|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
||
|
|
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Smaller reporting company
|
Emerging growth company |
Item
|
Page
|
|
Part I
|
||
1.
|
1
|
|
1A.
|
28 | |
1B.
|
57 | |
2.
|
57
|
|
3.
|
57 | |
4.
|
59 | |
Part II
|
||
5.
|
60 | |
6.
|
60 | |
7.
|
60 | |
7A.
|
70 | |
8.
|
70 | |
9.
|
70 | |
9A.
|
70 | |
9B.
|
71 | |
9C.
|
71 |
|
Part III
|
||
10.
|
72 | |
11.
|
72 | |
12.
|
72 | |
13.
|
72 | |
14.
|
72 | |
Part IV
|
||
15.
|
73 | |
16.
|
75 | |
76 | ||
F-1
|
• |
If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
|
• |
We expect to incur significant losses for the foreseeable future and may never achieve or maintain profitability.
|
• |
We will require substantial additional capital to fund our operations, and if we fail to obtain the necessary financing, we may not be able to complete the development and commercialization of any of our
product candidates.
|
• |
We face business disruption and related risks resulting from the pandemic of the novel coronavirus (COVID-19), which could have a material adverse effect on our business plan.
|
• |
Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security.
|
• |
We are substantially dependent on the success of our internal development programs and our product pipeline candidates may not successfully complete clinical trials, receive regulatory approval or be
successfully commercialized.
|
• |
Our current or future product candidates may cause undesirable side effects or have other properties when used alone or in combination with other approved products or investigational new drugs that could
halt their clinical development, prevent their marketing approval, limit their commercial potential or result in significant negative consequences.
|
• |
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
|
• |
We face significant competition and if our competitors develop and market products that are more effective, safer or less expensive than the product candidates we develop, our commercial opportunities will
be negatively impacted.
|
• |
We rely, and expect to continue to rely, on third parties to conduct our clinical studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of
such studies.
|
• |
If we are unable to obtain and maintain patent and other intellectual property protection for our products and product candidates, or if the scope of the patent and other intellectual property protection
obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products and product candidates may be adversely affected.
|
ITEM 1. |
Business
|
• |
prior to the Merger, a reverse stock split of its common stock, par value $0.005 per share, at a ratio of one-for-two; and
|
• |
following the Merger, a change in its corporate name from “NTN Buzztime, Inc.” to “Brooklyn ImmunoTherapeutics, Inc.”
|
• |
Advance our product candidate IRX-2 through clinical development. IRX-2 is a human blood cell-derived cytokine therapy being studied for multiple types of cancer,
including squamous cell cancer of the head and neck. Enrollment in the ongoing Phase 2b INSPIRE trial, or the INSPIRE trial, has been completed, with top-line data estimated to be available by the third quarter of 2022.
|
• |
Advance additional studies. Once INSPIRE trial data are released, we plan to use those results as a catalyst in addition to data from the other clinical trials in
the program, see “—Clinical Program” below, with multiple data read-outs anticipated in 2022 and later.
|
• |
Pursue partnerships to advance the IRX-2 clinical program. We are pursuing partnership opportunities with certain leading biopharmaceutical companies for the
development and commercialization of IRX-2.
|
• |
Regulatory strategy. We believe that our assets may present opportunities for potential breakthroughs in the treatment of cancer and other indications. We will
endeavor to seek breakthrough therapy designation with regulatory agencies for IRX-2 for one or more indications.
|
• |
Intellectual Property. We continue to pursue additional intellectual property based on data from our IRX-2 clinical studies.
|
• |
Regimen 1: IRX-2 Regimen with cyclophosphamide, indomethacin, zinc-containing multivitamins, omeprazole and IRX-2 as neoadjuvant and adjuvant therapy.
|
• |
Regimen 2: Regimen 1 with cyclophosphamide, indomethacin, zinc-containing multivitamins, omeprazole but without IRX-2 as neoadjuvant and adjuvant therapy.
|
Agent
|
Dose
|
Route of Administration
|
Treatment Days
|
|||
Cyclophosphamide
|
300 mg/m2
|
IV
|
1
|
|||
IRX-2
|
230 units daily (Bilateral injections of 115 units)
|
Subcutaneous at or near the mastoid insertion of both sternocleidomastoid muscles
|
Any 10 days between Days 4 and 21
|
|||
Indomethacin
|
25 mg TID
|
Oral
|
1-21
|
|||
Zinc-Containing Multivitamins
|
1 tablet containing 15-30 mg of zinc
|
Oral
|
1-21
|
|||
Omeprazole
|
20 mg
|
Oral
|
1-21
|
Agent
|
Dose
|
Route of Administration
|
Treatment Days
|
|||
Cyclophosphamide
|
300 mg/m2
|
IV
|
1
Every 3 months.
|
|||
IRX-2
|
230 units daily (Bilateral injections of 115 units)
|
Subcutaneous into bilateral deltoid regions
|
Any 5 days between Days 4 and 10
Every 3 months.
|
|||
Indomethacin
|
25 mg TID
|
Oral
|
Days 1-10
Every 3 months.
|
|||
Zinc-Containing Multivitamins
|
1 tablet containing 15-30 mg of zinc
|
Oral
|
Days 1-10
Every 3 months.
|
|||
Omeprazole
|
20 mg daily
|
Oral
|
Days 1-10
|
• |
BR-101 - A study involving 16 patients with neoadjuvant breast cancer performed at the Providence Portland Medical Center. Details of this trial can be found at clinicaltrials.gov
(NCT02950259).
|
• |
CIN-201 - An open label single arm Phase 2 trial of the IRX‑2 regimen in women with cervical squamous intraepithelial neoplasia 3 or squamous vulvar intraepithelial neoplasia 3. Details of this trial can be
found at clinicaltrials.gov (NCT03267680).
|
• |
BAS-104 - A basket study originally intended to enroll 100 patients with metastatic bladder, renal, non-small cell lung cancer, or NSCLC, melanoma, and head and neck cancer being held at the Moffitt
Cancer Center, using IRX‑2 in conjunction with Opdivo® (Nivolumab), an immunotherapy cancer treatment marketed by Bristol-Myers Squibb Company. This
trial was discontinued after 11 subjects were enrolled due to insurance reimbursement challenges. Details of this trial can be found on clinicaltrials.gov (NCT03758781).
|
• |
HCC-107 - A study involving 28 patients with metastatic hepatocellular carcinoma, or HCC, being held at City of Hope Medical Center, HonorHealth Research Institute, and Texas Oncology at Baylor
Charles A. Simmons Cancer Center using IRX‑2 in conjunction with Opdivo®, a cancer treatment marketed by Bristol-Myers Squibb Company. Details of
this trial can be found at clinicaltrials.gov (NCT03655002).
|
• |
GI-106 - A study involving 20 patients with metastatic gastric and gastroesophageal junction cancers (GI) being held at City of Hope Medical Center, HonorHealth Research Institute, and Texas Oncology
at Baylor Charles A. Simmons Cancer Center using IRX‑2 in conjunction with Keytruda® (Pembrolizumab), an immunotherapy cancer treatment marketed by
Merck. Details of this trial can be found at clinicaltrials.gov (NCT03918499).
|
• |
MHN-102 - A study involving 15 patients with metastatic head and neck cancer being held at the H. Lee Moffitt Cancer Center and Research Institute and University of Michigan Health System using IRX‑2 in
conjunction with Imfinzi (Durvalumab), a cancer treatment marketed by AstraZeneca plc. Details of this trial can be found at clinicaltrials.gov (NCT03381183).
|
• |
BR-202 - A study involving 30 patients with neoadjuvant triple negative breast cancer, held at the Providence Portland Medical Center using IRX‑2 in conjunction with a programmed cell death protein 1, or
PD1, and chemotherapy treatments. Details of this trial can be found at clinicaltrials.gov (NCT04373031).
