10-Q 1 ino-20220331.htm 10-Q ino-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                     TO                     
COMMISSION FILE NO. 001-14888
ino-20220331_g1.jpg
 INOVIO PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 33-0969592
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)

660 W. GERMANTOWN PIKE, SUITE 110
PLYMOUTH MEETING, PA 19462
(Address of principal executive offices)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (267440-4200

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
COMMON STOCK, $0.001 PAR VALUEINONasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes    No  

The number of shares outstanding of the Registrant’s Common Stock, $0.001 par value, was 229,041,114 as of May 9, 2022.



INOVIO PHARMACEUTICALS, INC.
FORM 10-Q

For the Quarterly Period Ended March 31, 2022

INDEX
 





























SUMMARY OF THE MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. These risks are discussed more fully in Item 1A. Risk Factors herein. These risk factors include, but are not limited to, the following:

We have incurred significant losses in recent years, expect to incur significant net losses in the foreseeable future and may never become profitable.
We have limited sources of revenue and our success is dependent on our ability to develop our DNA vaccines, DNA immunotherapies, dMAbs and electroporation equipment.
We will need substantial additional capital to develop our DNA vaccines, DNA immunotherapies and dMAb programs and electroporation delivery technology.
None of our human vaccine candidates or our immunotherapy and DNA encoded monoclonal antibody product candidates have been approved for sale, and we may never develop commercially successful vaccine, immunotherapy or DNA encoded monoclonal antibody products.
We have modified our COVID-19 vaccine strategy to develop our vaccine candidate as a potential heterologous booster for other available vaccines, which will result in new and added risks and may not be successful.
There can be no assurance that our COVID-19 vaccine candidate will ever be granted an Emergency Use Authorization by the FDA or similar authorization by regulatory authorities outside of the United States if we were to decide to apply for such an authorization. The option of seeking an Emergency Use Authorization may no longer exist for our primary vaccine candidates, and if we cannot obtain such authorization or, if granted, it is terminated, we will be unable to sell our vaccine candidate and instead will be required to pursue the biologic licensure process, which is lengthy and expensive.
DNA medicines are a novel approach, and negative perception of the efficacy, safety, or tolerability of any investigational medicines that we develop could adversely affect our ability to conduct our business, advance our investigational medicines, or obtain regulatory approvals.
If we and the contract manufacturers upon whom we rely fail to produce our electroporation devices and product candidates in the volumes that we require on a timely basis, or at all, or fail to comply with their obligations to us or with stringent regulations, we may face delays in the development and commercialization of our electroporation equipment and product candidates.
If we lose or are unable to secure collaborators or partners, or if our collaborators or partners do not apply adequate resources to their relationships with us, our product development and potential for profitability will suffer.
We have agreements with government agencies, which are subject to termination and uncertain future funding.
We are currently subject to litigation and may become subject to additional litigation, which could harm our business, financial condition and reputation.
We face intense and increasing competition and steps taken by of our competitors, such as the introduction of a new, disruptive technology, may impede our ability to successfully commercialize our DNA medicines.
It is difficult and costly to generate and protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.
If we are sued for infringing intellectual property rights of third parties, it will be costly and time-consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.





Part I. Financial Information
Item 1.    Financial Statements
1


INOVIO PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
2022
December 31,
2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$59,009,491 $71,143,778 
Short-term investments301,384,357 330,170,940 
Accounts receivable4,003,680 5,466,850 
Accounts receivable from affiliated entities3,487,116 2,565,194 
Prepaid expenses and other current assets31,946,477 38,836,991 
Prepaid expenses and other current assets from affiliated entities75,772 261,192 
Total current assets399,906,893 448,444,945 
Fixed assets, net16,696,936 17,453,206 
Investment in affiliated entity3,369,068 3,906,796 
Intangible assets, net2,499,585 2,626,355 
Goodwill10,513,371 10,513,371 
Operating lease right-of-use assets11,251,440 11,571,026 
Other assets1,273,795 1,425,794 
Total assets$445,511,088 $495,941,493 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses$38,115,396 $47,644,530 
Accounts payable and accrued expenses due to affiliated entities1,407,386 548,032 
Accrued clinical trial expenses11,827,755 10,326,266 
Deferred revenue15,378 21,628 
Operating lease liability2,672,974 2,603,956 
Grant funding liability5,283,271 4,559,721 
Grant funding liability from affiliated entity37,500 37,500 
Total current liabilities59,359,660 65,741,633 
Deferred revenue, net of current portion60,648 64,361 
Convertible senior notes16,207,864 14,959,647 
Operating lease liability, net of current portion14,765,868 15,459,559 
Deferred tax liabilities32,046 32,046 
Other liabilities 14,826 
Total liabilities90,426,086 96,272,072 
Stockholders’ equity:
Preferred stock  
Common stock226,509 217,382 
Additional paid-in capital1,642,419,819 1,609,589,797 
Accumulated deficit(1,287,103,438)(1,209,855,522)
Accumulated other comprehensive loss(457,888)(282,236)
Total Inovio Pharmaceuticals, Inc. stockholders’ equity355,085,002 399,669,421 
Total liabilities and stockholders’ equity$445,511,088 $495,941,493 

See accompanying notes to unaudited condensed consolidated financial statements.
2


