Eterna Therapeutics (ERNA)

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Eterna Therapeutics (ERNA) - 2023 Q1 - Quarterly Report
2023-05-10 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 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 number: 001-11460 Eterna Therapeutics Inc. (Exact name of registrant as specified in its charter) Delaware 31-11034 ...
Eterna Therapeutics (ERNA) - 2022 Q4 - Annual Report
2023-03-19 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 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 Number 1-11460 Eterna Therapeutics Inc. (Exact name of registrant as specified in its charter) Form 10-K (Mark One) Delaware 31-1103425 (State or O ...
Eterna Therapeutics (ERNA) - 2022 Q3 - Quarterly Report
2022-11-14 21:32
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 number: 001-11460 Eterna Therapeutics Inc. (Exact name of registrant as specified in its charter) 10355 Science ...
Eterna Therapeutics (ERNA) - 2022 Q2 - Quarterly Report
2022-08-11 20:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 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 number: 001-11460 Brooklyn ImmunoTherapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware ...
Eterna Therapeutics (ERNA) - 2022 Q1 - Quarterly Report
2022-07-01 01:29
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ 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 number: 001-11460 Brooklyn ImmunoTherapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware ...
Eterna Therapeutics (ERNA) - 2021 Q4 - Annual Report
2022-04-15 21:07
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------------|---------- ...
Eterna Therapeutics (ERNA) - 2021 Q3 - Quarterly Report
2021-11-12 21:55
[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Brooklyn ImmunoTherapeutics, Inc., including the balance sheets, statements of operations, changes in stockholders' and members' equity (deficit), and cash flows, along with detailed notes explaining the company's business, significant transactions (Merger, Disposition, Acquisition), liquidity, accounting policies, and other financial disclosures [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, highlighting significant changes in cash, total assets, and equity over the period **Condensed Consolidated Balance Sheets (Selected Items):** | Item | September 30, 2021 (Unaudited) | December 31, 2020 | | :---------------------------------- | :----------------------------- | :------------------ | | **Assets:** | | | | Cash | $24,381,831 | $1,630,455 | | Total current assets | $25,758,317 | $1,732,777 | | Total assets | $39,394,365 | $13,776,760 | | **Liabilities & Equity (Deficit):** | | | | Total current liabilities | $4,560,541 | $3,125,432 | | Contingent consideration | $19,360,000 | $20,110,000 | | Total liabilities | $26,354,071 | $25,357,623 | | Total stockholders' and members' equity (deficit) | $13,040,294 | $(11,580,863) | - Cash significantly increased from **$1.63 million** at December 31, 2020, to **$24.38 million** at September 30, 2021, reflecting recent financing activities[15](index=15&type=chunk) - Total assets grew from **$13.78 million** to **$39.39 million**, while total stockholders' and members' equity shifted from a deficit of **$11.58 million** to a positive **$13.04 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance, emphasizing the substantial increase in net loss driven by research and development expenses **Condensed Consolidated Statements of Operations (Selected Items):** | Item | Three months ended Sep 30, 2021 | Three months ended Sep 30, 2020 | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :-------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $1,466,652 | $923,529 | $8,379,062 | $2,299,669 | | Acquired in-process research and development | $80,537,551 | - | $80,537,551 | - | | General and administrative | $4,258,178 | $1,084,057 | $10,515,088 | $2,741,652 | | Total operating expenses | $86,332,381 | $2,007,586 | $104,447,108 | $5,041,321 | | Net loss | $(86,055,312) | $(2,020,145) | $(113,842,963) | $(5,072,803) | | Net loss per common share - basic and diluted | $(1.70) | $(0.11) | $(2.82) | $(0.29) | | Weighted average shares outstanding | 50,543,982 | 17,626,806 | 40,362,440 | 17,570,973 | - Net loss significantly increased for both the three and nine months ended September 30, 2021, primarily due to **$80.5 million** in expensed acquired in-process research and development (IPR&D) and higher general and administrative expenses[17](index=17&type=chunk) - Weighted average shares outstanding increased substantially, impacting net loss per common share[17](index=17&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' and Members' Equity (Deficit)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20and%20Members'%20Equity%20(Deficit)) This section outlines the changes in the company's equity, including contributions from financing activities and the impact of net losses - The company's total stockholders' and members' equity (deficit) improved from a deficit of **$(11,580,863)** at January 1, 2021, to a positive **$13,040,294** by September 30, 2021[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Key drivers for the change include **$10.5 million** from Brooklyn rights offerings membership units, **$58.68 million** from the issuance of common stock for the Novellus acquisition, and **$3.5 million** from stock purchase agreements with Lincoln Park Capital Fund, LLC[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Accumulated deficit significantly increased from **$(37,380,741)** at January 1, 2021, to **$(151,231,510)** by September 30, 2021, primarily due to net losses[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section analyzes the company's cash inflows and outflows from operating, investing, and financing activities, showing a significant increase in cash at period-end **Condensed Consolidated Statements of Cash Flows (Selected Items):** | Cash Flow Activity | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(16,657,634) | $(6,463,285) | | Net cash used in investing activities | $(22,594,612) | $(26,177) | | Net cash provided by financing activities | $62,003,622 | $4,443,655 | | Net increase (decrease) in cash | $22,751,376 | $(2,045,807) | | Cash and cash equivalents at end of period | $24,381,831 | $3,055,012 | - Net cash used in operating activities increased significantly to **$16.66 million** in 2021 from **$6.46 million** in 2020, driven by higher net losses and operating expenses[27](index=27&type=chunk) - Investing activities used **$22.59 million**, primarily due to the Novellus acquisition, compared to minimal use in 2020[27](index=27&type=chunk) - Financing activities provided **$62.00 million**, mainly