|
• |
Charles Cherington, one of our directors and stockholders has a right to receive 4.20% of the Specified Royalty;
|
• |
entities affiliated with George P. Denny III (Denny Family Partners II, LLC, the George P. Denny Trust, and the R. Breck Denny Trust), a former director and current stockholder have a right to receive a
total of 4.39% of the Specified Royalty;
|
• |
an entity affiliated with Nicholas J. Singer (PCI BI LLC), a former director and current stockholder, has a right to receive a total of 2.10% of the Specified Royalty
|
• |
entities affiliated with Yiannis Monovoukas (The Yiannis Monovoukas Family 2013 Revocable Trust FBO Alexi Monovoukas, The Yiannis Monovoukas Family 2013 Revocable Trust FBO Aresti Monovoukas, and The
Yiannis Monovoukas Family 2013 Revocable Trust FBO Christian Monovoukas), a former director and stockholder have a right to receive a total of 1.40% of the Specified Royalty; and;
|
• |
an entity affiliated with John D. Halpern (The John D. Halpern Revocable Trust), one of our stockholders, has a right to receive 3.50% of the Specified Royalty.
|
Summary Description of Patent or Patent Application
|
United States or Foreign
Jurisdiction
|
Earliest Effective Date
of Patent Application
|
||
IRX-2 Modified Manufacturing Process
|
Granted: US (No. 8,470,562), EP (BE, CH, DE, DK, ES, FI, FR, GB, IT, LI, NL, SW), AU, CA, JP, MX, TR
|
US: 4/14/2009
EP: 4/14/2009
|
||
Method of Reversing Immune Suppression of Langerhans Cells
|
Granted: US (Nos. 9,333,238 and 9,931,378), EP (BE, CH, DE, DK, ES, FI, FR, GB, LI, NL), AU, CA
Published: CN, HK
|
US: 6/8/2012 (No. 9,333,238), 4/13/2016 (No. 9,931,378)
EP: 12/8/2010
|
||
Method of Increasing Immunological Effect
|
Granted: US (Nos. 7,993,660 and 8,591,956), EP (BE, CH, DE, DK, ES, FI, FR, GB, IT, LI, NL), AU, CA, JP
Published: HK
|
US: 8/9/2011 (No. 7,993,660), 11/26/2013 (No. 8,591,956)
EP: 11/26/2008
|
||
Vaccine Immunotherapy
|
Granted: US (Nos. 6,162,778, 9,492,517, 9,492,519, 9,539,320 and 9,566,331), EP (BE, CH, DE, DK, ES, FI, FR, GB, IT, LI, NL), AU, CA, HK, JP
|
US: 7/24/2007 (No. 6,162,778), 10/8/2009 (No. 9,492,517), 11/15/2011 (No. 9,539,230), 2/20/2013 (No. 9,566,331), 7/12/2013 (No. 9,492,519)
EP: 5/17/2010
|
||
Immunotherapy for Reversing Immune Suppression
|
Granted: US (No. 7,731,945), AU
|
US: 10/26/2002
|
||
Vaccine Immunotherapy for Immune Suppressed Patients
|
Granted: US (Patent Nos. 6,977,072, 7,153,499, 8,784,796, 9,789,172 and 9,789,173), CA, JP
|
US: 10/26/2001 (No. 6,977,072), 5/5/2003 (No. 7,153,499), 7/12/2013 (No. 8,784,796), 6/4/2014 (Nos. 9,789,172 and 9,789,173)
|
||
Immunotherapy for Immune Suppressed Patients
|
Granted: EP (BE, CH, DE, ES, FR, GB, IT, NL, LI)
|
EP: 3/9/2007
|
||
Composition for the Treatment of Advanced Prostate Cancer
|
Granted: CA
Published: EP, HK
|
|||
Uses of PD-1/PD-L1 Inhibitors and/or CTLA-4 Inhibitors with a Biologic Containing Multiple Cytokine Components
|
Pending: AU, CA, EP, IL, JP, KR, NZ, PH, SG, US
Published: BR, CN, EA, IN, MX, ZA
|
US – United States of America
EP – European Patent Convention
BE – Belgium
CH – Switzerland
DE – Germany
DK – Denmark
ES – Spain
FI – Finland
GB – Great Britain
IT – Italy
LI – Lichtenstein
NL – Netherlands
SW – Sweden
AU – Australia
BR - Brazil
CA – Canada
CN – Peoples’ Republic of China
EA – Eurasian Patent Organization
HK – Hong Kong
IL – Israel
IN - India
JP – Japan
KR – Republic of Korea (South Korea)
MX – Mexico
PH – Philippines
SG - Singapore
TR – Turkey
ZA – South Africa
|
• |
IRX-2 Modified Manufacturing Process - A method of making a primary cell derived biologic, including the steps of: (a) removing contaminating cells from mononuclear cells (“MNCs”) by loading leukocytes onto
lymphocyte separation medium (“LSM”), and washing and centrifuging the medium with an automated cell processing and washing system; (b) storing the MNCs overnight in a closed sterile bag system; (c) stimulating the MNCs with a mitogen and
ciprofloxacin in a disposable cell culture system to produce cytokines; (d) removing the mitogen from the mononuclear cells by filtering; (e) incubating the filtered MNCs in a culture medium; (f) producing a clarified supernatant by
filtering the MNCs from the culture medium; (g) producing a chromatographed supernatant by removing DNA from the clarified supernatant by anion exchange chromatography; and (h) removing viruses from the chromatographed supernatant by
filtering with dual 15 nanometer filters in series, thereby producing a primary cell derived biologic, wherein the primary cell derived biologic comprises IL-1.beta., IL-2, and IFN-.gamma.
|
• |
Method of Reversing Immune Suppression of Langerhans Cells - A method of treating human papillomavirus (“HPV”), by administering a therapeutically effective amount of a primary cell-derived biologic to a
patient infected with HPV and inducing an immune response to HPV. A method of overcoming HPV-induced immune suppression of Langerhans cells (“LC”), by administering a therapeutically effective amount of a primary cell-derived biologic to
a patient infected with HPV and activating LC. A method of increasing LC migration towards lymph nodes, by administering a therapeutically effective amount of a primary cell-derived biologic to a patient infected with HPV, activating LC,
and inducing LC migration towards lymph nodes. A method of generating immunity against HPV, by administering an effective amount of a primary cell derived biologic to a patient infected with HPV, generating immunity against HPV, and
preventing new lesions from developing.
|
• |
Method of Increasing Immunological Effect - A method of increasing immunological effect in a patient by administering an effective amount of a primary cell derived biologic to the patient, inducing immune
production, blocking immune destruction, and increasing immunological effect in the patient. Methods of treating an immune target, treating a tumor, immune prophylaxis, and preventing tumor escape.
|
• |
Vaccine Immunotherapy/Composition for the Treatment of Advanced Prostate Cancer – A method providing compositions and methods of immunotherapy to treat cancer or other antigen-producing diseases or lesions.
According to one embodiment of the invention, a composition is provided for eliciting an immune response to at least one antigen in a patient having an antigen-producing disease or lesion, the composition comprising an effective amount of
a cytokine mixture, preferably comprising IL-1, IL-2, IL-6, IL-8, IFN-gamma. (gamma) and TNF- alpha (alpha). The cytokine mixture acts as an adjuvant with the antigen associated with the antigen-producing disease or lesion to enhance the
immune response of the patient to the antigen. Methods are therefore also provided for eliciting an immune response to at least one antigen in a patient having an antigen-producing disease or lesion utilizing the cytokine mixture of the
invention. The compositions and methods are useful in the treatment of antigen-producing diseases such as cancer, infectious diseases or persistent lesions.
|
• |
Vaccine Immunotherapy for Immune Suppressed Patients - A method for overcoming mild to moderate immune suppression includes the steps of inducing production of naive T-cells and restoring T-cell immunity. A
method of vaccine immunotherapy includes the steps of inducing production of naive T-cells and exposing the naive T-cells to endogenous or exogenous antigens at an appropriate site. Additionally, a method for unblocking immunization at a
regional lymph node includes the steps of promoting differentiation and maturation of immature dendritic cells at a regional lymph node and allowing presentation of processed peptides by resulting mature dendritic cells, thus, for
example, exposing tumor peptides to T-cells to gain immunization of the T-cells. Further, a method of treating cancer and other persistent lesions includes the steps of administering an effective amount of a natural cytokine mixture as an
adjuvant to endogenous or exogenous administered antigen to the cancer or other persistent lesions.
