lvtx-ex991

		Three Months Ended June 30,						Six Months Ended June 30,
	Notes	2021			2020			2021			2020
Revenue
Research and license revenue	6	€	897		€	592		€	1,818		€	592
Total revenue			897			592			1,818			592
Operating expenses:
Research and development	7		(4,506	)		(3,074	)		(20,245	)		(6,010	)
General and administrative	8		(1,858	)		(672	)		(3,273	)		(1,353	)
Total operating expenses			(6,364	)		(3,746	)		(23,518	)		(7,363	)

Operating loss			(5,467	)		(3,154	)		(21,700	)		(6,771	)
Interest expense, net			(156	)		(57	)		(264	)		(108	)
Foreign currency exchange loss, net			(136	)		(261	)		(347	)		(268	)
Total non-operating expenses			(292	)		(318	)		(611	)		(376	)

Loss before income tax			(5,759	)		(3,472	)		(22,311	)		(7,147	)
Income tax (expense) benefit			(25	)		3			(47	)		—
Net loss		€	(5,784	)	€	(3,469	)	€	(22,358	)	€	(7,147	)
Foreign currency translation adjustment			(893	)		—			(404	)		—
Total comprehensive loss		€	(6,677	)	€	(3,469	)	€	(22,762	)	€	(7,147	)
Net loss per share
Net loss per share, basic and diluted		€	(0.23	)	€	(7.75	)	€	(1.64	)	€	(15.97	)
Weighted average common shares outstanding, basic and diluted			25,523,501			447,525			13,641,062			447,525

		June 30,			December 31,
	Notes	2021			2020
		(unaudited)
Assets
Non-current assets
Property and equipment, net		€	923		€	906
Right-of-use assets			236			311
Deferred tax assets			15			—
Non-current assets and security deposits			612			626
Total non-current assets			1,786			1,843
Current assets
Trade receivables and other			360			929
Prepaid expenses and other current assets			4,162			95
Deferred offering costs			—			661
VAT receivable			266			274
Cash and cash equivalents			128,354			12,881
Total current assets			133,142			14,840
Total assets		€	134,928		€	16,683
Equity and Liabilities
Equity
Share capital		€	3,093		€	—
Share premium			—			35,159
Equity-settled employee benefits reserve			2,195			801
Foreign currency translation reserve			(751	)		(347	)
Additional paid-in capital			162,813			—
Accumulated deficit			(51,764	)		(29,406	)
Total equity			115,586			6,207
Non-current liabilities
Deferred revenue	6		—			1,480
Lease liabilities			122			221
License liabilities	5		4,437			—
Borrowings			3,262			2,935
Total non-current liabilities			7,821			4,636
Current liabilities
Trade payables and other			1,820			760
Lease liabilities			244			168
License liabilities	5		4,637			—
Accrued expenses and other current liabilities			1,608			1,362
Deferred revenue	6		3,212			3,550
Total current liabilities			11,521			5,840
Total liabilities			19,342			10,476
Total equity and liabilities		€	134,928		€	16,683

		Preference
	Note	Series A shares			Series A Share premium			Series B shares			Series B Share premium			Series C shares			Series C Share premium			Ordinary share shares			Share capital			Equity- settled employee benefits reserves		Foreign currency translation reserve			APIC			Accumulated deficit			Total
Balance at April 1, 2021			—		€	—			—		€	—			—		€	—			25,114,162		€	3,014		€	1,341	€	142		€	154,954		€	(45,980	)	€	113,471
Loss for the period			—			—			—			—			—			—			—			—			—		—			—			(5,784	)		(5,784	)
Issuance of Greenshoe common stock			—			—			—			—			—			—			425,712			51			—		—			4,887			—			4,938
Issuance of VUmc common stock			—			—			—			—			—			—			235,664			28			—		—			2,972			—			3,000
Foreign currency translation adjustment			—			—			—			—			—			—			—			—			—		(893	)		—			—			(893	)
Share-based compensation expense	9		—			—			—			—			—			—			—			—			854		—			—			—			854
Balance at June 30, 2021			—		€	—			—		€	—			—		€	—			25,775,538		€	3,093		€	2,195	€	(751	)	€	162,813		€	(51,764	)	€	115,586