from common stock issuances to Lincoln Park and sale of members' equity, leading to a substantial increase in cash at period-end[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering business operations, significant transactions, and accounting policies [1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION](index=9&type=section&id=1)%20DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's biopharmaceutical focus, its reverse acquisition of Brooklyn LLC, and the subsequent acquisition of Novellus, Inc - Brooklyn ImmunoTherapeutics Inc. is a clinical-stage biopharmaceutical company focused on cytokine, gene editing, and cell therapy for cancer, blood disorders, and monogenic diseases[29](index=29&type=chunk) - The company completed a reverse acquisition of Brooklyn LLC on March 25, 2021, with Brooklyn LLC deemed the accounting acquirer, and subsequently changed its name from NTN Buzztime, Inc[30](index=30&type=chunk)[33](index=33&type=chunk) - On July 16, 2021, Brooklyn acquired Novellus, Inc. and 25% of NoveCite, Inc., accounted for as an asset acquisition with most value attributed to expensed in-process research and development (IPR&D)[31](index=31&type=chunk)[34](index=34&type=chunk) [2) LIQUIDITY AND CAPITAL RESOURCES](index=10&type=section&id=2)%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This note assesses the company's financial viability, cash position, accumulated deficit, and plans for funding future operations - As of September 30, 2021, the company had **$24,381,831** in cash and an accumulated deficit of **$151,231,510**, having incurred significant operating losses[37](index=37&type=chunk) - Net loss for the nine months ended September 30, 2021, was **$113,842,963**, with **$16,657,634** cash used in operating activities[37](index=37&type=chunk) - The company raised **$20,000,000** and **$34,105,514** through common stock purchase agreements with Lincoln Park Capital Fund, LLC as of September 30, 2021, and believes existing cash is sufficient for the next 12 months[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [3) MERGER, DISPOSITION AND ACQUISITION TRANSACTIONS](index=10&type=section&id=3)%20MERGER,%20DISPOSITION%20AND%20ACQUISITION%20TRANSACTIONS) This note details the financial impacts of the company's significant merger, disposition of prior assets, and the acquisition of Novellus, Inc [Merger](index=10&type=section&id=Merger) This sub-note describes the reverse acquisition of Brooklyn LLC, its accounting treatment, and the resulting goodwill - The Merger with Brooklyn LLC closed on March 25, 2021, with Brooklyn LLC identified as the accounting acquirer, resulting in Brooklyn changing its name from NTN Buzztime, Inc[41](index=41&type=chunk) - Brooklyn LLC members received **96.35%** of Brooklyn's outstanding common stock post-Merger, and Brooklyn LLC's management became Brooklyn's management[42](index=42&type=chunk) - The purchase price for the Merger was **$8,177,614**, allocated to acquired assets and assumed liabilities, resulting in goodwill of **$8,588,576**[45](index=45&type=chunk)[46](index=46&type=chunk) [Disposition](index=12&type=section&id=Disposition) This sub-note outlines the sale of the company's pre-Merger business assets and the associated loss on sale - On March 26, 2021, Brooklyn sold its pre-Merger business assets (NTN Buzztime, Inc.) to eGames.com for **$2,000,000** and assumption of liabilities[49](index=49&type=chunk) - The disposition resulted in a total loss on sale of assets of **$9,648,173**, primarily due to the carrying value of goodwill (**$8,588,576**) and other intangible assets[49](index=49&type=chunk) [Unaudited Pro Forma Disclosure](index=12&type=section&id=Unaudited%20Pro%20Forma%20Disclosure) This sub-note provides pro forma financial information, assuming the Merger and Disposition occurred at an earlier date - Pro forma financial information for the nine months ended September 30, 2021 and 2020, assumes the Merger and Disposition were completed as of January 1, 2020[50](index=50&type=chunk) **Unaudited Pro Forma Net Loss:** | Item | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :--------------------------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders | $(113,850,769) | $(5,080,609) | | Basic and diluted net loss per share attributable to common stockholders | $(2.82) | $(0.29) | [Acquisition](index=12&type=section&id=Acquisition) This sub-note details the acquisition of Novellus, Inc. and NoveCite, Inc., including consideration and expensed in-process research and development - On July 16, 2021, Brooklyn acquired all outstanding equity interests of Novellus, Inc. and **25.0%** of NoveCite, Inc. for a total consideration of **$124,022,181**[51](index=51&type=chunk)[53](index=53&type=chunk) - Consideration included **$22,822,181** in cash and **7,022,230** shares of common stock valued at **$102,000,000**[53](index=53&type=chunk) - The acquisition was accounted for as an asset acquisition, with substantially all value (**$80,537,551**) attributed to in-process research and development (IPR&D) and expensed immediately[57](index=57&type=chunk)[58](index=58&type=chunk) [Investment in NoveCite](index=14&type=section&id=Investment%20in%20NoveCite) This sub-note explains the company's 25% investment in NoveCite, accounted for at cost due to lack of significant influence and market value - Brooklyn owns **25%** of NoveCite, but does not exercise significant influence due to Citius Pharmaceuticals, Inc. holding operational control and financial responsibility[60](index=60&type=chunk) - The investment in NoveCite is accounted for at cost (**$1,000,000**) under ASC Topic 321, as its stock is not publicly traded and lacks a readily determinable fair value[60](index=60&type=chunk) [4) FAIR VALUE OF FINANCIAL INSTRUMENTS](index=14&type=section&id=4)%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note discusses the valuation of financial instruments, specifically the contingent consideration liability measured using unobservable inputs - The company's contingent consideration liability is measured at fair value using Level 3 inputs, which are unobservable market data requiring the company's own assumptions[63](index=63&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) **Contingent Consideration Fair Value:** | Description | September 30, 2021 | December 31, 2020 | | :------------------------ | :----------------- | :---------------- | | Contingent consideration | $19,360,000 | $20,110,000 | | Total | $19,360,000 | $20,110,000 | - For the nine months ended September 30, 2021, the fair value of contingent consideration decreased by **$750,000**, while for the three months ended September 30, 2021, it increased by **$70,000**[66](index=66&type=chunk) [5) LEASES](index=15&type=section&id=5)%20LEASES) This note details the company's operating lease arrangements for office and laboratory spaces, including associated assets and liabilities - The company has operating leases for office and laboratory space in New York and Cambridge, Massachusetts, expiring between 2025 and 2028[70](index=70&type=chunk) - Operating lease expenses for the nine months ended September 30, 2021, totaled **$454,958**, including sublease income and variable lease expenses[76](index=76&type=chunk) **Operating Lease ROU Assets and Liabilities:** | Item | January 1, 2021 | September 30, 2021 | | :------------------------------------ | :-------------- | :----------------- | | Operating lease ROU assets | $2,092,878 | $2,665,828 | | Operating lease liabilities | $2,178,612 | $2,818,792 | | Current portion of liabilities | - | $408,125 | [6) GOODWILL AND IN-PROCESS RESEARCH & DEVELOPMENT](index=17&type=section&id=6)%20GOODWILL%20AND%20IN-PROCESS%20RESEARCH%20%26%20DEVELOPMENT) This note explains the recognition and expensing of goodwill and in-process research and development from past and recent acquisitions - Goodwill and IPR&D of **$2,043,747** and **$6,860,000**, respectively, were recorded from the 2018 acquisition of IRX[81](index=81&type=chunk) - An additional **$80,537,551** of IPR&D acquired in the Novellus acquisition was expensed during Q3 2021, as it had no alternative future uses[82](index=82&type=chunk) [7) ACCRUED EXPENSES](index=17&type=section&id=7)%20ACCRUED%20EXPENSES) This note provides a breakdown of accrued expenses, highlighting significant increases across various categories **Accrued Expenses:** | Item | September 30, 2021 | December 31, 2020 | | :---------------------------------- | :----------------- | :---------------- | | Accrued compensation | $589,652 | $293,534 | | Accrued research and development expenses | $718,764 | $207,468 | | Accrued general and administrative expenses | $625,487 | $399,893 | | Accrued interest | $194,590 | $150,125 | | Total accrued expenses | $2,128,493 | $1,051,020 | - Total accrued expenses increased by over **100%** from **$1,051,020** at December 31, 2020, to **$2,128,493** at September 30, 2021, driven by increases across all categories[82](index=82&type=chunk) [8) DEBT](index=17&type=section&id=8)%20DEBT) This note details the company's debt obligations, including assumed loans payable and the forgiveness of Payment Protection Program loans [Loans Payable](index=17&type=section&id=Loans%20Payable) This sub-note describes the assumed IRX Notes, their maturity, and accrued interest - Brooklyn LLC assumed **$410,000** in IRX Notes in 2018, with an extended maturity date to December 31, 2021, or a change of control[83](index=83&type=chunk) - As of September 30, 2021, accrued and unpaid interest on the IRX Notes totaled **$194,590**[83](index=83&type=chunk) [Payment Protection Program Loan](index=18&type=section&id=Payment%20Protection%20Program%20Loan) This sub-note details the forgiveness of the company's and Brooklyn LLC's Payment Protection Program loans - Brooklyn LLC's **$309,905** PPP Loan was **100%** forgiven by the U.S. Small Business Administration in September 2021[85](index=85&type=chunk)[86](index=86&type=chunk) - Brooklyn (NTN Buzztime, Inc.) had a **$1,625,000** PPP Loan, of which **$1,093,000** was forgiven in October 2020, and the remaining **$532,000** was paid upon the Merger's closing[87](index=87&type=chunk) [9) COMMITMENTS AND CONTINGENCIES](index=18&type=section&id=9)%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's various legal matters, licensing agreements, and royalty obligations [Legal Matters](index=18&type=section&id=Legal%20Matters) This sub-note generally addresses the company's involvement in legal proceedings and its policy for reserving costs - The company is involved in various legal proceedings in the ordinary course of business and reserves for costs when a loss is probable and estimable[88](index=88&type=chunk) [Merger-Related Shareholder Litigation](index=18&type=section&id=Merger-Related%20Shareholder%20Litigation) This sub-note describes shareholder lawsuits related to the Merger, which were dismissed after supplemental disclosures - Ten shareholder actions related to the Merger, alleging disclosure failures in the Form S-4 Registration Statement, were voluntarily dismissed after Brooklyn supplemented disclosures[89](index=89&type=chunk) - The parties amicably resolved plaintiffs' counsel's request for attorneys' fees and expenses following the dismissals[89](index=89&type=chunk) [Dhesh Govender v. Brooklyn Immunotherapeutics, LLC, et al.](index=19&type=section&id=Dhesh%20Govender%20v.%20Brooklyn%20Immunotherapeutics,%20LLC,%20et%20al.) This sub-note details a former consultant's complaint alleging discrimination, breach of contract, and fraud against the company - A former consultant filed a complaint against Brooklyn LLC and individuals, alleging unlawful discrimination, breach of contract, and fraud, seeking not less than **$10 million** in damages[91](index=91&type=chunk) - The company filed a motion to compel arbitration or dismiss partial claims, and the parties are awaiting the Court's decision as of the filing date[91](index=91&type=chunk) [Carlson v. Allen Wolff, Michael Gottlieb, Richard Simtob, Susan Miller, and NTN Buzztime, Inc.](index=19&type=section&id=Carlson%20v.%20Allen%20Wolff,%20Michael%20Gottlieb,%20Richard%20Simtob,%20Susan%20Miller,%20and%20NTN%20Buzztime,%20Inc.) This sub-note describes a class action to compel an annual stockholder meeting, which was subsequently held, rendering the complaint moot - A class action complaint was filed to compel an annual stockholder meeting, which Brooklyn subsequently held on September 3, 2021, leading to the voluntary dismissal of the complaint as moot[92](index=92&type=chunk) - An agreement in principle has been reached regarding plaintiff's counsel's request for attorneys' fees and expenses[92](index=92&type=chunk) [Robert Garfield Matter](index=19&type=section&id=Robert%20Garfield%20Matter) This sub-note addresses a demand letter concerning alleged misstatements about authorized shares, resolved by stockholder ratification - A demand letter alleged material misstatements regarding an increase in authorized shares; stockholder ratification of the amendment on September 3, 2021, rendered the claims moot[93](index=93&type=chunk)[94](index=94&type=chunk) - The parties are attempting to resolve Garfield's counsel's request for attorneys' fees[94](index=94&type=chunk) [Edmund Truell Matter](index=19&type=section&id=Edmund%20Truell%20Matter) This sub-note details a stockholder's claim of loss due to delayed stock sale caused by physical certificate issuance - A stockholder alleged a loss due to delayed sale of common stock caused by Brooklyn's issuance of physical stock certificates instead of electronic book entry[95](index=95&type=chunk) [Emerald Private Equity Fund, LLC Matter](index=20&type=section&id=Emerald%20Private%20Equity%20Fund,%20LLC%20Matter) This sub-note describes a stockholder's demand to inspect books and records related to the Merger and stock certificate issues - A stockholder demanded to inspect books and records to investigate possible wrongdoing related to the Merger and stock certificate issuance, particularly concerning restrictions and priority[97](index=97&type=chunk) - Brooklyn has produced some information under a confidentiality agreement and is considering requests for additional information[97](index=97&type=chunk) [John Westman v. Novellus, Inc., Christopher Rohde, and Matthew Angel](index=20&type=section&id=John%20Westman%20v.