|
• |
Immunotherapy for Immune Suppressed Patients – A method providing compositions of a natural cytokine mixture (“NCM”) for treating a cellular immunodeficiency characterized by T lymphocytopenia, one or more
dendritic cell functional defects such as those associated with lymph node sinus histiocytosis, and/or one or more monocyte functional defects such as those associated with a negative skin test to NCM. The invention includes methods of
treating these cellular immunodeficiences using the NCM of the invention. The compositions and methods are useful in the treatment of diseases associated with cellular immunodeficiencies such as cancer. Also provided are compositions and
methods for reversing tumor-induced immune suppression comprising a chemical inhibitor and a non-steroidal anti-inflammatory drug (“NSAID”). The invention also provides a diagnostic skin test comprising NCM for predicting treatment
outcome in cancer patients.
|
● |
completion of pre-clinical laboratory tests, animal studies and formulation studies according to the FDA’s good laboratory practice, or GLP, regulations;
|
● |
submission of an investigational new drug application, or IND, which must become effective before human clinical trials may begin and which must include approval by an institutional review board, or IRB, at
each clinical site before the trials are initiated;
|
● |
performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal regulations and good
clinical practice, or GCP, an international standard meant to protect the rights and health of human clinical trial subjects and to define the roles of clinical trial sponsors, administrators, and monitors;
|
● |
submission to, and acceptance by, the FDA of a MA;
|
● |
satisfactory completion of an FDA inspection of our manufacturing facility or other facilities at which the drug or biologic is produced to assess compliance with current good manufacturing practice, or
cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
|
● |
potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the MA: and
|
● |
FDA review and approval of the MA.
|
● |
Phase 1 clinical trials involve the initial introduction of the drug or biologic into human subjects. These studies are designed to determine the safety of usually single doses of the compound and determine
any dose limiting intolerance, as well as evidence of the metabolism and pharmacokinetics of the drug in humans. For some products for severe or life-threatening diseases, especially if the product may be too toxic to administer to
healthy humans, the initial clinical trials may be conducted in individuals having a specific disease for which use the tested product is indicated.
|
● |
Phase 2 clinical trials usually involve studies in a limited patient population to evaluate the safety and efficacy of the drug or biologic for specific, targeted indications, to determine dosage tolerance
and optimal dosage, and to identify possible adverse effects and safety risks.
|
● |
In Phase 3, if a compound is found to be potentially effective and to have an acceptable safety profile in Phase 2 (or occasionally Phase 1) studies, the Phase 3 studies will be conducted to further confirm
clinical efficacy, optimal dosage and safety within an expanded population which may involve geographically diverse clinical trial sites. Generally, but not always, two adequate and well-controlled Phase 3 clinical trials are required by
the FDA for approval of a marketing application.
|
● |
Phase 4 clinical trials are studies required of or agreed to by a sponsor that are conducted after the FDA has approved a product for marketing. These studies are used to gain additional experience from the
treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical
trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement. Failure to promptly conduct Phase 4 clinical trials where
necessary could result in withdrawal of approval for products approved under accelerated approval regulations.
|
● |
controls on government-funded reimbursement for drugs;
|
● |
mandatory rebates or additional charges to manufacturers for their products to be covered on Medicare Part D formularies;
|
● |
controls on healthcare providers;
|
● |
controls on pricing of pharmaceutical products, including the possible reference of the pricing of United States drugs to non-United States drug pricing for the same product;
|
● |
challenges to the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means;
|
● |
reform of drug importation laws;
|
● |
entering into contractual agreements with payors; and
|
● |
expansion of use of managed-care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person
|
● |
potential product candidates may, upon further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval
and achieve market acceptance;
|
● |
potential product candidates may not be effective in treating their targeted diseases; or
|
● |
the acquisition or in-licensing transactions can entail numerous operational and functional risks, including exposure to unknown liabilities, disruption of our business, or incurrence of substantial debt or
dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected acquisition or integration costs.
|
● |
multiple conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other
governmental approvals, permits and licenses;
|
● |
failure by us or our collaborators to obtain appropriate licenses or regulatory approvals for the sale or use of IRX-2 or any other product candidate we may acquire or in license;
|
● |
difficulties in managing foreign operations;
|
● |
complexities associated with managing multiple payor-reimbursement regimes or self-pay systems;
|
● |
financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to foreign currency exchange rate fluctuations;
|
● |
reduced protection for intellectual property rights;
|
● |
natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and
|
● |
failure to comply with the United States Foreign Corrupt Practices Act, or FCPA, including its books and records provisions and its anti-bribery provisions, the United Kingdom Bribery Act 2010, or U.K.
Bribery Act, and similar anti-bribery and anti-corruption laws in other jurisdictions, for example by failing to maintain accurate information and control over sales or distributors’ activities.
|
● |
the timing, progress, costs and results of our INSPIRE trial for the treatment of squamous cell cancer of the head and neck;
|
● |
the costs of any other clinical trials we may initiate, including the costs to conduct the study and to produce the supply of product that may be required for our own studies or for investigator-sponsored
studies;
|
● |
the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
|
● |
the cost of filing, prosecuting, defending and enforcing its patent claims and other intellectual property rights;
|
● |
the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against it or any of its current or future product candidates;
|
● |
the effect of competing market developments;
|
● |
the cost and timing of completion of commercial-scale manufacturing activities;
|
● |
the cost of establishing sales, marketing and distribution capabilities for our products in regions where we choose to commercialize our products on our own; and
|
● |
the initiation, progress, timing and results of the commercialization of our product candidates, if approved for commercial sale.
|
● |
successfully complete pre-clinical studies and clinical trials deemed adequate by regulatory authorities and obtain and maintain regulatory approval for the marketing of our product candidates;
|
● |
receive regulatory approvals from the FDA, the EMA and other similar regulatory authorities;
|
● |
establish and maintain collaborations with third parties for the development and/or commercialization of our product candidates, or otherwise build and maintain strong development, sales, distribution and
marketing capabilities that are sufficient to develop products and launch commercial sales of any approved products, including establishing sales, marketing and distribution systems for our product candidates;
|
● |
obtain coverage and adequate reimbursement from payors such as government health care systems, pharmacy benefit managers, and insurance companies and achieve commercially attractive levels of pricing;
|
● |
secure acceptance of our product candidates from physicians, health care payors, patients and the medical community;
|
● |
produce, through a validated process, in manufacturing facilities inspected and approved by regulatory authorities, including the FDA, sufficiently large quantities of our product candidates to permit
successful commercialization;
|
● |
manage our spending as expenses increase due to government mandated post-approval clinical trials and commercialization;
|
● |
obtain and enforce sufficient intellectual property rights for any approved products and product candidates, maintain, expand and protect our intellectual property portfolio;
|
● |
add operational, financial, and management information systems; personnel, including personnel to support its clinical, manufacturing and planned future commercialization efforts and operations as a public
company;
|
● |
conduct internal or contract manufacturing meeting specifications and in compliance with applicable cGMPs; and
|
● |
initiate and continue relationships with third-party suppliers and manufacturers or continue to further develop our own manufacturing capabilities and have commercial quantities of our product candidates
manufactured at acceptable cost and quality levels and in compliance with the FDA and other regulatory requirements.
|
● |
preclinical studies and clinical trials are long, expensive and unpredictable processes that can be subject to extensive delays;
|
● |
we cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all;
|
● |
it may take several years and require significant expenditures to complete the preclinical studies and clinical trials necessary to commercialize a product candidate, and delays or failure are inherently
unpredictable and can occur at any stage.
|
● |
we may also be required to conduct additional clinical trials or other testing of our product candidates beyond the trials and testing that we contemplate, which may lead to us incurring additional
unplanned costs or result in delays in clinical development;
|
● |
we may be required to redesign or otherwise modify our plans with respect to an ongoing or planned clinical trial and changing the design of a clinical trial can be expensive and time consuming; and
|
● |
an unfavorable outcome in one or more trials would be a major setback for our product candidates and for us. It may require us to delay, reduce the scope of or eliminate one or more product development
programs, which could have a material adverse effect on our business, financial position, results of operations and future growth prospects.