INOVIO PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 Three Months Ended March 31,
 20222021
Revenues:
Revenue under collaborative research and development arrangements$65,895 $39,615 
Revenue under collaborative research and development arrangements with affiliated entities8,842 49,949 
Other revenue124,337 281,556 
Total revenues199,074 371,120 
Operating expenses:
Research and development55,978,611 39,044,418 
General and administrative15,953,458 13,881,194 
Total operating expenses71,932,069 52,925,612 
Loss from operations(71,732,995)(52,554,492)
Other income (expense):
Interest income669,814 769,237 
Interest expense(313,488)(513,034)
Loss on investment in affiliated entities(537,728)(830,475)
Net unrealized loss on available-for-sale equity securities(4,840,641)(847,958)
Other income (expense), net(153,468)8,978 
Net loss before share in net loss of Geneos(76,908,506)(53,967,744)
Share in net loss of Geneos(2,165,213)(434,387)
Net loss(79,073,719)(54,402,131)
Net loss per share
          Basic and diluted$(0.36)$(0.27)
Weighted average number of common shares outstanding
          Basic and diluted218,940,693 202,414,445 

See accompanying notes to unaudited condensed consolidated financial statements.


3



INOVIO PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
 
 Three Months Ended March 31,
 20222021
Net loss$(79,073,719)$(54,402,131)
Other comprehensive income (loss):
     Foreign currency translation (6,555)(14,419)
     Unrealized gain (loss) on short-term investments, net of tax(169,097)4,861 
Comprehensive loss(79,249,371)(54,411,689)

See accompanying notes to unaudited condensed consolidated financial statements.



4


INOVIO PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Three Months Ended March 31, 2022
Preferred stockCommon stock
Number
of shares
AmountNumber
of shares
AmountAdditional
paid-in
capital
Accumulated
deficit
Accumulated
other
comprehensive
income (loss)
Total
stockholders’
equity
Balance at December 31, 20219 $ 217,382,887 $217,382 $1,609,589,797 $(1,209,855,522)$(282,236)$399,669,421 
Cumulative adjustment from adoption of ASU 2020-06— — — — (3,294,019)1,825,803 — (1,468,216)
Issuance of common stock for cash, net of financing costs— — 8,480,483 8,481 29,356,057 — — 29,364,538 
Exercise of stock options for cash and vesting of RSUs, net of tax payments— — 647,350 646 (943,167)— — (942,521)
Stock-based compensation— — — — 7,711,151 — — 7,711,151 
Net loss — — — — — (79,073,719)— (79,073,719)
Unrealized loss on short-term investments, net of tax— — — — — — (169,097)(169,097)
Foreign currency translation— — — — — — (6,555)(6,555)
Balance at March 31, 20229 $ 226,510,720 $226,509 $1,642,419,819 $(1,287,103,438)$(457,888)$355,085,002 
Three Months Ended March 31, 2021
Preferred stockCommon stock
Number
of shares
AmountNumber
of shares
AmountAdditional
paid-in
capital
Accumulated
deficit
Accumulated
other
comprehensive
income (loss)
Total
stockholders’
equity
Balance at December 31, 20209 $ 186,851,493 $186,851 $1,367,406,869 $(906,196,812)$(256,150)$461,140,758 
Issuance of common stock for cash, net of financing costs of $531,000
— 20,355,000 20,355 162,084,675 — — 162,105,030 
Conversion of December 2019 Bonds to common stock— — 1,009,450 1,009 4,376,883 — — 4,377,892 
Exercise of stock options for cash and vesting of RSUs, net of tax payments— — 1,118,093 1,118 (1,202,907)— — (1,201,789)
Stock-based compensation— — — — 9,595,947 — — 9,595,947 
Net loss— — — — — (54,402,131)— (54,402,131)
Unrealized gain on short-term investments— — — — — — 4,861 4,861 
Foreign currency translation— — — — — — (14,419)(14,419)
Balance at March 31, 20219 $ 209,334,036 $209,333 $1,542,261,467 $(960,598,943)$(265,708)$581,606,149 


See accompanying notes to unaudited condensed consolidated financial statements.

5


INOVIO PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
6


 Three Months Ended March 31,
 20222021
Cash flows from operating activities:
Net loss$(79,073,719)$(54,402,131)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation929,383 660,697 
Amortization of intangible assets126,770 136,770 
Amortization of operating lease right-of-use assets319,586 278,290 
Stock-based compensation7,711,151 9,595,947 
Non-cash interest expense(219,999)(31,281)
Amortization of premiums on investments125,810  
Loss on short-term investments318,684 10,151 
Loss on disposal of fixed assets157,666  
Gain on remeasurement of investment in Geneos(165,215) 
Loss on equity investment in affiliated entities537,728 830,475 
Share of net loss in Geneos2,165,213 434,387 
Net unrealized loss on available-for-sale equity securities4,840,641 847,958 
Unrealized transaction loss on foreign-currency denominated debt (176,927)
Changes in operating assets and liabilities:
Accounts receivable, including from affiliated entities541,248 8,804,853 
Prepaid expenses and other current assets, including from affiliated entities7,075,934 (19,108,348)
Other assets151,999 75,514 
Accounts payable and accrued expenses(9,859,913)4,735,352 
Accrued clinical trial expenses1,501,489 (2,579,476)
Accounts payable and accrued expenses due to affiliated entities859,354 125,292 
Deferred revenue, including from affiliated entity(9,963)(72,463)
Operating lease right-of-use assets and liabilities, net(624,673)(558,140)
Grant funding liability, including from affiliated entity723,550 (2,480,826)
Other liabilities(14,826)6,478 
Net cash used in operating activities(61,882,102)(52,867,428)
Cash flows from investing activities:
       Purchases of investments(99,722,697)(275,408,976)
Proceeds from sale or maturity of investments123,055,048 504,464 
Purchases of capital assets (210,824)
Investment in Geneos(1,999,998) 
Net cash provided by (used in) investing activities21,332,353 (275,115,336)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs29,364,538 162,105,030 
Proceeds from stock option exercises83,812 2,632,996 
Taxes paid related to net share settlement of equity awards (1,026,333)(3,834,785)
Net cash provided by financing activities28,422,017 160,903,241 
Effect of exchange rate changes on cash and cash equivalents(6,555)(14,419)
Decrease in cash and cash equivalents(12,134,287)(167,093,942)
Cash and cash equivalents, beginning of period71,143,778 250,728,118 
Cash and cash equivalents, end of period$59,009,491 $83,634,176 
Supplemental disclosures:
Amounts accrued for purchases of fixed assets$330,779 $35,370 
Interest paid$533,487 $544,315 
See accompanying notes to unaudited condensed consolidated financial statements.
7