%20Novellus,%20Inc.,%20Christopher%20Rohde,%20and%20Matthew%20Angel) This sub-note outlines a former Novellus employee's complaint against Novellus and its founders, currently stayed for arbitration - A former Novellus, Inc. employee filed a complaint against Novellus, Inc. and its founders for pre-acquisition conduct; the case is stayed pending arbitration[98](index=98&type=chunk) - Novellus, Inc. founders agreed to assume the defense and pay fees for these claims, subject to limitations[98](index=98&type=chunk) [Licensing Agreements](index=20&type=section&id=Licensing%20Agreements) This sub-note details the company's key licensing agreements, including those for IRX-2 and mRNA cell reprogramming technology - Brooklyn LLC has a license with University of South Florida (USF) for IRX-2, subject to a **7%** royalty on gross product sales[99](index=99&type=chunk) - Brooklyn LLC entered an exclusive license agreement with Novellus, Ltd. and Factor for mRNA cell reprogramming and gene editing technology, with **$4.0 million** paid and future milestone payments[100](index=100&type=chunk)[102](index=102&type=chunk)[105](index=105&type=chunk) - The acquisition of Novellus, Ltd. relieved Brooklyn LLC from certain obligations to Novellus, Ltd. under the license, but obligations to Factor remain, including **$2.5 million** paid in October 2021 and **$3.5 million** due in October 2022[104](index=104&type=chunk) [Royalty Agreements](index=21&type=section&id=Royalty%20Agreements) This sub-note describes the company's obligations to pay various royalties on IRX-2 revenues to partners and investors - Brooklyn LLC is obligated to pay a **6%** royalty on IRX-2 revenues to a collaborative partner and an additional **4%** royalty to certain beneficial holders of Brooklyn ImmunoTherapeutics Investors[110](index=110&type=chunk)[112](index=112&type=chunk) - An additional **1%** royalty on gross sales is payable to former IRX Therapeutics investors when royalties to USF become due[113](index=113&type=chunk) - No product sales or royalties have been recognized to date under any of these agreements[113](index=113&type=chunk) [10) STOCK-BASED COMPENSATION](index=22&type=section&id=10)%20STOCK-BASED%20COMPENSATION) This note discusses the company's equity incentive plans and the significant stock-based compensation expenses incurred [Equity Incentive Plans](index=22&type=section&id=Equity%20Incentive%20Plans) This sub-note details the company's approved equity incentive plans and the outstanding share-based awards - The Restated 2020 Equity Incentive Plan was approved, increasing authorized shares for issuance to **8,484,936** and allowing for annual increases[115](index=115&type=chunk) - The 2021 Inducement Equity Incentive Plan was adopted, providing for up to **1,500,000** share-based awards for new employees[118](index=118&type=chunk) - As of September 30, 2021, there were no stock options outstanding under the Restated 2020 Plan, but **372,880** nonqualified stock options and **221,640** restricted stock units (RSUs) were outstanding under the 2021 Inducement Plan[116](index=116&type=chunk)[118](index=118&type=chunk) [Stock-Based Compensation](index=23&type=section&id=Stock-Based%20Compensation) This sub-note highlights the substantial increase in stock-based compensation expense and significant grants to the CEO - Stock-based compensation expense for the three and nine months ended September 30, 2021, was **$1,728,304** and **$3,301,697**, respectively, a significant increase from 2020[131](index=131&type=chunk) - During the nine months ended September 30, 2021, Brooklyn granted **3,598,048** nonqualified stock options, including significant grants to the CEO, Howard J. Federoff, M.D., Ph.D[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - The CEO's grants included a time-based option for **2,627,915** shares and a performance-based Milestone Option for **597,253** shares, both granted outside of equity incentive plans as inducement awards[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) [11) STOCKHOLDERS' AND MEMBERS' EQUITY (DEFICIT)](index=24&type=section&id=11)%20STOCKHOLDERS'%20AND%20MEMBERS'%20EQUITY%20(DEFICIT)) This note explains the changes in the company's equity, including proceeds from equity offerings and the impact of corporate actions [Equity Line Offerings](index=24&type=section&id=Equity%20Line%20Offerings) This sub-note details the company's common stock purchase agreements with Lincoln Park Capital Fund, LLC and proceeds raised - Brooklyn entered into two common stock purchase agreements with Lincoln Park Capital Fund, LLC, allowing for the sale of up to **$60,000,000** in common stock[132](index=132&type=chunk)[133](index=133&type=chunk) - As of September 30, 2021, Brooklyn issued and sold **3,551,990** shares under these agreements for total net proceeds of **$52,025,414**[138](index=138&type=chunk) - The Second Purchase Agreement allows for regular and accelerated purchases of common stock by Lincoln Park, subject to price thresholds and beneficial ownership limits[134](index=134&type=chunk)[136](index=136&type=chunk) [Reverse Stock-Split](index=25&type=section&id=Reverse%20Stock-Split) This sub-note describes the 1-for-2 reverse stock split effected prior to the Merger - A **1-for-2** reverse stock split was effected on March 25, 2021, immediately prior to the Merger, reducing outstanding common stock shares[139](index=139&type=chunk) - Immediately after the split, **1,514,373** shares of common stock were outstanding before the Merger[140](index=140&type=chunk) [Merger (Equity)](index=25&type=section&id=Merger%20(Equity)) This sub-note details the issuance of common stock to Brooklyn LLC equity holders as part of the Merger - On March 25, 2021, Brooklyn issued **39,991,625** shares of common stock to Brooklyn LLC equity