|
● |
We may not be able to demonstrate that any product candidate is safe or effective as a treatment for any of our currently or future targeted indications to the satisfaction of the FDA or other relevant
regulatory authorities.
|
● |
The relevant regulatory authorities may require additional pre-approval studies or clinical trials which would increase our costs and prolong development timelines or could grant conditional approval with a
requirement to perform additional studies at a significant cost.
|
● |
The results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatory authorities for marketing approval.
|
● |
The FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials, including the design of its future pivotal Phase 3 clinical
trials.
|
● |
Contract Research Organizations (“CROs”) that we may retain to conduct clinical trials may take actions outside of our control, or otherwise commit errors or violations of protocols, that adversely impact
our clinical trials and ability to obtain market approvals.
|
● |
The FDA or other relevant regulatory authorities may not find the data from nonclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of these products outweigh
their safety risks.
|
● |
The FDA or other relevant regulatory authorities may disagree with our interpretation of data or significance of results from the nonclinical studies and clinical trials of IRX - 2 or any other product
candidate we may acquire or in-license or may require that it conduct additional studies.
|
● |
The FDA or other relevant regulatory authorities may not accept data generated from our clinical trial sites.
|
● |
If our MA or other foreign application is reviewed by an advisory committee, the FDA or other relevant regulatory authority, may have difficulties scheduling an advisory committee meeting in a timely manner
or the advisory committee may recommend against approval of such application or may recommend that the FDA or other relevant regulatory authority require, as a condition of approval, additional nonclinical studies or clinical trials,
limitations on approved labeling or distribution and use restrictions.
|
● |
The FDA or other relevant regulatory authorities may require development of a REMS, or its equivalent, as a condition of approval.
|
● |
The FDA or other relevant regulatory authorities may require additional post-marketing studies and/or a patient registry, which would be costly.
|
● |
The FDA or other relevant regulatory authorities may find the chemistry, manufacturing and controls data insufficient to support the quality of IRX - 2 or any other product candidate we may acquire or
in-license.
|
● |
The FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturer or our own manufacturing processes or facilities.
|
● |
The FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.
|
● |
a product candidate is ineffective or inferior to existing approved products for the same indications;
|
● |
patients may die or suffer adverse effects for reasons that may or may not be related to the product candidate being tested;
|
● |
a product candidate causes or is associated with unacceptable toxicity or has unacceptable side effects;
|
● |
the results may not confirm the positive results of earlier trials;
|
● |
we are unable to manufacture sufficient quantities of stable and qualified materials under cGMP for use in clinical studies;
|
● |
we fail to recruit a sufficient number of patients or we have slower than expected rates of patient recruitment;
|
● |
modification of clinical study protocols is necessary;
|
● |
there may be changes in regulatory requirements for clinical studies;
|
● |
there is a lack of effectiveness during clinical studies;
|
● |
there is an emergence of unforeseen safety issues;
|
● |
there may be delays, suspension, or termination of the clinical studies due to the IRB responsible for overseeing the study at a particular study site;
|
● |
there could be government or regulatory delays or “clinical holds” requiring suspension or termination of the studies; and
|
● |
our collaborators may be unable or unwilling to perform under their contracts.
|
● |
size of the patient population and process for identifying subjects;
|
● |
design of the trial protocol;
|
● |
eligibility and exclusion criteria;
|
● |
safety profile, to date, of the product candidate under study;
|
● |
perceived risks and benefits of the product candidate under study;
|
● |
perceived risks and benefits of our approach to treatment of diseases;
|
● |
availability of competing therapies and clinical trials;
|
● |
severity of the disease under investigation;
|
● |
degree of progression of the subject’s disease at the time of enrollment;
|
● |
proximity and availability of clinical trial sites for prospective subjects;
|
● |
ability to obtain and maintain subject consent;
|
● |
risks that enrolled patients will drop out before completion of the trial;
|
● |
patient referral services of physicians; and
|
● |
ability to monitor subjects adequately during and after treatment.
|
● |
decreased demand for our product candidates;
|
● |
injury to our reputation;
|
● |
withdrawal of clinical trial participants;
|
● |
costs to defend the related litigation;
|
● |
a diversion of management’s time and its resources;
|
● |
substantial monetary awards to trial participants or patients;
|
● |
product recalls, withdrawals or labeling, marketing or promotional restrictions;
|
● |
the inability to commercialize our product candidates; and
|
● |
a decline in the value of the common stock.
|
● |
regulatory authorities may withdraw their approval of the product or seize the product;
|
● |
we, or any collaborators, may need to recall the product, or be required to change the way the product is administered or conduct additional clinical trials;
|
● |
additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product;
|
● |
we may be subject to fines, injunctions or the imposition of civil or criminal penalties;
|
● |
regulatory authorities may require the addition of labeling statements, such as a boxed warning or a contraindication;
|
● |
we, or any collaborators, may be required to create a medication guide outlining the risks of the previously unidentified side effects for distribution to patients;
|
● |
we, or any collaborators, could be sued and held liable for harm caused to patients;
|
● |
the product may become less competitive; and
|
● |
our reputation may suffer.
|
● |
the demand for our product candidates, if we obtain regulatory approval;
|
● |
our ability to set a price that we believe is fair for our products;
|
● |
our ability to generate revenue and achieve or maintain profitability;
|
● |
the level of taxes that we are required to pay; and
|
● |
the availability of capital.
|
● |
the inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
|
● |
the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future product that we may develop;
|
● |
the lack of complementary treatments to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
|
● |
unforeseen costs and expenses associated with creating an independent sales and marketing organization.
|
● |
the potential efficacy and potential advantages over alternative treatments;
|
● |
the frequency and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;
|
● |
the frequency and severity of any side effects resulting from follow-up requirements for the administration of our product candidates;
|
● |
the relative convenience and ease of administration;
|
● |
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
|
● |
the strength of marketing and distribution support and timing of market introduction of competitive products;
|
● |
formulary acceptance;
|
● |
publicity concerning our products or competing products and treatments; and
|
● |
sufficient third-party insurance coverage and adequate reimbursement.
|
● |
collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
|
● |
collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on preclinical or clinical
study results, changes in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities;
|
● |
collaborators may delay clinical studies, provide insufficient funding for a clinical study program, stop a clinical study or abandon a product candidate, repeat or conduct new clinical studies or require a
new formulation of a product candidate for clinical testing;
|
● |
collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are
more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
|
● |
collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;
|
● |
collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate its
intellectual property or proprietary information or expose it to potential litigation;
|
● |
collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
|
● |
disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or
arbitration that diverts management attention and resources; and
|
● |
collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
|
ITEM 1B. |
Unresolved Staff Comments
|
ITEM 2. |
Properties
|
ITEM 3. |
Legal Proceedings
|
ITEM 4. |
Mine Safety Disclosures
|
ITEM 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
ITEM 6. |
[Reserved]
|
ITEM 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
prior to the Merger, a reverse stock split of its common stock, par value $0.005 per share, at a ratio of one-for-two; and
|
• |
following the Merger, a change in its corporate name from “NTN Buzztime, Inc.” to “Brooklyn ImmunoTherapeutics, Inc.”
