If performance criteria are not met or are not expected to be met, any compensation expense previously recognized to date associated with the RSUs will be reversed.

Net Loss Per Share

Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as warrants, stock options and unvested restricted stock that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive.

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive (in thousands):

	Three Months Ended March 31,
	2020	2019
Common stock warrants	1,120	354
Stock options	194	27
RSUs	170	—
	1,484	381

Recent Accounting Pronouncements Adopted

In August 2018, FASB issued No. ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU No. 2018-13"). ASU No. 2018-13 modifies, adds and removes certain specific disclosure requirements on fair value measurements in Topic 820. The amendments in ASU No. 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company's disclosures. For the new disclosure regarding our Level 3 instruments, please read Note 4 to these consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Accounting ("ASU No. 2018-07"), which simplifies the accounting for share-based payments granted to nonemployees for goods and services. ASU No. 2018-07 supersedes ASC 505-50 and expands the scope of ASC 718, Compensation - Stock Compensation (Topic 718) ("ASC 718"), to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. ASU No. 2018-07 generally requires an entity to use a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year, for all (1) liability-classified nonemployee awards that have not been settled as of the adoption date and (2) equity-classified nonemployee awards for which a measurement date has not been established. This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company's consolidated financial statements and related disclosure.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Allocated Stock-based Compensation Expense

The following table summarizes the components of stock-based compensation expense in the consolidated statements of operations for the three months ended March 31, 2020 and 2019, respectively (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1	$	39
General and administrative	144		146
Total stock-based compensation	$	145	$	185

Assumptions for Option Grants Issued

The Company uses the Black-Scholes option-pricing model and the following assumptions were used to determine the fair value of all its stock options granted during the three months ended March 31, 2020 and 2019, respectively:

	Three Months Ended March 31,
	2020		2019
Risk free interest rate	0.63	%	2.49	%
Volatility	106.09	%	96.57	%
Expected lives (years)	6.13		6.15
Expected dividend yield	—	%	—	%

Stock Option Activity

The following table summarizes stock option activity of the Company for the three months ended March 31, 2020:

	Total Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2019	21,520	$	112.81	8.98	$	—
Granted	172,000	1.89			$	—
Canceled	—	—			$	—
Outstanding at March 31, 2020	193,520	$	14.23	8.90	$	—
Options exercisable at March 31, 2020	7,642	$	119.06	8.71	$	—

Summary of RSU Activity

The following table summarizes RSU activity of the Company for the three months ended March 31, 2020:

	Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2019	—	$	—
Granted	170,000	$	1.89
Vested	—	$	—
Unvested at March 31, 2020	170,000	$	1.89

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Balance Sheet Accounts (Tables)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current liabilities consist of the following (in thousands):

	March 31, 2020		December 31, 2019
Insurance	$	1,239	$	200
Clinical development	492		224
Professional services	129		49
Other	84		84
Prepaid expenses and other current assets	$	1,944	$	557

Schedule of Accrued Expenses and Other Current Liabilities

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

	March 31, 2020		December 31, 2019
Clinical trial costs	$	519	$	371
Compensation and related benefits	235		606
Professional fees	134		194
Accrued expenses and other current liabilities	$	888	$	1,171

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Fair Value Measurements - Contingent Purchase Price Consideration, Measured at Estimated Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Liabilities:
Warrant liability	$ 17	$ 52
Fair Value, Measurements, Recurring
Assets:
Cash equivalents	6,304	7,027
Total assets measured and recorded at fair value	6,304	7,027
Liabilities:
Warrant liability	17	52
Contingent consideration	5,050	4,912
Total liabilities measured and recorded at fair value	5,067	4,964
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets (Level 1)
Assets:
Cash equivalents	6,304	7,027
Total assets measured and recorded at fair value	6,304	7,027
Liabilities:
Warrant liability	0	0
Contingent consideration	0	0
Total liabilities measured and recorded at fair value	0	0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
Assets:
Cash equivalents	0	0
Total assets measured and recorded at fair value	0	0
Liabilities:
Warrant liability	0	0
Contingent consideration	0	0
Total liabilities measured and recorded at fair value	0	0
Fair Value, Measurements, Recurring | Unobservable Inputs (Level 3)
Assets:
Cash equivalents	0	0
Total assets measured and recorded at fair value	0	0
Liabilities:
Warrant liability	17	52
Contingent consideration	5,050	4,912
Total liabilities measured and recorded at fair value	$ 5,067	$ 4,964