holders as part of the Merger, including shares for a financial advisor[44](index=44&type=chunk)[141](index=141&type=chunk) [Acquisition (Equity)](index=25&type=section&id=Acquisition%20(Equity)) This sub-note describes the issuance of common stock for the Novellus acquisition, including lock-up agreements - On July 16, 2021, Brooklyn issued **7,022,230** shares of common stock for the Novellus acquisition, with **3,377,690** shares subject to a three-year lock-up agreement[142](index=142&type=chunk) [12) RECENT ACCOUNTING PRONOUNCEMENTS](index=25&type=section&id=12)%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses recently issued accounting standards and their expected impact on the company's financial statements - The FASB issued ASU 2021-04 (Earnings Per Share, Debt, Compensation, Derivatives) and ASU 2021-05 (Leases – Lessors) effective for fiscal years beginning after December 15, 2021[143](index=143&type=chunk)[144](index=144&type=chunk) - The company does not expect the adoption of these updates to have a significant impact on its financial statements[143](index=143&type=chunk)[144](index=144&type=chunk) [13) SUBSEQUENT EVENTS](index=25&type=section&id=13)%20SUBSEQUENT%20EVENTS) This note confirms management's evaluation of events occurring after the reporting period, with no material disclosures identified - Management evaluated subsequent events through the filing date and concluded there are no material subsequent events to disclose[145](index=145&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial condition, changes in financial condition, and results of operations, focusing on the impact of the Merger, Disposition, and Acquisition, as well as the company's biopharmaceutical development programs, recent financial performance, liquidity, and capital resources [Background](index=26&type=section&id=Background) This section provides context for the company's recent corporate transactions, including the reverse acquisition, asset disposition, and Novellus acquisition - On March 25, 2021, Brooklyn (formerly NTN Buzztime, Inc.) completed a reverse acquisition with Brooklyn LLC, changing its name and effecting a **1-for-2** reverse stock split[147](index=147&type=chunk) - On March 26, 2021, Brooklyn sold its pre-Merger business assets to eGames.com for **$2.0 million**[147](index=147&type=chunk) - On July 16, 2021, Brooklyn acquired Novellus, Inc. and **25%** of NoveCite, Inc., accounted for as an asset acquisition with IPR&D expensed[149](index=149&type=chunk) [Overview](index=26&type=section&id=Overview) This section introduces Brooklyn ImmunoTherapeutics as a clinical-stage biopharmaceutical company focused on cytokine, gene editing, and cell therapies - Brooklyn ImmunoTherapeutics is a clinical-stage biopharmaceutical company developing IRX-2, a cytokine-based therapy for cancer, and exploring gene-editing and cell therapy for oncology, blood disorders, and monogenic diseases[150](index=150&type=chunk) [IRX-2](index=27&type=section&id=IRX-2) This section describes IRX-2 as a cytokine-based therapy for cancer, outlining its mechanism and clinical development strategy - IRX-2 is a mixed, human-derived cytokine product, including Interleukin-2 (IL-2), designed to enhance and restore immune function against cancer cells[152](index=152&type=chunk)[153](index=153&type=chunk) - The company's strategy for IRX-2 includes advancing clinical development (INSPIRE trial data expected H1 2022), pursuing combination trials with checkpoint inhibitors, seeking partnerships, and obtaining breakthrough therapy designation[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - Pre-clinical studies of IRX-2 showed benign toxicological findings and PD/PDL-1 synergy when administered with IRX-2[159](index=159&type=chunk) [Pre-Clinical Results](index=27&type=section&id=Pre-Clinical%20Results) This section summarizes nonclinical studies of IRX-2, showing benign toxicological findings and synergy with PD/PDL-1 - Nonclinical studies of IRX-2 in murine and primate models detected circulating associated cytokines with benign toxicological findings[159](index=159&type=chunk) - A murine study demonstrated PD/PDL-1 synergy when additively administered with IRX-2[159](index=159&type=chunk) [Clinical Program](index=28&type=section&id=Clinical%20Program) This section details the clinical development of IRX-2 across various cancer indications and combination therapies [HNSCC](index=28&type=section&id=HNSCC) This sub-section focuses on IRX-2's development for head and neck squamous cell carcinoma, including fast track and orphan drug designations - IRX-2 is under development for advanced head and neck squamous cell carcinoma (HNSCC) as an immunotherapeutic neoadjuvant and adjuvant treatment[161](index=161&type=chunk) - The HNSCC program has received FDA fast track designation (2003) and orphan drug designation (2005)[162](index=162&type=chunk) - A Phase 2B study (INSPIRE) involving **105** HNSCC patients is ongoing, building on prior Phase 2a results showing correlation between marker activation and disease-free survival[163](index=163&type=chunk) [Other Indications](index=28&type=section&id=Other%20Indications) This sub-section outlines investigator-sponsored trials for IRX-2 in monotherapy and combination therapies for various cancers - Beyond INSPIRE, IRX-2 is being studied in investigator-sponsored trials for monotherapy (neoadjuvant breast cancer, cervical/vulvar squamous intraepithelial neoplasia) and combination therapies[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk) - Combination studies include IRX-2 with Opdivo for metastatic bladder, renal, NSCLC, melanoma, head and neck cancer (BAS-104, discontinued), and hepatocellular carcinoma (HCC-107)[166](index=166&type=chunk)[167](index=167&type=chunk) - Other combination trials involve IRX-2 with Keytruda for gastric/gastroesophageal junction cancers (GI-106), Imfinzi for metastatic head and neck cancer (MHN-102), and PD1/chemotherapy for triple negative breast cancer (BR-202)[168](index=168&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk) [Impact of COVID-19 Pandemic](index=29&type=section&id=Impact%20of%20COVID-19%20Pandemic) This section discusses the adverse effects of the COVID-19 pandemic on clinical trial development and enrollment - The COVID-19 pandemic has disrupted and may continue to adversely affect product candidate development and clinical trials, causing slowdowns in enrollment[172](index=172&type=chunk)[173](index=173&type=chunk) - While the INSPIRE study is fully enrolled, other clinical studies are likely to face enrollment delays, and the pandemic is expected to slow trial site close-out and data reporting for INSPIRE[173](index=173&type=chunk) [Engineered Cellular and