INOVIO PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Operations
Inovio Pharmaceuticals, Inc. (the “Company” or “INOVIO”), is a biotechnology company focused on bringing to market precisely designed DNA medicines and vaccines to help protect people from infectious diseases, including COVID-19, and to help treat people with cancer and conditions associated with human papillomavirus ("HPV"). INOVIO has shown in clinical trials that its DNA vaccine candidates can be delivered into cells in the body via a proprietary smart device allowing the nucleic-acid delivered gene products to activate functional T cell and antibody responses against targeted pathogens and cancers.
The Company's DNA medicines pipeline is comprised of three types of product candidates: prophylactic DNA vaccines, therapeutic DNA immunotherapies, and DNA encoded monoclonal and bispecific antibodies ("dMAbs" and “dBTAs”), all of which utilize the two components of INOVIO's integrated platform, SynCon® and CELLECTRA®.
The Company's proprietary SynCon® technology creates optimized plasmids, which are circular strands of DNA that instruct a cell to produce proteins or antigens to help the person’s immune system respond with antibodies and immune cells which recognize and then help block viruses and destroy cancerous or pre-cancerous cells.
INOVIO's patented CELLECTRA® smart delivery devices facilitate uptake of its DNA medicines into the cell, which has been a key limitation of historical DNA-based technology approaches. Human clinical trial data from more than 15,000 CELLECTRA® smart device administrations across more than 5,000 participants to date have shown a tolerable safety profile.
INOVIO's corporate strategy is to develop, seek regulatory approval for and commercialize its novel DNA medicines to address unmet global health needs. The Company continues to advance and clinically validate an array of DNA medicine candidates that target infectious diseases, such as COVID-19, as well as HPV-associated diseases and cancer.
The Company's partners and collaborators include ApolloBio Corporation, AstraZeneca, Advaccine Biopharmaceuticals Suzhou Co., The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations ("CEPI"), The U.S. Department of Defense ("DoD"), Defense Advanced Research Projects Agency ("DARPA"), HIV Vaccines Trial Network, the U.S. Defense Threat Reduction Agency’s Medical CBRN Defense Consortium ("MCDC"), International Vaccine Institute ("IVI"), Kaneka Eurogentec, National Cancer Institute, National Institutes of Health, National Institute of Allergy and Infectious Diseases, Ology Bioservices, the Parker Institute for Cancer Immunotherapy, Plumbline Life Sciences, Regeneron Pharmaceuticals, Inc., Richter-Helm BioLogics, Thermo Fisher Scientific, the University of Pennsylvania, the Walter Reed Army Institute of Research and The Wistar Institute.
The Company and its collaborators are currently evaluating the feasibility of, or conducting or planning clinical studies of, DNA medicines for COVID-19, including both homologous and heterologous booster vaccines; Middle East Respiratory Syndrome, or MERS; Lassa fever; Ebola; as well as HPV-associated precancers, including cervical, vulvar, and anal dysplasia; HPV-associated cancers, including head & neck, cervical, anal, penile, vulvar, and vaginal; other HPV-associated disorders, such as recurrent respiratory papillomatosis, or RRP; glioblastoma multiforme, or GBM; and prostate cancer.
INOVIO was incorporated in Delaware in June 2001 and has its principal executive offices in Plymouth Meeting, Pennsylvania.

 
2. Basis of Presentation, Liquidity and Risks and Uncertainties
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Inovio have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) as contained in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss, the condensed consolidated statements of stockholders' equity and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 are unaudited, but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, results of operations, cash flows and changes in stockholders' equity for the periods presented.
The results of operations for the three months ended March 31, 2022 shown herein are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any other period. These unaudited financial statements, and notes thereto, should be read in conjunction with the audited consolidated financial statements for the year
8