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Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liability	$ 123		$ 217
Operating lease right-of-use asset	$ 123		$ 217
Operating lease, discount rate	13.00%
Operating lease, remaining term	1 year
Rent expense, Topic 842	$ 100	$ 100
Operating lease amortization	$ 100	$ 100
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liability				$ 400
Operating lease liability, non-current				200
Operating lease right-of-use asset				$ 600

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Warrants to Acquire Shares of Common Stock - Warrants Outstanding (Details)	3 Months Ended
	Mar. 31, 2020 shares
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	302,000
Granted (in shares)	1,268,000
Exercised (in shares)	(449,000)
Canceled/Expired (in shares)	(1,000)
Outstanding, end of period (in shares)	1,120,000
January 2020 Offering
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	0
Granted (in shares)	819,000
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	819,000
Pre-funded January 2020 Offering
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	0
Granted (in shares)	449,000
Exercised (in shares)	(449,000)
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	0
June 2019 Offering
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	2,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	2,000
March 2019 Exercise Agreement
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	63,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	63,000
July 2018 Offering
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	208,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	208,000
Series A Convertible Preferred
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	19,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	19,000
2017 Equilibria
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	6,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	6,000
Galena February 2017
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	1,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	0
Outstanding, end of period (in shares)	1,000
Galena Other
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	3,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled/Expired (in shares)	(1,000)
Outstanding, end of period (in shares)	2,000

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Basis of Presentation and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Securities Outstanding Excluded from Computation of Diluted Weighted Average Shares Outstanding

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive (in thousands):

	Three Months Ended March 31,
	2020	2019
Common stock warrants	1,120	354
Stock options	194	27
RSUs	170	—
	1,484	381

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Warrants to Acquire Shares of Common Stock

3 Months Ended

Mar. 31, 2020

Warrants and Rights Note Disclosure [Abstract]

Warrants to Acquire Shares of Common Stock

Warrants to Acquire Shares of Common Stock

Warrants Outstanding

The following is a summary of the activity of the Company's warrants to acquire shares of common stock for the three months ended March 31, 2020 (in thousands):

Warrant Issuance	Outstanding, December 31, 2019	Granted	Exercised		Canceled/Expired		Outstanding, March 31, 2020	Expiration
January 2020 Offering	—	819	—		—		819	July 2025
Pre-funded January 2020 Offering	—	449	(449	)	—		—	July 2025
June 2019 Offering	2	—	—		—		2	June 2024
March 2019 Exercise Agreement	63	—	—		—		63	March 2024
July 2018 Offering	208	—	—		—		208	July 2023
Series A Convertible Preferred	19	—	—		—		19	September 2023
2017 Equilibria	6	—	—		—		6	December 2022
Galena February 2017	1	—	—		—		1	February 2022
Galena Other	3	—	—		(1	)	2	January 2022
	302	1,268	(449	)	(1	)	1,120

Warrants to acquire shares of common stock consist of warrants that may be settled in cash, which are liability-classified warrants, and equity-classified warrants.

Warrants Classified as Liabilities

Liability-classified warrants consist of warrants to acquire common stock issued in connection with previous equity financings for Series A Convertible Preferred Stock, Galena's February 2017 financing, and various other Galena equity financings that were assumed by the Company at the consummation of the Merger. These warrants may be settled in cash and were determined not to be indexed to the Company’s common stock.

The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the consolidated statement of operations as change in fair value of warrant liability. The fair value of the warrants is estimated using a Black-Scholes pricing model with the following inputs:

As of March 31, 2020
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.50	123.37	%	0.31	%
Galena February 2017	1	$	1,650.00	1.87	151.18	%	0.22	%
Galena Other	2	$	30,901.09	1.79	151.18	%	0.22	%
As of December 31, 2019
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.75	112.84	%	1.64	%
Galena February 2017	1	$	1,650.00	2.12	114.91	%	1.64	%
Galena Other	3	$	41,494.00	1.43	114.91	%	1.64	%

The expected volatility assumptions are based on the Company's implied volatility in combination with the implied volatilities of similar publicly traded entities. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the time of valuation. The dividend yield used in the pricing model is zero, because the Company has no present intention to pay cash dividends.