Genetic Medicines](index=29&type=section&id=Engineered%20Cellular%20and%20Genetic%20Medicines) This section introduces the company's pipeline in iPSC-derived therapies, gene editing, and autologous cell therapy [Pluripotent Stem Cell-Derived MSC](index=29&type=section&id=Pluripotent%20Stem%20Cell-Derived%20MSC) This sub-section describes the development of iPSC-derived mesenchymal stem cells for inflammatory conditions and bone marrow recovery - The company is developing induced pluripotent stem cells (iPSCs)-derived allogeneic mesenchymal stem cells (iMSC) for preclinical development in inflammatory conditions and bone marrow stromal cell recovery[174](index=174&type=chunk) - iMSC offer reduced variability compared to tissue-derived MSC due to a single tissue source, single donor, and extensive proliferation capacity, leveraging decades of MSC experience[176](index=176&type=chunk) [Bone Marrow Transplant](index=30&type=section&id=Bone%20Marrow%20Transplant) This sub-section explores the use of iMSC to address graft failure after bone marrow or hematopoietic stem cell transplant - Brooklyn is exploring iMSC to address primary graft failure or poor graft function after bone marrow or hematopoietic stem cell transplant (BM/HSCT)[178](index=178&type=chunk) - Preclinical studies are underway to demonstrate iMSC's ability to home to bone marrow and influence the microenvironment, guided by an advisory board of BM/HSCT experts[178](index=178&type=chunk) [Tumor Localized Delivery of Immune Stimulating Cytokines](index=30&type=section&id=Tumor%20Localized%20Delivery%20of%20Immune%20Stimulating%20Cytokines) This sub-section outlines the strategy to use gene-edited iPSC to deliver immune-stimulatory cytokines directly to tumors - The company intends to use gene editing of iPSC to produce iMSC expressing immune stimulatory cytokines IL7 and IL15[179](index=179&type=chunk) - This approach aims for localized and sustained delivery of potent cytokines to the tumor microenvironment, avoiding systemic side effects[179](index=179&type=chunk) [Precision Genetic Medicines](index=30&type=section&id=Precision%20Genetic%20Medicines) This sub-section details the development of in vivo gene editing for single-gene disorders like familial transthyretin amyloidosis - Leveraging in-licensed technologies, Brooklyn is developing genetic medicines for precision in vivo gene editing to address single-gene disorders[180](index=180&type=chunk) - Initial disease targets include familial transthyretin amyloidosis (TTR gene mutations) and Stargardt disease (ABC4A gene mutation)[180](index=180&type=chunk) [Autologous Cell Therapy](index=30&type=section&id=Autologous%20Cell%20Therapy) This sub-section describes the mRNA-based cellular reprogramming technology for efficient and safer iPSC generation for autologous cell therapies - The in-licensed mRNA-based cellular reprogramming technology offers efficient and safer generation of iPSC clones, reducing DNA integration risks[181](index=181&type=chunk) - This approach allows for rapid iPSC generation and simultaneous genomic modifications, streamlining manufacturing for gene-corrected autologous cells to treat genetic and infectious diseases[181](index=181&type=chunk) [Third Quarter 2021 and Recent Developments](index=30&type=section&id=Third%20Quarter%202021%20and%20Recent%20Developments) This section highlights key corporate events and financial activities during and after the third quarter of 2021 [Listing on The Nasdaq Global Market](index=30&type=section&id=Listing%20on%20The%20Nasdaq%20Global%20Market) This sub-section notes the company's transfer of its common stock listing to The Nasdaq Global Market - Effective October 25, 2021, the company transferred its common stock listing to The Nasdaq Global Market from the NYSE American stock exchange, continuing to trade under 'BTX'[182](index=182&type=chunk) [License Agreements](index=31&type=section&id=License%20Agreements) This sub-section details significant licensing agreements for mRNA cell reprogramming and gene editing technology - Brooklyn LLC entered an exclusive license agreement with Novellus, Ltd. and Factor for mRNA cell reprogramming and gene editing technology, with **$4.0 million** paid upon execution[183](index=183&type=chunk)[184](index=184&type=chunk) - The acquisition of Novellus, Inc. relieved Brooklyn LLC from certain obligations to Novellus, Ltd., but obligations to Factor remain, including **$2.5 million** paid in October 2021 and **$3.5 million** due in October 2022[185](index=185&type=chunk) - Novellus, Ltd. holds licenses from Factor for over **45** granted patents and **50** pending applications covering synthetic mRNA, RNA-based gene editing, and cell reprogramming[190](index=190&type=chunk) [Purchase Agreements](index=32&type=section&id=Purchase%20Agreements) This sub-section describes the common stock purchase agreements with Lincoln Park Capital Fund, LLC for capital raising - Brooklyn entered into two purchase agreements with Lincoln Park Capital Fund, LLC, allowing for the sale of up to **$60.0 million** in common stock[192](index=192&type=chunk)[193](index=193&type=chunk) - As of September 30, 2021, Brooklyn issued and sold **3,551,990** shares for total net proceeds of **$52.0 million**[197](index=197&type=chunk) - Sales depend on market conditions and stock price, with proceeds expected to fund research and development, working capital, and general corporate purposes[196](index=196&type=chunk) [Acquisition of Novellus](index=32&type=section&id=Acquisition%20of%20Novellus) This sub-section outlines the acquisition of Novellus, Inc. and NoveCite, Inc., and its strategic implications - On July 16, 2021, Brooklyn acquired Novellus, Inc. and **25.0%** of NoveCite, Inc. for approximately **$124.0 million**, consisting of **$22.8 million** cash and **7,022,230** shares of common stock[198](index=198&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) - The acquisition is expected to advance Brooklyn's evolution into a platform company with next-generation engineered cellular, gene editing, and cytokine programs[205](index=205&type=chunk) - **740,766** shares issued as consideration are held in escrow for indemnification, and co-founders of Novellus, Ltd. and Brooklyn's executives entered into three-year lock-up agreements for certain shares[203](index=203&type=chunk)[204](index=204&type=chunk) [Basis of Presentation](index=33&type=section&id=Basis%20of%20Presentation) This section explains the accounting policies for revenues, general and administrative expenses, and research and development expenses [Revenues](index=33&type=section&id=Revenues) This sub-section clarifies that the company currently has no product sales revenue as a development-stage