ended December 31, 2021, included in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2022. The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
These unaudited condensed consolidated financial statements include the accounts of Inovio Pharmaceuticals, Inc. and its subsidiary. As of March 31, 2022 and December 31, 2021, the Company consolidated its wholly-owned subsidiary Inovio Asia LLC. All intercompany accounts and transactions were eliminated upon consolidation.
Liquidity
The Company incurred a net loss attributable to common stockholders of $79.1 million for the three months ended March 31, 2022. The Company had working capital of $340.5 million and an accumulated deficit of $1.3 billion as of March 31, 2022. The Company has incurred losses in each year since its inception and expects to continue to incur significant expenses and operating losses for the foreseeable future in connection with the research and preclinical and clinical development of its product candidates. The Company’s cash, cash equivalents and short-term investments of $360.4 million as of March 31, 2022 are sufficient to support the Company's planned operations for a period of at least 12 months from the date of issuance of these financial statements.
In order to continue to fund future research and development activities, the Company will need to seek additional capital. This may occur through strategic alliance and licensing arrangements, grant agreements and/or future public or private debt or equity financings including At-the-Market Equity Offering Sales Agreements (“Sales Agreements”). The Company has a history of conducting debt and equity financings, including the receipt of net proceeds of $29.4 million and $47.7 million under a Sales Agreement during the three months ended March 31, 2022 and year ended December 31, 2021, respectively, and $162.1 million from a January 2021 underwritten public offering of common stock. However, sufficient funding may not be available in the future, or if available, may be on terms that significantly dilute or otherwise adversely affect the rights of existing stockholders. If adequate funds are not available, the Company may need to delay, reduce the scope of or put on hold one or more of its clinical and/or preclinical programs.
The Company’s ability to continue its operations is dependent upon its ability to obtain additional capital in the future and achieve profitable operations. The Company expects to continue to rely on outside sources of financing to meet its capital needs and the Company may never achieve positive cash flow. These condensed consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should Inovio be unable to continue as a going concern. The Company's condensed consolidated financial statements as of and for the three months ended March 31, 2022 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business for the foreseeable future. The Company has evaluated subsequent events after the balance sheet date through the date it issued these condensed consolidated financial statements.
The Company is, and from time to time may in the future be, subject to various legal proceedings and claims arising in the ordinary course of business. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. An estimated loss contingency is accrued in the consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal proceedings, including litigation, government investigations and enforcement actions, could result in material costs, occupy significant management resources and entail civil and criminal penalties, even if the Company ultimately prevails. Any of the foregoing consequences could result in serious harm to the Company’s business, results of operations and financial condition.
Risks and Uncertainties
The global pandemic resulting from COVID-19, caused by a novel strain of coronavirus, SARs-CoV-2, has caused national and global economic and financial market disruptions. The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will continue to cause significant disruptions to the global economy, as well as businesses and capital markets around the world.
The Company continues to closely monitor the impact of the COVID-19 pandemic on its employees, collaborators and service providers. The extent to which the pandemic will continue to impact the Company's business and operations will depend on future developments, including travel restrictions to, from and within the United States and other countries, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease, which remain uncertain.

3. Critical Accounting Policies
Collaboration Agreements and Revenue Recognition
9

The Company assesses whether its collaboration agreements are subject to Accounting Standards Codification ("ASC") Topic 808: Collaborative Arrangements (“Topic 808”) based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of Topic 808 and the Company concludes that its collaboration partner is not a customer, the Company presents such payments as a reduction of research and development expense. If payments from the collaboration partner to the Company represent consideration from a customer, then the Company accounts for those payments within the scope of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“Topic 606”).
The Company enters into collaborative arrangements with partners that typically include payment of one or more of the following: (i) license fees; (ii) product supply services; (iii) milestone payments related to the achievement of developmental, regulatory, or commercial goals; and (iv) royalties on net sales of licensed products. At contract inception, the Company assesses the goods or services agreed upon within each contract and assess whether each good or service is distinct and determine those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment of management to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligation. The standalone selling price may include items such as forecasted revenues, development timelines, discount rates and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if it can be satisfied at a point in time or over time. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. Differences in the allocation of the transaction price between delivered and undelivered performance obligations can impact the timing of revenue recognition but do not change the total revenue recognized under any agreement.
For collaboration arrangements that include license fees, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
For collaboration arrangements that include milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. This assessment is based on the Company’s past experience with its collaboration partner, market insight and partner communication. Milestone payments that are not within the Company’s or the collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment and could be material.
For collaboration arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue in the period the underlying sales occur. To date, the Company has not recognized any royalty revenue resulting from any of its collaborative arrangements.
Research and Development Expenses - Clinical Trial Accruals
The Company's activities have largely consisted of research and development efforts related to developing electroporation delivery technologies, DNA vaccines, DNA immunotherapies and dMAbs. For clinical trial expenses, judgements used in estimating accruals rely on estimates of total costs incurred based on participant enrollment, completion of studies and other events. Accrued clinical trial costs are subject to revisions as trials progress. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. Historically, revisions have not resulted in material changes to research and development expense; however a modification in the protocol of a clinical trial or cancellation of a trial could result in a charge to the Company's results of operations.

4. Impact of Recently Issued Accounting Standards
The recent accounting pronouncements below may have a significant effect on the Company's financial statements. Recent accounting pronouncements that are not anticipated to have an impact on or are unrelated to the Company's financial condition, results of operations, or related disclosures are not discussed.
Accounting Standards Recently Adopted
10


ASU No. 2020-06. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the guidance on an issuer’s accounting for convertible instruments and contracts in its own equity. ASU 2020-06 is effective for public entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company adopted ASU 2020-06 as of January 1, 2022 on a modified retrospective basis and recorded a net reduction in accumulated deficit of $1.8 million, a decrease in additional paid-in capital of $3.3 million, and an increase in convertible senior notes of $1.5 million to reflect the impact of the accounting change. The Company derecognized the related deferred tax liabilities of $1.5 million with a corresponding adjustment to the valuation allowance, resulting in no net impact to the cumulative adjustment to retained earnings (see Note 8, "Convertible Debt").
5. Revenue Recognition
During the three months ended March 31, 2022 and 2021, the Company recognized total revenue under collaborative research and development arrangements of $9,000 and $50,000, respectively, from its affiliated entity Plumbline Life Sciences, Inc. ("PLS") and $190,000 and $321,000, respectively, from various other contracts as a result of performance obligations being satisfied. Of the total revenue recognized during the three months ended March 31, 2022, $10,000 was in deferred revenue as of December 31, 2021.