		Preference
	Note	Series A shares			Series A Share premium			Series B shares			Series B Share premium			Series C shares			Series C Share premium			Ordinary share shares			Share capital			Equity- settled employee benefits reserves		Foreign currency translation reserve			APIC			Accumulated deficit			Total
Balance at January 1, 2021			1,037,595		€	629			3,899,766		€	16,001			4,133,805		€	18,529			281,775		€	—		€	801	€	(347	)	€	—		€	(29,406	)	€	6,207
Loss for the period			—			—			—			—			—			—			—			—			—		—			—			(22,358	)		(22,358	)
Share split			—			(124	)		—			(468	)		—			(497	)		—			1,123			—		—			(34	)		—			—
Issuance of Series C preferred shares, net			—			—			—			—			9,945,221			50,581			—			1,193			—		—			—			—			51,774
Repurchase of Series A and common shares			(718,250	)		(349	)		—			—			—			—			(165,750	)		(106	)		—		—			(4,153	)		—			(4,608	)
Conversion of Preference shares			(319,345	)		(156	)		(3,899,766	)		(15,533	)		(14,079,026	)		(68,613	)		18,298,137						—		—			84,302			—			—
Issuance of common stock in initial public offering, net	1,4		—			—			—			—			—			—			6,700,000			804			—		—			74,839			—			75,643
Issuance of Greenshoe common stock			—			—			—			—			—			—			425,712			51			—		—			4,887			—			4,938
Issuance of VUmc common stock			—			—			—			—			—			—			235,664			28			—		—			2,972			—			3,000
Foreign currency translation adjustment			—			—			—			—			—			—			—			—			—		(404	)		—			—			(404	)
Share-based compensation expense	9		—			—			—			—			—			—			—			—			1,394		—			—			—			1,394
Balance at June 30, 2021			—		€	—			—		€	—			—		€	—			25,775,538		€	3,093		€	2,195	€	(751	)	€	162,813		€	(51,764	)	€	115,586

		Preference
	Note	Series A shares		Series A Share premium		Series B shares		Series B Share premium		Series C shares		Series C Share premium		Ordinary share shares		Share capital		Equity- settled employee benefits reserves		Foreign currency translation reserve		APIC		Accumulated deficit			Total
Balance at April 1, 2020			1,755,845	€	1,065		3,899,766	€	16,001		—	€	—		447,525	€	—	€	476	€	—	€	—	€	(15,857	)	€	1,685
Loss for the period			—		—		—		—		—		—		—		—		—		—		—		(3,469	)		(3,469	)
Share-based compensation expense	9		—		—		—		—		—		—		—		—		98		—		—		—			98
Balance at June 30, 2020			1,755,845	€	1,065		3,899,766	€	16,001		—	€	—		447,525	€	—	€	574	€	—	€	—	€	(19,326	)	€	(1,686	)

		Preference
	Note	Series A shares		Series A Share premium		Series B shares		Series B Share premium		Series C shares		Series C Share premium		Ordinary share shares		Share capital		Equity- settled employee benefits reserves		Foreign currency translation reserve		APIC		Accumulated deficit			Total
Balance at January 1, 2020			1,755,845	€	1,065		3,899,766	€	16,001		—	€	—		447,525	€	—	€	324	€	—	€	—	€	(12,179	)	€	5,211
Loss for the period			—		—		—		—		—		—		—		—		—		—		—		(7,147	)		(7,147	)
Share-based compensation expense	9		—		—		—		—		—		—		—		—		250		—		—		—			250
Balance at June 30, 2020			1,755,845	€	1,065		3,899,766	€	16,001		—	€	—		447,525	€	—	€	574	€	—	€	—	€	(19,326	)	€	(1,686	)

		Six Months Ended June 30,
	Notes	2021			2020
Cash flows from operating activities
Loss before income tax		€	(22,311	)	€	(7,147	)
Adjusted for:
Depreciation and amortization of non-current assets			58			81
Foreign currency exchange loss, net			347			268
Non-cash lease amortization			75			90
Share-based compensation expense	9		1,394			250
Income tax expense			(47	)		—
Changes in working capital:
Trade receivables and other			569			(53	)
VAT receivable			8			20
Other assets			(4,064	)		(25	)
Trade accounts payable and other			1,061			824
Deferred revenue	6		(1,818	)		6,805
License liabilities			12,073			—
Other liabilities			247			327
Net cash (used in) provided by operating activities			(12,408	)		1,440
Cash flows from investing activities
Purchase of property and equipment			(76	)		(143	)
Change in restricted cash			—			(1	)
Net cash used in investing activities			(76	)		(144	)
Cash flows from financing activities
Proceeds from common shares from initial public offering, net	1,4		81,242			—
Proceeds from Series C preferred financing, net			51,774			—
Payment of Series A preferred and common shares repurchased			(4,609	)		—
Proceeds from borrowings			327			862
Payment of principal portion of lease liabilities			(23	)		(93	)
Net cash provided by financing activities			128,711			769
Net increase in cash and cash equivalents			116,227			2,065
Cash and cash equivalents at the beginning of year		€	12,881		€	6,544
Effects of exchange rate changes on the balance of cash held in foreign currencies			(754	)		(268	)
Cash and cash equivalents at end of the period		€	128,354		€	8,341
Supplemental schedule of noncash investing and financing activities:
Issuance of 235,664 common shares to VUmc in lieu of payment for license liabilities		€	3,000		€	—