|
Years Ended December 31,
|
Change
|
% Change
|
||||||||||||||
|
2021
|
2020
|
||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
$ |
12,705,000
|
$ |
3,951,000
|
$ |
8,754,000
|
$ |
222
|
%
|
|||||||
Acquired in-process research and development
|
80,538,000
|
-
|
80,538,000
|
N/A
|
||||||||||||
General and administrative
|
14,724,000
|
3,297,000
|
11,427,000
|
347
|
%
|
|||||||||||
Transaction costs
|
5,765,000
|
-
|
5,765,000
|
N/A
|
||||||||||||
Change in fair value of contingent consideration
|
(180,000
|
)
|
19,240,000
|
(19,420,000
|
)
|
-101
|
%
|
|||||||||
Total operating expenses
|
113,552,000
|
26,488,000
|
87,064,000
|
329
|
%
|
|||||||||||
|
||||||||||||||||
Loss from operations
|
(113,552,000
|
)
|
(26,488,000
|
)
|
(87,064,000
|
)
|
329
|
%
|
||||||||
|
||||||||||||||||
Other expenses:
|
||||||||||||||||
Loss on sale of NTN assets
|
(9,648,000
|
)
|
-
|
(9,648,000
|
)
|
N/A
|
||||||||||
Other income (expense), net
|
899,000
|
(43,000
|
)
|
942,000
|
-2191
|
%
|
||||||||||
Total other expense
|
(8,749,000
|
)
|
(43,000
|
)
|
(8,706,000
|
)
|
20247
|
%
|
||||||||
Loss before income taxes
|
(122,301,000
|
)
|
(26,531,000
|
)
|
(95,770,000
|
)
|
361
|
%
|
||||||||
Provision for income taxes
|
(5,000
|
)
|
-
|
(5,000
|
)
|
N/A
|
||||||||||
|
||||||||||||||||
Net loss
|
(122,306,000
|
)
|
(26,531,000
|
)
|
(95,775,000
|
)
|
361
|
%
|
||||||||
|
||||||||||||||||
Series A preferred stock dividend
|
(16,000
|
)
|
-
|
(16,000
|
)
|
N/A
|
||||||||||
|
||||||||||||||||
Net loss attributable to common stockholders
|
$
|
(122,322,000
|
)
|
$
|
(26,531,000
|
)
|
$
|
(95,791,000
|
)
|
361
|
%
|
|
Years Ended December 31
|
|||||||||||||||
|
2021
|
2020
|
Change
|
% Change
|
||||||||||||
License fees
|
$
|
6,500,000
|
$
|
-
|
$
|
6,500,000
|
N/A
|
|||||||||
Stock-based compensation
|
1,597,000
|
-
|
1,597,000
|
N/A
|
||||||||||||
Clinical trials
|
1,292,000
|
412,000
|
880,000
|
214
|
%
|
|||||||||||
Payroll-related
|
2,342,000
|
1,985,000
|
357,000
|
18
|
%
|
|||||||||||
Other expenses, net
|
974,000
|
1,554,000
|
(580,000
|
)
|
-37
|
%
|
||||||||||
Total research and development expenses
|
$
|
12,705,000
|
$
|
3,951,000
|
$
|
8,754,000
|
222
|
%
|
|
Years Ended December 31
|
|||||||||||||||
|
2021
|
2020
|
Change
|
% Change
|
||||||||||||
Professional fees
|
$
|
7,351,000
|
$
|
2,352,000
|
$
|
4,999,000
|
213
|
%
|
||||||||
Stock-based compensation
|
3,638,000
|
91,000
|
3,547,000
|
3898
|
%
|
|||||||||||
Payroll-related
|
1,299,000
|
(98,000
|
)
|
1,397,000
|
-1426
|
%
|
||||||||||
Insurance
|
1,134,000
|
122,000
|
1,012,000
|
830
|
%
|
|||||||||||
Other expenses, net
|
1,302,000
|
830,000
|
472,000
|
57
|
%
|
|||||||||||
Total general and administrative expenses
|
$
|
14,724,000
|
$
|
3,297,000
|
$
|
11,427,000
|
347
|
%
|
Years Ended December 31
|
||||||||||||||||
|
2021
|
2020
|
Change
|
% Change
|
||||||||||||
Employer retention tax credit
|
$
|
664,000
|
$
|
664,000
|
N/A
|
|||||||||||
Income from Brooklyn PPP loan forgiveness
|
310,000
|
-
|
310,000
|
N/A
|
||||||||||||
Other expenses, net
|
(1,000
|
)
|
-
|
(1,000
|
)
|
N/A
|
||||||||||
Interest expense, net
|
(74,000
|
)
|
(43,000
|
)
|
(31,000
|
)
|
72
|
%
|
||||||||
Total other income (expense), net
|
$
|
899,000
|
$
|
(43,000
|
)
|
$
|
942,000
|
-2191
|
%
|
• |
the scope, rate of progress and cost of our clinical trials and other product development activities;
|
• |
future clinical trial results;
|
• |
the terms and timing of any collaborative, licensing and other agreements that we may establish;
|
• |
the cost and timing of regulatory approvals;
|
• |
the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products;
|
• |
the cost and timing of establishing sales, marketing and distribution capabilities;
|
• |
the effect of competition and market developments; and
|
• |
the cost of filing and potentially prosecuting, defending and enforcing any patent claims and other intellectual property rights.
|
• |
Level 1 Inputs – Valued based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
|
• |
Level 2 Inputs – Valued based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for
similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest
rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
|
• |
Level 3 Inputs – Valued based on inputs for which there is little or no market value, which require the reporting entity to develop its own assumptions.
|
ITEM 7A. |
Quantitative and Qualitative Disclosures about Market Risk
|
ITEM 8. |
Financial Statements and Supplementary Data
|
ITEM 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
ITEM 9A. |
Controls and Procedures
|
• |
hiring additional accounting personnel in a number, and with experience, to allow for proper segregation of duties; and
|
• |
developing and implementing, and then monitoring the effectiveness of, written policies and procedures required to achieve our financial reporting objectives in a timely manner, including policies and
procedures relating to internal control over financial reporting.
|
ITEM 9B. |
Other Information
|
ITEM 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
|
ITEM 15. |
Exhibits, Financial Statement Schedules
|
Exhibit
|
Description
|
Incorporated By Reference
|
||
Agreement and Plan of Merger and Reorganization, dated August 12, 2020, among NTN Buzztime, Inc., BIT Merger Sub, Inc. and Brooklyn Immunotherapeutics LLC
|
Annex A to the proxy statement/prospectus/consent solicitation statement forming a part of the S-4 Registration Statement filed on January 20, 2021
|
|||
Agreement and Plan of Acquisition, dated as of July 16, 2021, by and among Brooklyn ImmunoTherapeutics, Inc., Brooklyn Acquisition Sub, Inc., Novellus LLC, Novellus, Inc., and the Sellers’ Representative.
|
Exhibit to Form 8-K filed on July 19, 2021
|
|||
Restated Certificate of Incorporation
|
Exhibit to Form 10-Q filed on August 14, 2013
|
|||
Certificate of Amendment to the Restated Certificate of Incorporation (reverse/forward split)
|
Exhibit to Form 8-K filed on June 17, 2016
|
|||
Certificate of Decrease of the Series A Convertible Preferred Stock
|
Exhibit to Form 8-K filed on April 12, 2017
|
|||
Certificate of Amendment to the Restated Certificate of Incorporation (decrease in authorized capital stock)
|
Exhibit to Form 8-K filed on June 9, 2017
|
|||
Certificate of Amendment to Restated Certificate of Amendment, dated March 25, 2021 (Reverse Stock Split)
|
Exhibit to Form 8-K filed on March 31, 2021
|
|||
Certificate of Amendment to Restated Certificate of Amendment, dated March 25, 2021 (Authorized Share Increase)
|
Exhibit to Form 8-K filed on March 31, 2021
|
|||
Certificate of Amendment to Restated Certificate of Amendment, dated March 25, 2021 (Name Change)
|
Exhibit to Form 8-K filed on March 31, 2021
|
|||
Certificate of Validation of Brooklyn ImmunoTherapeutics, Inc., as filed with the Secretary of State of the State of Delaware on September 3, 2021
|
Exhibit to Form 8-K filed on September 13, 2021
|
|||
Amended and Restated Bylaws of Brooklyn ImmunoTherapeutics, Inc.
|
Exhibit to Form 8-K filed on September 23, 2021
|
|||
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
|
Filed herewith
|
|||
Registration Rights Agreement, dated as of April 26, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Lincoln Park Capital Fund, LLC
|
Exhibit to Form 8-K filed on April 30, 2021
|
|||
Registration Rights Agreement, dated as of May 26, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Lincoln Park Capital Fund, LLC
|
Exhibit to Form 8-K filed on May 26, 2021
|
|||
Registration Rights Agreement, dated as of July 16, 2021, by and among Brooklyn ImmunoTherapeutics, Inc. and the individuals and entities named therein.