6. Short-term Investments and Fair Value Measurements
The following is a summary of available-for-sale securities as of March 31, 2022 and December 31, 2021:
 As of March 31, 2022
 Contractual
Maturity (in years)
CostGross Unrealized
Gains
Gross Unrealized
Losses
Fair Market Value
Mutual funds---$178,648,717 $ $(6,367,983)$172,280,734 
U.S. treasury securities
Less than 1
84,772,489 200 (108,139)84,664,550 
Commercial paper
Less than 1
39,986,103   39,986,103 
Certificates of deposit
Less than 1
2,976,544 15,136 (333)2,991,347 
U.S. agency mortgage-backed securities*1,551,716  (90,093)1,461,623 
$307,935,569 $15,336 $(6,566,548)$301,384,357 
 As of December 31, 2021
Contractual
Maturity (in years)
CostGross Unrealized
Gains
Gross Unrealized
Losses
Fair Market Value
Mutual funds---$192,966,772 $87,069 $(1,614,411)$191,439,430 
U.S. treasury securities
Less than 1
94,193,441  (9,921)94,183,520 
Commercial paper
Less than 1
39,967,853   39,967,853 
Certificates of deposit
Less than 1
2,976,210 15,618 (338)2,991,490 
U.S. agency mortgage-backed securities*1,608,137 4,508 (23,998)1,588,647 
$331,712,413 $107,195 $(1,648,668)$330,170,940 
*No single maturity date.
During the three months ended March 31, 2022 and 2021, the Company recorded gross realized gain on investments of $20,000 and $0, respectively, and gross realized loss on investments of $339,000 and $10,000, respectively. During the three months ended March 31, 2022 and 2021, the Company recorded net unrealized loss on available-for-sale equity securities of $4.8 million and $848,000, respectively. No material balances were reclassified out of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021. Interest and dividends on investments classified as available-for-sale are included in interest income in the condensed consolidated statements of operations. As of March 31, 2022, the Company had 29 available-for-sale securities in an unrealized loss position, of which 13 with an aggregate total unrealized loss of $2.9 million were in such position for longer than 12 months.
The Company periodically reviews its portfolio of available-for-sale debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For the debt securities where the fair value of the investment is less than the amortized cost basis, the Company has assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on available-for-sale debt securities as of March 31, 2022 were
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primarily due to changes in interest rates, and not due to increased credit risks associated with specific securities. Based on the credit quality of the available-for-sale debt securities that are in an unrealized loss position, and the Company’s estimates of future cash flows to be collected from those securities, the Company believes the unrealized losses are not credit losses. Accordingly, at March 31, 2022, the Company has not recorded an allowance for credit losses related to its available-for-sale debt securities.
The following table presents the Company’s assets that were measured at fair value on a recurring basis, determined using the following inputs as of March 31, 2022:

Fair Value Measurements at
 March 31, 2022
 TotalQuoted Prices
in Active Markets
(Level 1)
Significant
Other Unobservable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Short-term investments
     Mutual funds$172,280,734 $172,280,734 $ $ 
     U.S. treasury securities84,664,550 84,664,550   
     Commercial paper39,986,103  39,986,103  
     Certificates of deposit2,991,347  2,991,347  
     U.S. agency mortgage-backed securities1,461,623  1,461,623  
Total short-term investments301,384,357 256,945,284 44,439,073  
Investment in affiliated entity3,369,068 3,369,068   
Total assets measured at fair value$304,753,425 $260,314,352 $44,439,073 $ 

The following table presents the Company’s assets that were measured at fair value on a recurring basis, determined using the following inputs as of December 31, 2021:
Fair Value Measurements at
 December 31, 2021
 TotalQuoted Prices
in Active Markets
(Level 1)
Significant
Other Unobservable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Short-term investments
     Mutual funds$191,439,430 $191,439,430 $ $ 
     U.S. treasury securities94,183,520 94,183,520   
     Commercial paper39,967,853  39,967,853  
     Certificates of deposit2,991,490  2,991,490  
     U.S. agency mortgage-backed securities1,588,647  1,588,647  
Total short-term investments330,170,940 285,622,950 44,547,990  
Investment in affiliated entity3,906,796 3,906,796   
Total assets measured at fair value$334,077,736 $289,529,746 $44,547,990 $ 

Level 1 assets at March 31, 2022 consisted of mutual funds and U.S. treasury securities held by the Company that are valued at quoted market prices, as well as the Company’s investment in its affiliated entity, PLS. The Company accounts for its investment in 597,808 common shares of PLS based on the closing price of the shares on the Korea New Exchange Market on the applicable balance sheet date. Unrealized gains and losses on the Company's equity securities are reported in the consolidated statement of operations as unrealized gain (loss) on available-for-sale equity securities or as a gain (loss) on investment in affiliated entity.
Level 2 assets at March 31, 2022 consisted of commercial paper, certificates of deposit and U.S. agency mortgage-backed securities held by the Company that are initially valued at the transaction price and subsequently valued, at the end of each reporting period, typically utilizing market observable data. The Company obtains the fair value of its Level 2 assets from a professional pricing service, which may use quoted market prices for identical or comparable instruments, or inputs other than quoted prices that are observable either directly or indirectly. The professional pricing service gathers quoted market prices and
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observable inputs from a variety of industry data providers. The valuation techniques used to measure the fair value of the Company's Level 2 financial instruments were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. The Company validates the quoted market prices provided by the primary pricing service by comparing the service's assessment of the fair values of the Company's investment portfolio balance against the fair values of the Company's investment portfolio balance obtained from an independent source.
There were no Level 3 assets held as of March 31, 2022.