The changes in fair value of the warrant liability for the three months ended March 31, 2020 were as follows (in thousands):

Warrant Issuance	Warrant liability, December 31, 2019		Fair value of warrants granted		Fair value of warrants exercised		Adjustment to exercise price of warrants		Change in fair value of warrants			Warrant liability, March 31, 2020
Series A Convertible Preferred	$	52	$	—	$	—	$	—	$	(35	)	$	17
Galena February 2017	—		—		—		—		—			—
	$	52	$	—	$	—	$	—	$	(35	)	$	17

Warrants Classified as Equity

The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock issued during the January 2020 Offering and concurrent private placement were recorded as equity upon issuance. During its evaluation of equity classification of these pre-funded warrants and common stock purchase warrants, the Company considered the conditions as prescribed within ASC 815-40, Derivatives and Hedging, Contracts in an Entity’s own Equity (“ASC 815-40”). The conditions within ASC 815-40 are not subject to a probability assessment. The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock do not fall under the liability criteria within ASC 480, Distinguishing Liabilities from Equity, as they are not puttable and do not represent an instrument that has a redeemable underlying security. The pre-funded warrants exercisable for shares of common stock and warrants to acquire shares of common stock do meet the definition of a derivative instrument under ASC 815, but are eligible for the scope exception as they are indexed to the Company’s own stock and would be classified in permanent equity if freestanding.

Warrant Modification

On March 6, 2019, the Company entered into a Warrant Exercise Agreement (the "March 2019 Exercise Agreement") with one of the holders of the Company's warrants issued in July 2018. Pursuant to the March 2019 Exercise Agreement, new warrants to purchase up to an aggregate of approximately 76,000 shares of common stock at an exercise price of $70.00 per share ("March 2019 Exercise Agreement Warrants") were issued on a share-for-share basis in an amount equal to the number of the warrants issued in 2018 that were cash exercised by the warrant holder prior to May 31, 2019. On January 2, 2020, the Company amended the March 2019 Exercise Agreement Warrants to provide for an exercise price of $7.50 per share (subject to adjustment for stock splits and the like). The reduced exercise price of the 63,000 March 2019 Exercise Agreement Warrants increased the fair value of these warrants by approximately $0.1 million during the three months ended March 31, 2020, which is recorded as a deemed dividend increasing the net loss attributable to common stockholders and additional paid-in-capital.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

Description	March 31, 2020		Quoted Prices In     Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Unobservable  Inputs (Level 3)
Assets:
Cash equivalents	$	6,304	$	6,304	$	—	$	—
Total assets measured and recorded at fair value	$	6,304	$	6,304	$	—	$	—
Liabilities:
Warrant liability	$	17	$	—	$	—	$	17
Contingent consideration	5,050		—		—		5,050
Total liabilities measured and recorded at fair value	$	5,067	$	—	$	—	$	5,067

Description	December 31, 2019		Quoted Prices In     Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Unobservable  Inputs (Level 3)
Assets:
Cash equivalents	$	7,027	$	7,027	$	—	$	—
Total assets measured and recorded at fair value	$	7,027	$	7,027	$	—	$	—
Liabilities:
Warrant liability	$	52	$	—	$	—	$	52
Contingent consideration	4,912		—		—		4,912
Total liabilities measured and recorded at fair value	$	4,964	$	—	$	—	$	4,964

The Company did not transfer any financial instruments into or out of Level 3 classification during the three months endedMarch 31, 2020 or the year ended December 31, 2019. See Note 8, Warrants to Acquire Shares of Common Stock, for a reconciliation of the changes in the fair value of the warrant liability for the three months endedMarch 31, 2020.