LAVA Therapeutics N.V., together with its subsidiary, is a clinical stage biotechnology company focused on transforming cancer treatment by developing a platform of novel bispecific antibodies engineered to selectively induce gamma-delta T cell mediated immunity against tumor cells. LAVA Therapeutics N.V. was incorporated in 2016 and is headquartered in Utrecht, the Netherlands. Unless the context otherwise requires, references to the “Company,” “we,” “us” and “our” refer to LAVA Therapeutics N.V. and its subsidiary.

On March 29, 2021, the Company completed an initial public offering (“IPO”) of common shares in the United States pursuant to its registration statement on Form F-1, as amended (File No. 333-253795). The common shares are listed for trading under the symbol “LVTX” on The Nasdaq Global Select Market (“Nasdaq”). Pursuant to the registration statement, the Company issued and sold 6,700,000 shares of €0.12 par value common stock at a price of €12.60 or $15.00 per share. Net proceeds from the IPO were approximately €75.5 million ($89.0 million) after deducting underwriting discounts and commissions of €5.9 million ($7.0 million) and offering costs of €3.8 million ($4.5 million). In March 2021, the Company also received €47.2 million in proceeds from the Series C financing, net of repurchasing Series A Preferred and common shares.

On April 19, 2021, underwriters of the Company’s IPO consummated the exercise of their option to purchase 425,712 common shares from the Company at the price of €12.60 or $15.00 per share resulting in additional IPO net proceeds to the Company of €4.9 million ($5.9 million) after deducting underwriting discounts and commissions of €0.3 million ($0.4 million).

In connection with becoming a public company, on March 29, 2021 the Company changed its name from “Lava Therapeutics, B.V.” to “Lava Therapeutics N.V.” The address of the Company’s registered office is Yalelaan 60, 3584 CM Utrecht, the Netherlands.

The Audit Committee of the Company’s Board of Directors approved these unaudited condensed consolidated interim financial statements on August 10, 2021.

The unaudited condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.” Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the years ended December 31, 2020 and 2019 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board, or IASB.

The accounting policies applied are consistent with those of the previous financial year. A description of our accounting policies is provided in the Accounting Policies section of the audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the unaudited condensed consolidated interim financial statements are disclosed in Note 3.

Cash and cash equivalents in the condensed consolidated interim statements of financial position is comprised of cash at banks and on hand and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value.

Our objective in managing our cash resources (cash, cash equivalents and marketable securities) is to preserve principal, achieve liquidity requirements, and safeguard funds. We maintain our cash resources in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and is designed to limit our credit exposure to any single issuer. Cash and cash equivalents include deposits and investments. Marketable securities include commercial paper, treasury bills and securities issued by several public corporations and the Dutch, EU or U.S. Treasury. A minimum of two times the amount of expected monthly cash outflow must be liquid at the beginning of each month. Our invested cash resources

are deployed to achieve our operating objectives in furthering our programs. We are prohibited from borrowing for investment purposes and from engaging in any non-business related investment activity that would be considered speculative according to the principles of conservative investment management.

For the purposes of the condensed consolidated interim statements of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts.

There were no new standards, interpretations, or amendments that became effective in the current reporting period which had an impact on the unaudited condensed consolidated interim financial statements.

In the application of our accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgments made in the process of applying our accounting policies and that have the most significant effect on the amounts recognized in our unaudited condensed consolidated interim financial statements relate to revenue recognition, share-based payments, lease accounting, and to our research and license agreements.

The key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year, primarily relate to recognition of accruals for manufacturing and clinical trial activities. No significant adjustments to accruals have been recognized during the first six months of 2021 or 2020, due to conditions that existed at December 31, 2020, or 2019, respectively. Additionally, there have been no changes to the application of significant accounting estimates, and no impairment losses have been recognized during the first six months of 2021 or 2020.

The unaudited condensed consolidated interim financial statements do not include all disclosures for critical accounting estimates and judgments that are required in the annual consolidated financial statements and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019.