7. Goodwill and Intangible Assets
The following sets forth the goodwill and intangible assets by major asset class:
 
 March 31, 2022December 31, 2021
 Weighted Average Useful
Life
(Yrs)
GrossAccumulated
Amortization
Net Book
Value
GrossAccumulated
Amortization
Net Book
Value
Indefinite lived:
Goodwill$10,513,371 $— $10,513,371 $10,513,371 $— $10,513,371 
Definite lived:
Licenses101,323,761 (1,312,787)10,974 1,323,761 (1,305,600)18,161 
Bioject(a)125,100,000 (2,798,889)2,301,111 5,100,000 (2,735,556)2,364,444 
Other(b)184,050,000 (3,862,500)187,500 4,050,000 (3,806,250)243,750 
Total intangible assets1110,473,761 (7,974,176)2,499,585 10,473,761 (7,847,406)2,626,355 
Total goodwill and intangible assets$20,987,132 $(7,974,176)$13,012,956 $20,987,132 $(7,847,406)$13,139,726 

(a)Bioject intangible assets represent the estimated fair value of developed technology and intellectual property which were recorded from an asset acquisition.
(b)Other intangible assets represent the estimated fair value of acquired intellectual property.
Aggregate amortization expense on intangible assets for the three months ended March 31, 2022 and 2021 was $127,000 and $137,000, respectively. Estimated aggregate amortization expense is $366,000 for the remainder of fiscal year 2022, $276,000 for 2023, $253,000 for 2024, $253,000 for 2025, $253,000 for 2026 and $1.1 million for 2027 and subsequent years combined.

8. Convertible Debt
Convertible Senior Notes
On February 19, 2019 and March 1, 2019, the Company completed a private placement of $78.5 million aggregate principal amount of its 6.50% convertible senior notes due 2024 (the “Notes”). The Notes were sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Net proceeds from the offering were $75.7 million.
The Notes are senior unsecured obligations of the Company and accrue interest payable in cash semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2019, at a rate of 6.50% per annum. The Notes will mature on March 1, 2024, unless earlier converted, redeemed or repurchased. Prior to the close of business on the business day immediately preceding November 1, 2023, the Notes will be convertible at the option of the holders only upon the satisfaction of certain circumstances. Thereafter, the Notes will be convertible at the option of the holders at any time until the close of business on the scheduled trading day immediately before the maturity date. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. The initial conversion rate was 185.8045 shares per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $5.38 per share), subject to adjustment upon the occurrence of specified events.
The Company may redeem all, or any portion, of the Notes for cash if the last reported sale price per share of the Company's common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days (whether or not
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consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such redemption notice. The redemption price will be equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Initially, in accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar debt instruments, which do not have an associated convertible feature. The carrying amount of the equity component representing the conversion option for the Notes was $16.3 million and was recorded as a debt discount, which was being amortized to interest expense at an effective interest rate of 13.1%. In addition, the Company allocated $592,000 of debt issuance costs to the equity component and the remaining debt issuance costs of $2.2 million were allocated to the liability component, which were being amortized to interest expense under the effective interest rate method.
On January 1, 2022, the Company adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which is intended to simplify the accounting for convertible instruments. The ASU eliminates the cash conversion feature models in ASC 470-20, Debt with Conversion and Other Options, which required an issuer of certain convertible debt to separately account for embedded conversion features as a component of equity. Instead, an issuer will account for these securities as a single unit of account, unless the conversion feature meets certain criteria. The Company adopted the new standard using the modified retrospective method, and recorded a net reduction to accumulated deficit of $1.8 million, a decrease to additional paid-in capital of $3.3 million, and an increase to convertible senior notes of $1.5 million to reflect the impact of the accounting change. The Notes are now accounted for as a single liability measured at amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
The balance of the Notes at March 31, 2022 was as follows:
Original principal amount$78,500,000 
Principal amount converted into common shares(62,085,000)
Unamortized debt issuance cost(296,051)
Accrued interest88,915 
     Net carrying amount $16,207,864 

For the three months ended March 31, 2022 and 2021, the Company recognized $313,000 and $463,000, respectively, of interest expense related to the Notes, of which $267,000 and $267,000, respectively, related to the contractual interest coupon.
As of March 31, 2022, future minimum payments due under the Notes, representing contractual amounts due, including interest based on the fixed rate of 6.5% per annum, were as follows:
2022$534,000 
20231,067,000 
202416,948,000 
Total$18,549,000 