A reconciliation of the change in the fair value of the contingent consideration liability for the three months endedMarch 31, 2020 is as follows (in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent consideration, December 31, 2019	$	4,912
Change in the estimated fair value of the contingent consideration	138
Contingent consideration, March 31, 2020	$	5,050

The fair value of the contingent consideration is measured at the end of each reporting period using Level 3 inputs in a probability-weighted, discounted cash-outflow model. The contingent consideration relates to Galena's acquisition of Apthera, Inc. in 2011 and the future contingent payments of up to $32.0 million based on the achievement of certain development and commercial milestones relating to the Company’s nelipepimut-S ("NPS") product candidate, of which $2.0 million has been paid to date. The remaining contingent consideration of up to $30.0 million is payable at the election of the Company in either cash or shares of common stock, provided that the Company may not issue any shares in satisfaction of any contingent consideration unless it has first obtained approval from its stockholders in accordance with Rule 5635(a) of the Nasdaq Marketplace Rules.

The significant unobservable assumptions include the probability of achieving each milestone, the date the Company expects to reach the milestone, and a determination of present value factors used to discount future expected cash outflows. Changes in fair value reflect new information about the probability and anticipated timing of meeting the conditions of the milestone payments. In the absence of new information, changes in fair value will only reflect the interest component of contingent consideration related to the passage of time. As of March 31, 2020, estimated future contingent milestone payments related to the Company's business range from zero if no milestone events are achieved, to a maximum of $30.0 million if all development and commercial milestones are reached. As of March 31, 2020, resulting probability-weighted cash flows were discounted using a weighted average cost of capital of 11.8% for development milestones and cost of debt of 3.6% for the commercial milestones. The Company estimates the timing of achievement of these development milestones to range from five to eight years as of March 31, 2020.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, shares issued (in shares)	6,717,900	5,080,100
Common stock, shares outstanding (in shares)	6,717,900	5,080,100
Series A Preferred Stock
Preferred stock, shares authorized (in shares)	17,500	17,500

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Description of Business

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of Business

Overview

SELLAS Life Sciences Group, Inc. (the "Company" or "SELLAS") is a late-stage clinical biopharmaceutical company focused on novel cancer immunotherapeutics for a broad range of cancer indications. SELLAS’ lead product candidate, galinpepimut-S ("GPS"), is licensed from Memorial Sloan Kettering Cancer Center and targets the Wilms Tumor 1 ("WT1") protein, which is present in an array of tumor types. GPS has potential as a monotherapy or in combination to address a broad spectrum of hematologic malignancies and solid tumor indications. In January 2020, the Company commenced a Phase 3 trial for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of their second complete remission. SELLAS’ second product candidate, nelipepimut-S ("NPS"), is a HER2-directed cancer immunotherapy with potential for the treatment of patients with early stage breast cancer with low to intermediate HER2 expression, otherwise known as HER2 1+ or 2+, which includes triple negative breast cancer patients, following standard of care.

As used in this Quarterly Report on Form 10-Q, the words the "Company," and "SELLAS" refer to SELLAS Life Sciences Group, Inc. and its consolidated subsidiaries following the completion of the business combination with Galena Biopharma, Inc., a Delaware corporation ("Galena"), and SELLAS Life Sciences Group, Ltd., a privately held Bermuda exempted company ("Private SELLAS") in December 2017. This business combination is referred to as the Merger. Upon completion of the Merger, the Company's name changed from "Galena Biopharma, Inc." to "SELLAS Life Sciences Group, Inc." and the Company's financial statements became those of Private SELLAS.

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new coronavirus as a “pandemic”. First identified in late 2019 and known now as COVID-19, the outbreak has impacted millions of individuals worldwide. While the Company's current business and operations have not been materially impacted by the coronavirus pandemic, the extent to which the Company's business and operations could be impacted throughout the remainder of 2020 will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, the re-emergence of a second outbreak in the fall or winter, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. In particular, the continued spread of the coronavirus globally could adversely impact the Company's clinical trial operations and could have an adverse impact on the Company's business and the Company's financial results. The Company will continue to monitor the situation closely, but given the uncertainty, management cannot estimate the impact of the COVID-19 pandemic on the Company's financial statements or operations.