entity - As a development stage company, Brooklyn has had no revenues from product sales to date and will not until regulatory approval or licensing agreements are secured[206](index=206&type=chunk) [General and Administrative Expenses](index=33&type=section&id=General%20and%20Administrative%20Expenses) This sub-section defines the primary components of general and administrative expenses - General and administrative expenses primarily include salaries, benefits, stock-based compensation for executive and administrative personnel, legal and professional fees, travel, and insurance[207](index=207&type=chunk) [Research and Development Expenses](index=33&type=section&id=Research%20and%20Development%20Expenses) This sub-section outlines the accounting treatment and major components of research and development costs - Research and development costs are expensed as incurred, including company-sponsored activities, investigator-sponsored research support, and upfront/milestone payments for licensed technology without alternative future uses[208](index=208&type=chunk) - Major components include preclinical/clinical study costs, clinical manufacturing, expensed licensed technology, consulting, salaries, stock-based compensation, and supplies[210](index=210&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there were no significant changes in critical accounting estimates during the reporting period - There were no significant changes in critical accounting estimates during the three and nine months ended September 30, 2021[212](index=212&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's operating results for the three and nine months ended September 30, 2021 and 2020 [Comparison of Three and Nine Months Ended September 30, 2021 and 2020](index=34&type=section&id=Comparison%20of%20Three%20and%20Nine%20Months%20Ended%20September%2030,%202021%20and%202020) This sub-section presents a comparative analysis of operating expenses and net loss for the specified periods **Operating Expenses Comparison:** | Item | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Research and development | $1,466,652 | $923,529 | $543,123 | 59% | | Acquired IPR&D | $80,537,551 | - | $80,537,551 | N/A | | General and administrative | $4,258,178 | $1,084,057 | $3,174,121 | 293% | | Total operating expenses | $86,332,381 | $2,007,586 | $84,324,795 | 4,200% | | Net loss | $(86,055,312) | $(2,020,145) | $(84,035,167) | 4,160% | | Item | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Research and development | $8,379,062 | $2,299,669 | $6,079,393 | 264% | | Acquired IPR&D | $80,537,551 | - | $80,537,551 | N/A | | General and administrative | $10,515,088 | $2,741,652 | $7,773,436 | 284% | | Transaction costs | $5,765,407 | - | $5,765,407 | N/A | | Total operating expenses | $104,447,108 | $5,041,321 | $99,405,787 | 1,972% | | Net loss | $(113,842,963) | $(5,072,803) | $(108,770,160) | 2,144% | [Revenues](index=35&type=section&id=Revenues) This sub-section confirms the absence of revenues for the reported periods - The company reported no revenues for the three and nine months ended September 30, 2021, or 2020[215](index=215&type=chunk) [Research and Development Expenses](index=35&type=section&id=Research%20and%20Development%20Expenses) This sub-section analyzes the significant increase in R&D expenses, driven by license fees and personnel costs **Research and Development Expenses:** | Item | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Payroll-related | $743,528 | $433,435 | $310,093 | 72% | | Stock-based compensation | $447,780 | - | $447,780 | N/A | | Other expenses, net | $275,344 | $490,094 | $(214,750) | -44% | | Total R&D expense | $1,466,652 | $923,529 | $543,123 | 59% | | Item | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | License fees | $4,000,000 | - | $4,000,000 | N/A | | Payroll-related | $1,797,317 | $1,291,038 | $506,279 | 39% | | Stock-based compensation | $1,018,428 | - | $1,018,428 | N/A | | Other expenses, net | $1,563,317 | $1,008,631 | $554,686 | 55% | | Total R&D expense | $8,379,062 | $2,299,669 | $6,079,393 | 264% | - R&D expenses increased by **59%** for the three months and **264%** for the nine months ended September 30, 2021, primarily due to upfront license fees, increased headcount, and stock-based compensation[217](index=217&type=chunk) - The company expects R&D expenses to continue growing with the expansion of gene-editing cell-therapy research and clinical trial activities[218](index=218&type=chunk) [Acquired IPR&D](index=35&type=section&id=Acquired%20IPR%26D) This sub-section details the expensing of acquired in-process research and development due to its lack of alternative future use - The company expensed **$80,537,551** for acquired in-process research and development (IPR&D) during the three and nine months ended September 30, 2021, as it had no alternative future use[219](index=219&type=chunk) [General and Administrative Expenses](index=35&type=section&id=General%20and%20Administrative%20Expenses) This sub-section examines the substantial rise in G&A expenses, attributed to professional fees, stock-based compensation, and public company costs **General and Administrative Expenses:** | Item | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Professional fees | $1,587,573 | $779,119 | $808,454 | 104% | | Stock-based compensation | $1,280,524 | $22,734 | $1,257,790 | 5,533% | | Payroll-related | $540,769 | $28,513 | $512,256 | 1,797% | | Insurance | $366,986 | $39,709 | $327,277 | 824% | | Total G&A expense | $4,258,178 | $1,084,057 | $3,174,121 | 293% | | Item | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Professional fees | $5,553,661 | $1,827,002 | $3,726,659 | 204% | | Stock-based compensation | $2,283,269 | $68,202 | $2,215,067 | 3,248% | | Payroll-related | $706,066 | $86,553 | $619,513 | 716% | | Insurance | $766,951 | $83,627 | $683,324 | 817% | | Total G&A expense | $10,515,088 | $2,741,652 | $7,773,436 | 284% | - General and administrative expenses increased significantly (**293%** for three months, **284%** for nine months) due to higher professional fees, stock-based compensation, payroll, and insurance costs associated with M&A activity and public company operations[220](index=220&type=chunk) - The company anticipates further increases in G&A expenses as business activities expand and public company costs are incurred[221](index=221&type=chunk) [Transaction Costs](index=35&type=section&id=Transaction%20Costs) This sub-section reports transaction costs incurred for the nine months related to the Merger's financial advisor - No transaction costs were incurred for the three months ended September 30, 2021. For the nine months, **$5,765,407** in transaction costs related to common stock