|
Exhibit to Form 8-K filed on July 19, 2021
|
|||
Amended and Restated Royalty Agreement and Distribution Agreement, dated March 22, 2021.
|
Exhibit to Form 8-K filed on March 31, 2021
|
|||
10.5(a)
|
Assignment and Assumption of Employment Agreement dated March 30, 2021 among Brooklyn ImmunoTherapeutics, LLC, Brooklyn ImmunoTherapeutics, Inc. and Ronald Guido.
|
Exhibit to Form 8-K filed on March 31, 2021
|
10.6(a)
|
Assignment and Assumption of Employment Agreement dated March 30, 2021 among Brooklyn ImmunoTherapeutics, LLC, Brooklyn ImmunoTherapeutics, Inc. and Lynn Sadowski Mason.
|
Exhibit to Form 8-K filed on March 31, 2021
|
||
10.7(a)
|
Executive Employment Agreement, dated as of April 1, 2021 and effective as of April 16, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Howard J. Federoff.
|
Exhibit to Form 8-K filed on April 7, 2021
|
||
10.8(a)
|
Executive Employment Agreement, dated as of June 5, 2021 and effective as of June 28, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Kevin D’Amour.
|
Exhibit to Form 8-K filed on June 10, 2021
|
||
10.9(a)
|
Executive Employment Agreement, dated as of June 16, 2021 and effective as of June 21, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Sandra Gurrola.
|
Exhibit to Form 8-K filed on June 21, 2021
|
||
10.10(a)
|
Executive Employment Agreement, dated as of July 6, 2021 and effective as of July 15, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Jay Sial.
|
Exhibit to Form 8-K filed on July 19, 2021
|
||
10.11(a)
|
Executive Employment Agreement, effective as of September 20, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Roger Sidhu.
|
Exhibit to Form 8-K filed on September 23, 2021
|
||
Form of Indemnification Agreement
|
Exhibit to Form 8-K filed on April 16, 2021
|
|||
Purchase Agreement, dated as of April 26, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Lincoln Park Capital Fund, LLC
|
Exhibit to Form 8-K filed on April 30, 2021
|
|||
Purchase Agreement, dated as of May 26, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Lincoln Park Capital Fund, LLC
|
Exhibit to Form 8-K filed on May 26, 2021
|
|||
Exclusive License Agreement, dated as of April 26, 2021, between Factor Bioscience Limited, Novellus Therapeutics Limited and Brooklyn ImmunoTherapeutics LLC
|
Exhibit to Form 8-K filed on April 30, 2021
|
|||
10.16(a)
|
Brooklyn ImmunoTherapeutics, Inc. 2021 Inducement Stock Incentive Plan
|
Exhibit to Form 8-K filed on May 26, 2021
|
||
10.17(a)
|
Brooklyn ImmunoTherapeutics, Inc. Restated 2020 Stock Incentive Plan
|
Exhibit to Form 8-K filed on September 13, 2021
|
||
10.18(c)
|
Lease Agreement, made as of September 28, 2015, between Biobat, Inc. and IRX Therapeutics, LLC
|
Exhibit to Form S-4/A filed on November 25, 2020
|
||
First Amendment to Lease Agreement, dated September 28, 2015
|
Exhibit to Form S-4/A filed on November 25, 2020
|
|||
10.20(c)
|
Assignment and Assumption of Lease, made by and between IRX Therapeutics, LLC and Brooklyn, and consented to by Biobat, Inc., as landlord
|
Exhibit to Form S-4/A filed on November 25, 2020
|
||
Second Amendment to Lease Agreement, dated July 24, 2019
|
Exhibit to Form S-4/A filed on November 25, 2020
|
|||
10.22(c)
|
Sublease Agreement, dated April 18, 2019, between Brooklyn and Nezu Asia Capital Management, LLC
|
Exhibit to Form S-4/A filed on November 25, 2020
|
||
Consent to Sublease and Agreement, dated as of May 18, 2019, among 654 Madison Avenue Associates LP, Brooklyn, and Nezu Asia Capital Management, LLC
|
Exhibit to Form S-4/A filed on November 25, 2020
|
|||
Commencement Date Confirmation Agreement, made as of June 27, 2019, among Brooklyn and Nezu Asia Capital Management, LLC.
|
Exhibit to Form S-4/A filed on November 25, 2020
|
|||
Lease Agreement dated June 15, 2021 between Brooklyn ImmunoTherapeutics, Inc. and Fairlane Columbia, LLC
|
Filed herewith
|
|||
Subsidiaries of the Company.
|
Filed herewith.
|
|||
Consent of the Independent Registered Accounting Firm.
|
Filed herewith
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
|||
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
|||
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
|||
Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
|||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
Filed herewith
|
||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
Filed herewith
|
||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed herewith
|
||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
Filed herewith
|
||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
Filed herewith
|
||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed herewith
|
||
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
(a) |
Indicates management contract or compensatory plan.
|
(b) |
Pursuant to Item 601(b)(2) of Regulation S-K, portions of this exhibit have been omitted because the Company customarily and actually treats the omitted portions as private or confidential, and such
portions are not material and would likely cause competitive harm to the Company if publicly disclosed. The Company will supplementally provide a copy of an unredacted copy of this exhibit to the U.S. Securities and Exchange Commission or
its staff upon request.
|
(c) |
Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
ITEM 16. |
Form 10-K Summary
|
BROOKLYN IMMUNOTHERAPEUTICS, INC.
|
||
Date: April 15, 2022
|
By:
|
/s/ Howard J. Federoff |
Howard J. Federoff
|
||
Chief Executive Officer and President
(Principal Executive Officer)
|
Name
|
Title
|
Date
|
||
/s/ Howard J. Federoff |
Chief Executive Officer, President and Member of the Board (Principal Executive Officer)
|
April 15, 2022
|
||
Howard J. Federoff
|
||||
/s/ Sandra Gurrola |
Vice President of Finance (Principal Financial and Accounting Officer)
|
April 15, 2022
|
||
Sandra Gurrola
|
||||
/s/ Charles Cherington |
Chairman of the Board
|
April 15, 2022
|
||
Charles Cherington
|
||||
/s/ Dennis H. Langer |
Member of the Board
|
April 15, 2022
|
||
Dennis H. Langer
|
||||
/s/ Erich Mohr |
Member of the Board
|
April 15, 2022
|
||
Erich Mohr
|
||||
/s/ Heather B. Redman |
Member of the Board
|
April 15, 2022
|
||
Heather B. Redman
|
||||
/s/ Erin S. Enright |
Member of the Board
|
April 15, 2022
|
||
Erin S. Enright
|
Page
|
|
F-2
|
|
Consolidated Financial Statements:
|
|
|
|
F-3
|
|
|
|
F-4
|
|
|
|
F-5
|
|
F-6
|
|
F-7
|
•
|
We obtained an understanding of management’s process in regards to the methodology used and the factors considered around the inputs, sources of data used and assumptions and estimates made in
determining the fair value of contingent consideration, including those over management’s review of its third-party specialist valuation report.
|
•
|
We tested the completeness and accuracy of the data used in the discounted cash flow model.
|
•
|
We evaluated the appropriateness of the discounted cash flow model.
|
•
|
We performed a sensitivity analysis on the discount rate used in the discounted cash flow model to determine the impact rate changes could have on the fair value.