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Stock-Based Compensation - Assumptions for Option Grants Issued (Details)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Risk free interest rate	0.63%	2.49%
Volatility	106.09%	96.57%
Expected lives (years)	6 years 1 month 16 days	6 years 1 month 26 days
Expected dividend yield	0.00%	0.00%

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Basis of Presentation and Significant Accounting Policies (Details)	Nov. 07, 2019 shares	Mar. 31, 2020 shares	Dec. 31, 2019 shares	Nov. 08, 2019 shares
Accounting Policies [Abstract]
Reverse stock split ratio	0.02
Common stock, shares outstanding (in shares)	227,800,147	6,717,900	5,080,100	4,549,208

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Common Stock Reserved for Future Issuance

As of March 31, 2020, the Company has shares of common stock reserved for future issuance as follows (in thousands):

Warrants outstanding	1,120
Stock options outstanding	194
Restricted stock units outstanding	170
Shares reserved for future issuance under the Company’s 2019 Equity Incentive Plan	115
Shares reserved for future issuance under the Employee Stock Purchase Plan	8
Total common stock reserved for future issuance	1,607

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Stock-Based Compensation - Allocated Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 145	$ 185
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	1	39
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 144	$ 146

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 6,746	$ 7,277
Restricted cash and cash equivalents	100	100
Stock subscription receivable	0	308
Prepaid expenses and other current assets	1,944	557
Total current assets	8,790	8,242
Operating lease right-of-use asset	123	217
In-process research and development	5,700	5,700
Goodwill	1,914	1,914
Deposits and other assets	499	536
Total assets	17,026	16,609
Current liabilities:
Accounts payable	2,624	3,902
Accrued expenses and other current liabilities	888	1,171
Operating lease liability	123	217
Total current liabilities	3,635	5,290
Deferred tax liability	262	262
Warrant liability	17	52
Contingent consideration	5,050	4,912
Total liabilities	8,964	10,516
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; Series A convertible preferred stock, 17,500 shares designated; no shares issued and outstanding at March 31, 2020 and December 31, 2019	0	0
Common stock, $0.0001 par value; 350,000,000 shares authorized, 6,717,900 and 5,080,100 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively.	7	5
Additional paid-in capital	113,345	107,235
Accumulated deficit	(105,290)	(101,147)
Total stockholders’ equity	8,062	6,093
Total liabilities and stockholders’ equity	$ 17,026	$ 16,609

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net loss	$ (4,143)	$ (4,537)
Adjustment to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	145	185
Change in fair value of common stock warrants	(35)	(195)
Change in fair value of contingent consideration	138	387
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(1,350)	(302)
Accounts payable	(1,303)	883
Accrued expenses and other current liabilities	(283)	(1,412)
Net cash used in operating activities	(6,831)	(4,991)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs	5,988	0
Collection of stock subscription receivable	308	0
Net proceeds from exercise of warrants	4	2,230
Net cash provided by financing activities	6,300	2,230
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	(531)	(2,761)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at the beginning of period	7,377	5,451
Cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of period	6,846	2,690
Supplemental disclosure of cash flow information:
Cash received during the periods for interest	24	14
Supplemental disclosure of non-cash investing and financing activities:
Operating right of use asset and current and non-current liability	123	0
Impact of anti-dilution protection on liability-classified warrants	0	173
Offering expenses in accounts payable and accrued expenses and other current liabilities	$ 25	$ 0

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Basis of Presentation and Significant Accounting Policies - Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,484	381
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,120	354
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	194	27
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	170	0

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Warrants to Acquire Shares of Common Stock (Tables)

3 Months Ended

Mar. 31, 2020

Warrants and Rights Note Disclosure [Abstract]

Schedule of Warrant Activity Table

The following is a summary of the activity of the Company's warrants to acquire shares of common stock for the three months ended March 31, 2020 (in thousands):

Warrant Issuance	Outstanding, December 31, 2019	Granted	Exercised		Canceled/Expired		Outstanding, March 31, 2020	Expiration
January 2020 Offering	—	819	—		—		819	July 2025
Pre-funded January 2020 Offering	—	449	(449	)	—		—	July 2025
June 2019 Offering	2	—	—		—		2	June 2024
March 2019 Exercise Agreement	63	—	—		—		63	March 2024
July 2018 Offering	208	—	—		—		208	July 2023
Series A Convertible Preferred	19	—	—		—		19	September 2023
2017 Equilibria	6	—	—		—		6	December 2022
Galena February 2017	1	—	—		—		1	February 2022
Galena Other	3	—	—		(1	)	2	January 2022
	302	1,268	(449	)	(1	)	1,120