On March 29, 2021, the Company completed an IPO of common shares pursuant to its registration statement on Form F-1, as amended (file 333-253795) under the symbol “LVTX” in the United States on Nasdaq. Pursuant to the registration statement, the Company issued and sold 6,700,000 shares of €0.12 par value common share at a price of €12.60 or $15.00 per share. Net proceeds from the IPO were approximately €75.5 million ($89.0 million) after deducting underwriting discounts and commissions of €5.9 million ($7.0 million) and offering costs of €3.8 million ($4.5 million).

On April 19, 2021, underwriters of the Company’s IPO consummated the exercise of their option to purchase 425,712 common shares from the Company at the price of €12.60 or $15.00 per share resulting in additional IPO proceeds to the Company of €4.9 million ($5.9 million) after deducting underwriting discounts and commissions of €0.3 million ($0.4 million).

On February 25, 2021, the VUmc Agreement was restated, due to the Company’s IPO which triggered a €12.1 million payment (the VUmc payment). The VUmc payment was calculated as the following:

During the three months ended June 30, 2021, the Company issued 235,664 common shares at €12.73 share price representing the €3.0 million in accordance with the VUmc agreement. The remaining part of the VUmc payment, €9.1 million, was recorded as a liability, €4.5 million was classified as non-current liability, and €4.6 million of this liability was classified as a current liability in the unaudited condensed consolidated interim statements of financial position as of June 30, 2021.

In May 2020, the Company entered into the Janssen Agreement. As part of the Janssen Agreement, the Company received a non-refundable upfront payment of €7.4 million, which is being recognized on a straight-line basis over the two-year term of the research activities under agreement. As of June 30, 2021 there was €3.2 million of remaining unearned income related to this payment.

The Company’s deferred revenue balance relates to amounts received, but not yet earned under the Janssen Agreement. The following table presents changes in the deferred revenue balance (in thousands):

Revenue for the six months ended June 30, 2021 and 2020 was €1.8 million and €0.6 million, respectively, which related to the upfront payment. There were no development milestones achieved during the three months ended June 30, 2021.

Research and development expenses for the three and six months ending June 30, 2021 and 2020 were as follows (in thousands):

General and administrative expenses for the three and six months ending June 30, 2021 and 2020 were as follows (in thousands):

As of March 25, 2021, the 2018 Stock Option Plan and the 2020 U.S. Stock Option Plan ceased to have any future shares available, and the Company established the 2021 Long-Term Incentive Option Plan for all its employees, members of the Board of Directors and select external consultants.

There were 2,183,483 stock options outstanding as of June 30, 2021 at a weighted-average exercise price of €3.51 per share. During the six months ended June 30, 2021, 493,938 options were granted to employees and directors at a weighted-average exercise price of €10.60 per share.

Total compensation cost recognized for all stock option awards for the three and six months ending June 30, 2021 and 2020 were as follows (in thousands):

The fair value of the share options has been measured using the Black-Scholes model. The assumptions used in the measurement of the fair values and the weighted average of the share options granted during the six months ended June 30, 2021:

The Company estimates volatility based on the historical volatility of its peer group. The unrecognized remaining stock-based compensation balance for shares issued inside of the Plan was approximately $4.2 million as of June 30, 2021 which is expected to amortize over 1.5 years.

Prepaid expenses as of June 30, 2021 and December 31, 2020 were as follows (in thousands):

The share capital of LAVA Therapeutics N.V. consisted of 25,775,538 outstanding common shares at a nominal value of €0.12 per share as of June 30, 2021.

		Page
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)		2
Condensed Consolidated Interim Statements of Financial Position as of June 30, 2021 and December 31, 2020 (unaudited)		3
Condensed Consolidated Interim Statements of Changes in Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)		4
Condensed Consolidated Interim Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)		5
Notes to the Unaudited Condensed Consolidated Interim Financial Statements		6

Expected annual volatility	80.10%
Expected life, years	6.08
Dividend yield	—
Risk-free interest rate	(0.53%) - (0.62%)
Weighted average grant date fair value	€	7.11

Balance at January 1, 2020	€	—
Deferral of revenue		7,397
Recognized during the period		(2,367	)
Balance at December 31, 2020		5,030
Recognized during the period		(1,818	)
Balance at June 30, 2021	€	3,212

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Pre-clinical and clinical trial expenses	€	2,219	€	2,576	€	4,525	€	4,600
Personnel-related costs		990		287		1,847		650
VUmc license expenses		—		—		12,073		—
Research and development activities expenses		442		84		624		440
Share-based compensation expense		157		38		304		67
Other expenses		698		89		872		253
	€	4,506	€	3,074	€	20,245	€	6,010

	June, 30		December 31,
	2021		2020
Pre-clinical and clinical trial expenses	€	2,179	€	—
Insurance expenses		1,884		—
License fees		40		44
Other expenses		59		51
	€	4,162	€	95