|
December 31,
2021
|
December 31,
2020
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
|
$
|
|
||||
Accounts receivable
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Right-of-use assets - operating leases
|
|
|
||||||
Goodwill
|
|
|
||||||
In-process research and development
|
|
|
||||||
Investment in minority interest
|
|
|
||||||
Security deposits and other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ AND MEMBERS’ EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Loans payable
|
|
|
||||||
PPP loan, current
|
|
|
||||||
Operating lease liabilities, current
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Contingent consideration
|
|
|
||||||
Operating lease liabilities, non-current
|
|
|
||||||
PPP loan, non-current
|
|
|
||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders’ and members’ equity (deficit):
|
||||||||
Class A membership units
|
|
|
||||||
Class B membership units
|
|
|
||||||
Class C membership units
|
|
|
||||||
Common units
|
|
|
||||||
Series A preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ and members’ equity (deficit)
|
|
(
|
)
|
|||||
Total liabilities and stockholders’ and members’ equity (deficit)
|
$
|
|
$
|
|
Years ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Operating expenses:
|
||||||||
Research and development
|
$
|
|
$
|
|
||||
Acquired in-process research and development
|
|
|
||||||
General and administrative
|
|
|
||||||
Transaction costs
|
|
|
||||||
Change in fair value of contingent consideration
|
(
|
)
|
|
|||||
Total operating expenses
|
|
|
||||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||
Other expenses:
|
||||||||
Loss on sale of NTN assets
|
(
|
)
|
|
|||||
Other income (expense), net
|
|
(
|
)
|
|||||
Total other expenses, net
|
(
|
)
|
(
|
)
|
||||
Loss before income taxes
|
( |
) | ( |
) | ||||
Provision for income taxes
|
( |
) | ||||||
Net loss
|
(
|
)
|
(
|
)
|
||||
Series A preferred stock dividend
|
(
|
)
|
|
|||||
Net loss attributable to common stockholders
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net loss per common share - basic and diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Weighted average shares outstanding - basic and diluted
|
|
|
Membership Equity
|
Common Stock
|
Series A
Preferred Stock
|
Additional
Paid-in |
Accumulated
|
||||||||||||||||||||||||||||||||||||||||
Class A
|
Class B
|
Class C
|
Common
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||||||||||||||||
Balances at January 1, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||||||||||
Brooklyn rights offerings membership units
|
|
|
|
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Elimination of Brooklyn’s historical members’ equity
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||||
Common stock to be retained by NTN stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Issuance of Series A preferred stock retained
by NTN stockholders
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||
Issuance of common stock to Brooklyn members
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||
Issuance of common stock to Financial Advisor upon
consummation of merger
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Issuance of common stock from the exercise of
stock options
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Issuance of common stock related to stock purchase
agreement with Lincoln Park Capital Fund, LLC, net
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Issuance of common stock in connection with
the acquisition of Novellus, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Cash dividends to Series A preferred stockholders
|
|
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||
Issuance of common stock in lieu of cash
dividend to Series A preferred stockholders
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||||||||||||||
Forfeiture of unvested restricted stock
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
Stock based compensation
|
|
|
|
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Net loss
|
|
|
|
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||
Balances at December 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Membership Equity
|
Accumulated
|
|||||||||||||||||||||||
Class A
|
Class B
|
Class C
|
Common
|
Deficit
|
Total
|
|||||||||||||||||||
Balances at January 1, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||
Implementation of new accounting principle
|
|
|
|
|
|
|
||||||||||||||||||
Stock based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Sale of members’ equity
|
|
|
|
|
|
|
||||||||||||||||||
Net loss
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balances at December 31, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
For years ended
December 31,
|
||||||||
2021
|
2020
|
|||||||
Cash flows used in operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Amortization of right-to-use asset
|
|
|
||||||
Transaction costs - shares to Financial Advisor
|
|
|
||||||
Loss on sale of NTN assets
|
|
|
||||||
Loss on disposal of fixed assets
|
|
|
||||||
Gain on forgiveness of PPP loan
|
(
|
)
|
|
|||||
Acquired in-process research and development
|
|
|
||||||
Change in fair value of contingent consideration
|
(
|
)
|
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Account receivable
|
(
|
)
|
|
|||||
Prepaid expenses and other current assets
|
(
|
)
|
(
|
)
|
||||
Security deposits and other non-current assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable and accrued expenses
|
(
|
)
|
(
|
)
|
||||
Operating lease liability
|
(
|
)
|
|
|||||
Other liabilities
|
|
|
||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows used in investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Purchase of NTN, net of cash acquired
|
|
|
||||||
Purchase of Novellus, net of common stock issued and cash acquired
|
(
|
)
|
|
|||||
Proceeds from the sale of NTN assets, net of cash disposed
|
|
|
||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows provided by financing activities:
|
||||||||
Net proceeds of common stock issued to Lincoln Park
|
|
|
||||||
Proceeds from sale of members’ equity
|
|
|
||||||
Proceeds from the exercise of stock options
|
|
|
||||||
Proceeds from loans payable
|
|
|
||||||
Repayment of NTN’s PPP loan
|
(
|
)
|
|
|||||
Principal payments on notes payable
|
(
|
)
|
|
|||||
Dividends paid to Series A preferred shareholders
|
(
|
)
|
|
|||||
Net cash provided by financing activities
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
|
$
|
|
||||
Income taxes
|
$
|
|
$
|
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Issuance of common stock for Series A preferred stock dividend
|
$
|
|
$
|
|
||||
Issuance of common stock for business combination
|
$
|
|
$
|
|
||||
Issuance of common Stock for Novellus acquisition
|
$
|
|
$
|
|
||||
Forfeiture of unvested restricted stock
|
$
|
|
$
|
|
||||
Preferred shares issued in connection with reverse merger
|
$
|
|
$
|
|
||||
Initial measurement of ROU assets, net of tenant improvement allowance
|
$
|
|
$
|
|
||||
Initial measurement of operating lease liabilities
|
$
|
|
$
|
|
||||
Investor deposits for sale of members’ equity
|
$
|
|
$
|
|
||||
Right of use assets obtained in exchange for new operating lease liabilities
|
$
|
|
$
|
|
1) |
Organization and Description of Business Operations
|
2) |
Liquidity and Capital Resources
|
3) |
Basis of Accounting Presentation and Summary of Significant Accounting Policies
|
4) |
Merger, Disposition and Acquisition Transactions
|
Historical
Balance
Sheet of
Brooklyn at
March 25, 2020
|
Fair Value
Adjustment
to Brooklyn
Pre-Merger
Assets
|
Purchase
Price
Allocation Pro
Forma
Adjustment
|
||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Accounts receivable
|
|
|
|
|||||||||
Prepaid expense and other current assets
|
|
|
|
|||||||||
Property and equipment, net
|
|
|
|
|||||||||
Software development costs
|
|
(
|
)
|
|
||||||||
Customers
|
|
|
|
|||||||||
Trade name
|
|
|
|
|||||||||
Accounts payable, accrued liabilities and other current liabilities
|
(
|
)
|
|
(
|
)
|
|||||||
Net assets acquired, excluding goodwill
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Total consideration
|
$
|
|
||||||||||
Net assets acquired, excluding goodwill
|
(
|
)
|
||||||||||
Goodwill
|
$
|
|
Proceeds from sale:
|
||||
Cash
|
$
|
|
||
Escrow
|
|
|||
Assume advance/loans
|
|
|||
Interest on advance/loans
|
|
|||
Carrying value of assets sold:
|
||||
Cash and cash equivalents
|
(
|
)
|
||
Accounts receivable
|
(
|
)
|
||
Prepaids and other current assets
|
(
|
)
|
||
Property and equipment, net
|
(
|
)
|
||
Software development costs
|
(
|
)
|
||
Customers
|
(
|
)
|
||
Trade name
|
(
|
)
|
||
Goodwill
|
(
|
)
|
||
Other assets
|
(
|
)
|
||
Liabilities transferred upon sale:
|
||||
Accounts payable and accrued expenses
|
|
|||
Obligations under finance leases