Fair Value of Warrants is Estimated Using Black-Scholes Option Pricing Model

The fair value of the warrants is estimated using a Black-Scholes pricing model with the following inputs:

As of March 31, 2020
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.50	123.37	%	0.31	%
Galena February 2017	1	$	1,650.00	1.87	151.18	%	0.22	%
Galena Other	2	$	30,901.09	1.79	151.18	%	0.22	%
As of December 31, 2019
Warrant Issuance	Outstanding (in thousands)	Strike price (per share)		Expected term (years)	Volatility %		Risk-free rate %
Series A Convertible Preferred	19	$	7.50	3.75	112.84	%	1.64	%
Galena February 2017	1	$	1,650.00	2.12	114.91	%	1.64	%
Galena Other	3	$	41,494.00	1.43	114.91	%	1.64	%

Changes in Fair Value of Warrant Liability

The changes in fair value of the warrant liability for the three months ended March 31, 2020 were as follows (in thousands):

Warrant Issuance	Warrant liability, December 31, 2019		Fair value of warrants granted		Fair value of warrants exercised		Adjustment to exercise price of warrants		Change in fair value of warrants			Warrant liability, March 31, 2020
Series A Convertible Preferred	$	52	$	—	$	—	$	—	$	(35	)	$	17
Galena February 2017	—		—		—		—		—			—
	$	52	$	—	$	—	$	—	$	(35	)	$	17

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Balance Sheet Accounts - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Clinical trial costs	$ 519	$ 371
Compensation and related benefits	235	606
Professional fees	134	194
Accrued expenses and other current liabilities	$ 888	$ 1,171

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Stockholders' Equity - Common Stock are Reserved for Future Issuance (Details) - shares	Mar. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants outstanding (in shares)	1,120,000	302,000
Stock options outstanding (in shares)	193,520	21,520
Shares reserved for future issuance under the Company’s 2019 Equity Incentive Plan (in shares)	114,689
Shares reserved for future issuance under the Employee Stock Purchase Plan (in shares)	8,302
Total common stock reserved for future issuance (in shares)	1,606,511.000
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units outstanding (in shares)	170,000	0

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

2017 Equity Incentive Plan

On December 29, 2017, the 2017 Equity Incentive Plan was approved by the stockholders of the Company, and provided for the issuance of up to a maximum of 24,204 shares of common stock underlying stock options granted prior to September 10, 2019. The 2017 Equity Incentive Plan was terminated upon the approval of the 2019 Incentive Plan subject to outstanding stock options granted under the 2017 Equity Incentive Plan that remain exercisable through maturity for the Company's employees and directors.

2019 Equity Incentive Plan

On September 10, 2019, the 2019 Equity Incentive Plan was approved by the stockholders of the Company, and currently allows for issuance of up to (i) 454,005 shares of common stock in connection with the grant of stock-based awards, including stock options, restricted stock, restricted stock units, stock appreciation rights and other types of awards as deemed appropriate plus (ii) 2,684 shares of common stock under the 2017 Equity Incentive Plan that were forfeited back to the Company subsequent to September 10, 2019 and are available for future issuance.

The number of shares reserved for issuance under the 2019 Equity Incentive Plan will automatically increase on January 1 of each year, for a period of not more than four years, commencing on January 1, 2020 and ending on (and including) January 1, 2023, by an amount equal to the lesser of (i) 5% of the total number of shares of common stock outstanding at the end of the prior fiscal year; and (ii) an amount determined by the board of directors or authorized committee. As of March 31, 2020, 114,689 shares of common stock were reserved for future grants under the 2019 Equity Incentive Plan.

The following table summarizes the components of stock-based compensation expense in the consolidated statements of operations for the three months ended March 31, 2020 and 2019, respectively (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1	$	39
General and administrative	144		146
Total stock-based compensation	$	145	$	185

Options to Purchase Shares of Common Stock

The Company uses the Black-Scholes option-pricing model and the following assumptions were used to determine the fair value of all its stock options granted during the three months ended March 31, 2020 and 2019, respectively:

	Three Months Ended March 31,
	2020		2019
Risk free interest rate	0.63	%	2.49	%
Volatility	106.09	%	96.57	%
Expected lives (years)	6.13		6.15
Expected dividend yield	—	%	—	%

The weighted-average grant date fair value of options granted during the three months ended March 31, 2020 and 2019 was $1.54 and $54.00, respectively.