December 2019 Convertible Bonds
On December 26, 2019, the Company closed a private placement of convertible promissory notes (the “December 2019 Bonds”) with an aggregate principal amount of 4.7 billion KRW (USD $4.1 million based on the exchange rate on the date of issuance) issued to a Korea-based institutional investor. Net proceeds from the offering were $4.0 million.
The December 2019 Bonds, which were unsecured obligations of the Company, were issued on December 31, 2019 and accrued interest at a coupon rate of 1.00% per annum, payable quarterly. The December 2019 Bonds were scheduled to mature on December 31, 2024, unless earlier converted or repurchased. On March 17, 2021, the December 2019 Bonds were converted in full into an aggregate of 1,009,450 shares of the Company's common stock, leaving no further December 2019 Bonds outstanding. Upon conversion, the $4.4 million carrying value of the December 2019 Bonds was reclassified to stockholders' equity.
The effective interest rate of the December 2019 Bonds was 6.2%. For the three months ended March 31, 2021, the Company recognized $59,000 of interest expense related to the December 2019 Bonds, of which $9,000 related to the contractual interest coupon.
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9. Stockholders’ Equity
The following is a summary of the Company's authorized and issued common and preferred stock as of March 31, 2022 and December 31, 2021:
   Outstanding as of
 AuthorizedIssuedMarch 31, 2022December 31, 2021
Common Stock, par value $0.001 per share
600,000,000 226,510,720 226,510,720 217,382,887 
Series C Preferred Stock, par value $0.001 per share
1,091 1,091 9 9 

Common Stock
On November 9, 2021, the Company entered into an ATM Equity OfferingSM Sales Agreement (the “2021 Sales Agreement”) with outside sales agents (collectively, the “Sales Agents”) for the offer and sale of its common stock for an aggregate offering price of up to $300.0 million. The 2021 Sales Agreement provides that the Sales Agents will be entitled to compensation in an amount equal to up to 3.0% of the gross sales proceeds of any common stock sold through the Sales Agents under the 2021 Sales Agreement. For the three months ended March 31, 2022, the Company sold 8,480,483 shares of its common stock under the 2021 Sales Agreement. The sales were made at a weighted average price of $3.52 per share, resulting in aggregate net proceeds of $29.4 million. As of March 31, 2022 there was $221.8 million of remaining capacity under the 2021 Sales Agreement.
On January 25, 2021, the Company closed an underwritten public offering of 20,355,000 shares of common stock at a public offering price of $8.50 per share. The net proceeds to the Company, after deducting the underwriters' discounts and commissions and other offering expenses, were $162.1 million.
Stock Options and Restricted Stock Units
The Company has a stock-based incentive plan, the 2016 Omnibus Incentive Plan (as amended to date, the "2016 Incentive Plan"), pursuant to which the Company may grant stock options, restricted stock awards, restricted stock units and other stock-based awards or short-term cash incentive awards to employees, directors and consultants.
The 2016 Incentive Plan was originally approved by the Company's stockholders on May 13, 2016, and an amendment to the plan to increase the number of shares available for issuance was approved by the stockholders on May 8, 2019. As of March 31, 2022, the maximum number of shares of the Company’s common stock available for issuance over the term of the 2016 Incentive Plan was 22,000,000 shares. On the first business day of each calendar year, such maximum number of shares shall be increased by 2,000,000 shares of common stock unless the Board determines, prior to January 1 for any such calendar year, to increase such maximum amount by a fewer number of shares or not to increase the maximum amount at all for such year. On January 1, 2022, the maximum number of shares increased by 2,000,000. At March 31, 2022, the Company had 838,641 shares of common stock available for future grant under the 2016 Incentive Plan, 3,491,330 shares underlying outstanding but unvested restricted stock units and options outstanding to purchase 11,701,340 shares of common stock under the 2016 Incentive Plan. The awards granted and available for future grant under the 2016 Incentive Plan generally vest over three years and have a maximum contractual term of ten years. The 2016 Incentive Plan terminates by its terms on March 9, 2026.
The Amended and Restated 2007 Omnibus Incentive Plan (the "2007 Incentive Plan") was adopted on March 31, 2007 and terminated by its terms on March 31, 2017. At March 31, 2022, the Company had options outstanding to purchase 2,395,723 shares of common stock under the 2007 Incentive Plan. The awards granted under the 2007 Incentive Plan generally vest over three years and have a maximum contractual term of ten years.

10. Net Loss Per Share
Basic net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is calculated in accordance with the treasury stock method for the outstanding stock options and restricted stock units and reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock. The dilutive impact of the outstanding Notes issued by the Company (discussed in Note 8) has been considered using the "if-converted" method. The calculation of diluted net loss per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the options or other securities and the presumed exercise of such securities are dilutive to net loss per share for the period, an adjustment to the net loss used in the calculation is required to remove the change in fair value of such securities from the numerator for the period. Likewise, an adjustment to the denominator is required to reflect the related dilutive shares, if any. For the three months ended March 31, 2022 and 2021, basic and diluted net
15


loss per share were the same, as the assumed exercise or settlement of stock options and restricted stock units and the potentially dilutive shares issuable upon conversion of the Notes would have been anti-dilutive.
The following table summarizes potential shares of common stock that were excluded from the diluted net loss per share calculation because of their anti-dilutive effect:
Three Months Ended March 31,
20222021
Options to purchase common stock14,097,063 10,826,472 
Service-based restricted stock units3,491,330 2,610,130 
Performance-based restricted stock units663,353 663,353 
Convertible preferred stock3,309 3,309 
Convertible notes3,049,980 3,049,980 
Total21,305,035 17,153,244 
11. Stock-Based Compensation
The Company incurs stock-based compensation expense related to restricted stock units ("RSUs") and stock options. The fair value of restricted stock is determined by the closing price of the Company's common stock reported on the Nasdaq Global Select Market on the date of grant. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions, including the expected stock price volatility and expected option life. The Company amortizes the fair value of the awards on a straight-line basis over the requisite vesting period of the awards. Expected volatility is based on historical volatility. The expected life of options granted is based on historical expected life. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield is based on the fact that no dividends have been paid historically and none are currently expected to be paid in the foreseeable future. The Company recognizes forfeitures as they occur.
The weighted average assumptions used in the Black-Scholes model for option grants to employees and directors are presented below:
 Three Months Ended March 31,
 20222021
Risk-free interest rate1.88%0.88%
Expected volatility93%92%
Expected life in years5.75.8
Dividend yield