|
|
|||
Lease liability
|
|
|||
Deferred revenue
|
|
|||
Other current liabilities
|
|
|||
Transaction costs
|
(
|
)
|
||
Total loss on sale of assets
|
$
|
(
|
)
|
Years ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Net loss attributable to common stockholders
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Basic and diluted net loss per share attributable to common stockholders
|
$
|
(
|
)
|
$
|
(
|
)
|
Fair Value of
Consideration
|
||||
Cash paid
|
$
|
|
||
Cash acquired
|
(
|
)
|
||
Unrestricted shares
|
|
|||
Restricted shares
|
|
|||
Total fair value of consideration paid
|
|
|||
Less amount of cash paid for NoveCite investment
|
(
|
)
|
||
Fair value of IPR&D acquired
|
$
|
|
5) |
Fair Value of Financial Instruments
|
As of December 31, 2021
|
||||||||||||
Description
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Liabilities:
|
||||||||||||
Contingent consideration
|
|
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
As of December 31, 2020
|
||||||||||||
Description
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Liabilities:
|
||||||||||||
Contingent consideration
|
|
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
Year ended
December 31, 2021
|
||||
Balance as of beginning of period
|
$
|
|
||
Fair value adjustments included in operating expenses
|
(
|
)
|
||
Balance as of end of period
|
$
|
|
6) |
Property and Equipment
|
December 31,
|
||||||||
2021
|
2020
|
|||||||
Laboratory and manufacturing equipment
|
$
|
|
$
|
|
||||
Leasehold improvements
|
|
|
||||||
Computer equipment
|
|
|
||||||
|
|
|||||||
Less: accumulated depreciation and amortization
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
7) |
Leases
|
Years ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Operating lease expense
|
$
|
|
$
|
|
||||
Sublease income
|
(
|
)
|
(
|
)
|
||||
Variable lease expense
|
|
|
||||||
Total lease expense
|
$
|
|
$
|
|
Operating Lease
ROU Assets
|
||||
Operating lease ROU assets at January 1, 2021
|
$
|
|
||
Amortization of operating lease ROU assets
|
(
|
)
|
||
Addition of operating lease ROU assets
|
|
|||
Operating lease ROU assets at December 31, 2021
|
$
|
|
Operating Lease
Liabilities
|
||||
Operating lease liabilities at January 1, 2021
|
$
|
|
||
Principal payments on operating lease liabilities
|
(
|
)
|
||
Addition of operating lease liabilities
|
|
|||
Operating lease liabilities at December 31, 2021
|
|
|||
Less non-current portion
|
|
|||
Current portion at December 31, 2021
|
$
|
|
As of
December 31
|
||||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
Total operating lease liabilities
|
$
|
|
As of
December 31,
2021
|
||||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
$
|
|
8) |
Goodwill and In-Process Research & Development
|
9) |
Accrued Expenses
|
As of December 31,
|
||||||||
2021
|
2020
|
|||||||
Accrued compensation
|
$
|
|
$
|
|
||||
Accrued research and development expenses
|
|
|
||||||
Accrued general and administrative expenses
|
|
|
||||||
Accrued interest
|
|
|
||||||
Total accrued expenses
|
$
|
|
$
|
|
10) |
Debt
|
11) |
Commitments and Contingencies
|
12) |
Basic and Diluted Earnings per Common Share
|
|
Year ended
December 31, 2021
|
|
||
Stock options
|
|
|
|
|
RSUs
|
|
|
|
|
Preferred stock converted into common stock
|
|
|
|
|
Total potential common shares excluded from computation
|
|
|
|
13) |
Stock-Based Compensation
|
Year ended
December 31, 2021
|
||||
Weighted average risk-free rate
|
|
%
|
||
Weighted average volatility
|
|
%
|
||
Dividend yield
|
|
%
|
||
Expected term
|
Outstanding
Options
|
Weighted
Average
Exercise
Price per Share
|
Weighted
Average
Remaining
Contractual
Life (in years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding January 1, 2021
|
|
$
|
|
-
|
$
|
|
||||||||||
Granted
|
|
|
|
|
||||||||||||
Outstanding December 31, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Options vested and exercisable at December 31, 2021
|
|
$
|
|
-
|
$
|
|
Outstanding
Restricted
Stock Units
|
Weighted
Average Fair
Value per Share
|
|||||||
January 1, 2021
|
|
$
|
|
|||||
Granted
|
|
|
||||||
December 31, 2021
|
|
$
|
|
|||||
Balance expected to vest at December 31, 2021
|
|
14) |
Stockholders’ and Members’ Equity (Deficit)
|
1. |
If the Company (a) pays a dividend or makes a distribution in shares of its common stock, (b) subdivides its outstanding shares of common stock into a greater number of shares, (c) combines its outstanding
shares of common stock into a smaller number of shares, or (d) issues by reclassification of its shares of common stock any shares of its common stock (other than a change in par value, or from par value to no par value, or from no par
value to par value), then the conversion rate in effect immediately prior to the applicable event will be adjusted so that the holders of the Series A Convertible Preferred Stock will be entitled to receive the number of shares of common
stock which they would have owned or have been entitled to receive immediately following the happening of the event, had the Series A Convertible Preferred Stock been converted immediately prior to the record or effective date of the
applicable event.
|
2. |
If the outstanding shares of the Company’s common stock are reclassified (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a
subdivision, combination or stock dividend), or if the Company consolidates with or merge into another corporation and the Company is not the surviving entity, or if the Company sells all or substantially all of its property, assets,
business and goodwill, then the holders of the Series A Convertible Preferred Stock will thereafter be entitled upon conversion to the kind and amount of shares of stock or other equity securities, or other property or assets which would
have been receivable by such holders upon such reclassification, consolidation, merger or sale, if the Series A Convertible Preferred Stock had been converted immediately prior thereto.
|
3. |
If the Company issues common stock without consideration or for a consideration per share less than the then applicable Equivalent Preference Amount (as defined below), then the Equivalent Preference Amount
will immediately be reduced to the amount determined by dividing (A) an amount equal to the sum of (1) the number of shares of common stock outstanding immediately prior to such issuance multiplied by the Equivalent Preference Amount in
effect immediately prior to such issuance and (2) the consideration, if any, received by the Company upon such issuance, by (B) the total number of shares of common stock outstanding immediately after such issuance. The “Equivalent
Preference Amount” is the value that results when the liquidation preference of one share of Series A Convertible Preferred Stock (which is $1.00) is multiplied by the conversion rate in effect at that time; thus the conversion rate
applicable after the adjustment in the Equivalent Preference Amount as described herein will be the figure that results when the adjusted Equivalent Preference Amount is divided by the liquidation preference of one share of Series A
Convertible Preferred Stock.
|
15) |
Income Taxes
|
|
Years ended December 31,
|
|||||||
|
2021
|
2020
|
||||||
Domestic
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Foreign
|
(
|
)
|
|
|||||
Total tax provision for income taxes
|
$
|
(
|
)
|
$
|
(
|
)
|
Years ended December 31,
|
||||||||
2021
|
2020
|
|||||||
Current Tax Provision
|
||||||||
Federal
|
$
|
|
$
|
|
||||
State
|
|
|
||||||
Foreign
|
||||||||
Deferred Tax Provision
|
||||||||
Federal
|
(
|
)
|
|
|||||
State
|
( |
) |
(
|
)
|
||||
Foreign
|
( |
) |
|
|||||
( |
) | ( |
) | |||||
Change in valuation allowance
|
|
|||||||
Total tax provision for income taxes
|
$
|
|
$
|
|
|
As of December 31,
|
|||||||
|
2021
|
2020
|
||||||
Deferred Tax Assets:
|
||||||||
Net operating losses
|
|
|
||||||
Foreign net operating losses
|
|
|
||||||
R&D credit carryforwards
|
|
|
||||||
Stock compensation
|
|
|
||||||
Vacation accrual
|
|
|
||||||
Contingent consideration
|
|
|
||||||
Deferred rent
|
|
|
||||||
Total gross deferred tax assets
|
|
|
||||||
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Net deferred tax assets
|
|
|
||||||
|
||||||||
Deferred Tax Liabilities:
|
||||||||
Fixed assets
|
(
|
)
|
|
|||||
Intangibles - goodwill
|
(
|
)
|
|
|||||
Total deferred tax liabilities
|
(
|
)
|
|
|||||
Net deferred taxes
|
$
|
|
$
|
|
As of December 31,
|
||||||||
2021 | 2020 | |||||||
Tax at federal income tax rate
|
|
%
|
% | |||||
State income tax, net of federal tax
|
|
|||||||
Non-deductible expenses/excludable items
|
(
|
)
|
||||||
Pass-through loss |
( |
) | ||||||
Change in valuation allowance
|
(
|
)
|
( |
) | ||||
Credits
|
|
|||||||
Other
|
(
|
)
|
||||||
Provision for income taxes
|
|
% |
% |
16) |
Retirement Savings Plan
|
17) |
Subsequent Events
|