The Company’s expected common stock price volatility assumption is based upon the Company's own implied volatility in combination with the implied volatility of a basket of comparable companies. The expected life assumptions for employee grants were based upon the simplified method, which averages the contractual term of the Company’s options of ten years with the average vesting term of four years for an average of approximately six years. The expected life assumptions for non-employees were based upon the contractual term of the option. The dividend yield assumption is zero because the Company has never paid cash dividends and presently has no intention to do so. The risk-free interest rate used for each grant was also based upon prevailing short-term interest rates. The Company accounts for forfeitures as they occur.

As of March 31, 2020, there was $1.1 million of unrecognized compensation cost related to outstanding stock options that is expected to be recognized as a component of the Company’s operating expenses over a weighted-average period of 2.39 years.

The following table summarizes stock option activity of the Company for the three months ended March 31, 2020:

	Total Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2019	21,520	$	112.81	8.98	$	—
Granted	172,000	1.89			$	—
Canceled	—	—			$	—
Outstanding at March 31, 2020	193,520	$	14.23	8.90	$	—
Options exercisable at March 31, 2020	7,642	$	119.06	8.71	$	—

The aggregate intrinsic values of outstanding and exercisable stock options at March 31, 2020 were calculated based on the closing price of the Company’s common stock as reported on the Nasdaq Capital Market on March 31, 2020 of $1.73 per share. The aggregate intrinsic value equals the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying stock options.

RSUs with Performance and Service Conditions

The Company granted RSUs subject to both performance-based and service-based vesting conditions to certain of its employees pursuant to the Company's 2019 Equity Incentive Plan that will settle in shares of common stock. These RSUs vest based on the achievement of certain clinical and regulatory milestones and the respective employee's continued employment with the Company. As of March 31, 2020 there was $0.3 million of unrecognized compensation cost related to outstanding RSUs.

The following table summarizes RSU activity of the Company for the three months ended March 31, 2020:

	Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2019	—	$	—
Granted	170,000	$	1.89
Vested	—	$	—
Unvested at March 31, 2020	170,000	$	1.89

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Balance Sheet Accounts

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Accounts

Balance Sheet Accounts

Prepaid expenses and other current liabilities consist of the following (in thousands):

	March 31, 2020		December 31, 2019
Insurance	$	1,239	$	200
Clinical development	492		224
Professional services	129		49
Other	84		84
Prepaid expenses and other current assets	$	1,944	$	557

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

	March 31, 2020		December 31, 2019
Clinical trial costs	$	519	$	371
Compensation and related benefits	235		606
Professional fees	134		194
Accrued expenses and other current liabilities	$	888	$	1,171

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

Description	March 31, 2020		Quoted Prices In     Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Unobservable  Inputs (Level 3)
Assets:
Cash equivalents	$	6,304	$	6,304	$	—	$	—
Total assets measured and recorded at fair value	$	6,304	$	6,304	$	—	$	—
Liabilities:
Warrant liability	$	17	$	—	$	—	$	17
Contingent consideration	5,050		—		—		5,050
Total liabilities measured and recorded at fair value	$	5,067	$	—	$	—	$	5,067

Description	December 31, 2019		Quoted Prices In     Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Unobservable  Inputs (Level 3)
Assets:
Cash equivalents	$	7,027	$	7,027	$	—	$	—
Total assets measured and recorded at fair value	$	7,027	$	7,027	$	—	$	—
Liabilities:
Warrant liability	$	52	$	—	$	—	$	52
Contingent consideration	4,912		—		—		4,912
Total liabilities measured and recorded at fair value	$	4,964	$	—	$	—	$	4,964

Reconciliation of Level 3 Liabilities

A reconciliation of the change in the fair value of the contingent consideration liability for the three months endedMarch 31, 2020 is as follows (in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent consideration, December 31, 2019	$	4,912
Change in the estimated fair value of the contingent consideration	138
Contingent consideration, March 31, 2020	$	5,050