Total employee and director stock-based compensation expense recognized in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 was $7.2 million and $9.2 million, respectively, of which $3.7 million and $5.2 million, respectively, was included in research and development expenses, and $3.5 million and $4.0 million, respectively, was included in general and administrative expenses.
At March 31, 2022, there was $19.8 million of total unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.2 years.
The weighted average grant date fair value per share, calculated using the Black-Scholes option pricing model, was $2.48 and $8.34 for employee and director stock options granted during the three months ended March 31, 2022 and 2021, respectively.
At March 31, 2022, there was $17.1 million of total unrecognized compensation expense related to unvested service-based RSUs, which is expected to be recognized over a weighted-average period of 2.1 years.
The weighted average grant date fair value per share was $3.33 and $11.42 for service-based RSUs granted during the three months ended March 31, 2022 and 2021, respectively.
The fair value of stock options granted to non-employees was estimated using the Black-Scholes pricing model. Total stock-based compensation expense for stock options and RSUs granted to non-employees for the three months ended March 31, 2022 and 2021 was $550,000 and $429,000, respectively.
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On August 28, 2020, the Company granted 663,353 performance-based RSUs to key employees under the 2016 Incentive Plan. The RSUs will vest in two tranches as follows: 50% of the shares in each tranche will vest upon achievement of the predetermined performance milestones and the remaining 50% of the shares in each tranche will vest upon subsequent completion of a one-year service period. The grant date fair value of the performance-based RSUs was $8.0 million based on the grant date closing price per share of $12.06. As of March 31, 2022, the underlying performance milestones of the RSUs were not probable of achievement, and no stock-based compensation expense was recognized for the performance-based RSUs for the three months then ended.

12. Related Party Transactions
Plumbline Life Sciences, Inc.
The Company owned 597,808 shares of common stock in PLS as of March 31, 2022, representing a 18.7% ownership interest, and one of the Company's directors, Dr. David B. Weiner, acts as a consultant to PLS.
Revenue recognized from PLS consists of milestone, license and patent fees. For the three months ended March 31, 2022 and 2021, the Company recognized revenue from PLS of $9,000 and $50,000, respectively. At March 31, 2022 and December 31, 2021, the Company had an accounts receivable balance of $34,000 and $25,000, respectively, related to PLS.
The Wistar Institute
The Company's director Dr. David B. Weiner is a director of the Vaccine Center of The Wistar Institute ("Wistar"). Dr. Weiner is also the Executive Vice President of Wistar.
In March 2016, the Company entered into collaborative research agreements with Wistar for preventive and therapeutic DNA-based immunotherapy applications and products developed by Dr. Weiner and Wistar for the treatment of cancers and infectious diseases. Under the terms of the agreement, the Company reimbursed Wistar for all direct and indirect costs incurred in the conduct of the collaborative research, not to exceed $3.1 million during the five-year term of the agreements. In March 2021, upon expiration of the March 2016 agreements, the Company entered into new collaborative research agreements with Wistar with the same terms. The Company will have the exclusive right to in-license new intellectual property developed under this agreement.
In 2021, the Company entered into collaborative research agreements with Wistar in support of the clinical development of INO-4800. Under the terms of these collaborative research agreements, the Company will reimburse Wistar for all direct and indirect costs incurred in the conduct of the collaborative research, not to exceed $1.9 million during the two-year term of the agreements.
In November 2016, the Company received a $6.1 million sub-grant through Wistar to develop a dMAb against the Zika infection, which was fully funded through December 2021.
The Company is also a collaborator with Wistar on an Integrated Preclinical/Clinical AIDS Vaccine Development grant from the NIAID, with funding through February 2023.
In 2020, the Company received a $10.7 million sub-grant through Wistar, which was amended in 2021 to $13.5 million, for the preclinical development and translational studies of dMAbs as countermeasures for COVID-19, with funding through November 2022. The sub-grant also includes an option for an additional $6.0 million in funding through March 2024, of which $3.3 million has been exercised as of March 31, 2022.
Deferred grant funding recognized from Wistar and recorded as contra-research and development expense is related to work performed by the Company on the research sub-contract agreements. For the three months ended March 31, 2022 and 2021, the Company recorded $1.5 million and $230,000, respectively, as contra-research and development expense from Wistar.
Research and development expenses recorded from Wistar relate primarily to the collaborative research agreements and sub-contract agreements related to Gates and CEPI (see Note 14). Research and development expenses recorded from Wistar for the three months ended March 31, 2022 and 2021 were $181,000 and $318,000, respectively. At March 31, 2022 and December 31, 2021, the Company had an accounts receivable balance of $3.5 million and $2.6 million, respectively, and an accounts payable and accrued liability balance of $1.4 million and $