issuance to Brooklyn LLC's financial advisor for the Merger[222](index=222&type=chunk) [Change in Fair Value of Contingent Consideration](index=35&type=section&id=Change%20in%20Fair%20Value%20of%20Contingent%20Consideration) This sub-section explains the fluctuations in the fair value of contingent consideration based on quarterly valuations - The fair value of contingent consideration increased by **$70,000** for the three months ended September 30, 2021, and decreased by **$750,000** for the nine months ended September 30, 2021, based on quarterly valuations[223](index=223&type=chunk) [Other Income (Expense), Net](index=36&type=section&id=Other%20Income%20(Expense),%20Net) This sub-section details the components of other income and expense, including PPP Loan forgiveness and interest expense **Other Income (Expense), Net:** | Item | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Income from Brooklyn PPP Loan forgiveness | $309,905 | - | $309,905 | N/A | | Interest expense, net | $(20,210) | $(12,559) | $(7,651) | 61% | | Total other income (expense), net | $277,069 | $(12,559) | $289,628 | -2,306% | | Item | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Income from Brooklyn PPP Loan forgiveness | $309,905 | - | $309,905 | N/A | | Interest expense, net | $(55,974) | $(31,482) | $(24,492) | 78% | | Total other income (expense), net | $252,318 | $(31,482) | $283,800 | -901% | - Other income, net, increased significantly due to the forgiveness of the PPP Loan, partially offset by increased interest expense on assumed notes payable[226](index=226&type=chunk) [Loss on Sales of NTN Assets](index=36&type=section&id=Loss%20on%20Sales%20of%20NTN%20Assets) This sub-section reports the loss incurred from the sale of NTN assets following the Disposition - A **$9,648,173** loss on the sale of NTN assets was incurred for the nine months ended September 30, 2021, upon completion of the Disposition[225](index=225&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations, including current cash position and future funding needs - As of September 30, 2021, the company had **$24,381,831** in cash and cash equivalents[227](index=227&type=chunk) - The company expects to incur increasing operating losses and plans to use current cash and proceeds from the Lincoln Park purchase agreements to fund operations for the next twelve months[227](index=227&type=chunk) - Future funding requirements depend on clinical trial progress, regulatory approvals, commercialization costs, and intellectual property protection, with plans to raise additional funds through equity, debt, or collaborations[228](index=228&type=chunk)[229](index=229&type=chunk) [Sources of Funds](index=37&type=section&id=Sources%20of%20Funds) This sub-section identifies the primary sources of capital, including equity sales and PPP Loan forgiveness - The company raised **$52.0 million** in net proceeds from common stock sales to Lincoln Park Capital Fund, LLC as of November 9, 2021, with **$5.9 million** remaining available under the Second Purchase Agreement[232](index=232&type=chunk) - Prior to the Merger, Brooklyn LLC members invested **$10.5 million** to meet a cash requirement[232](index=232&type=chunk) - The Disposition of NTN Buzztime, Inc. assets generated a **$2.0 million** purchase price, and Brooklyn LLC's **$309,905** PPP Loan was fully forgiven[233](index=233&type=chunk)[235](index=235&type=chunk) [Uses of Funds](index=37&type=section&id=Uses%20of%20Funds) This sub-section outlines the major expenditures, such as operating activities, acquisitions, and loan repayments - Net cash used in operating activities was **$16.7 million** during the nine months ended September 30, 2021, influenced by net loss and investments in personnel and technology[236](index=236&type=chunk) - The company used **$22,882,181** in cash for the Novellus acquisition on July 16, 2021[239](index=239&type=chunk) - Approximately **$532,000** of the Brooklyn PPP Loan, plus accrued interest, was repaid upon the closing of the Merger[240](index=240&type=chunk) [Recent Accounting Pronouncements](index=38&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 12 for details on recent accounting pronouncements - A discussion of recent accounting pronouncements is included in Note 12 to the condensed consolidated financial statements[241](index=241&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements - The company has no off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial condition or results of operations[242](index=242&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Brooklyn ImmunoTherapeutics, Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - As a smaller reporting company, Brooklyn ImmunoTherapeutics, Inc. is exempt from providing detailed market risk disclosures[243](index=243&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's evaluation of its disclosure controls and procedures, identifying material weaknesses due to insufficient accounting staff and lack of documentation, and outlines remediation plans to strengthen the internal control environment [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section evaluates the effectiveness of the company's disclosure controls and procedures, noting identified material weaknesses - As of September 30, 2021, the company's disclosure controls and procedures were deemed ineffective due to insufficient accounting staff and lack of appropriate documentation of policies and procedures[246](index=246&type=chunk) - These deficiencies increase the risk of material misstatements not being prevented or detected timely[246](index=246&type=chunk) - Remediation plans include hiring additional accounting personnel for proper segregation of duties and developing/implementing written policies and procedures for financial reporting objectives[248](index=248&type=chunk) [Changes in Internal Control Over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the period - Other than the deficiencies noted in the evaluation of disclosure controls, there were no material changes in internal control over financial reporting during the three months ended September 30, 2021[250](index=250&type=chunk) [PART II – OTHER INFORMATION](index=39&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings.](index=39&type=section&id=Item%201.%20Legal%20Proceedings.) This section incorporates by reference the legal matters discussed in Note 9 to the condensed consolidated financial statements, indicating that no other pending litigation is expected to have a material adverse effect on the company's financial condition - Information on legal proceedings is incorporated by reference from Note 9 of the financial statements[252](index=252&type=chunk) - The company does not believe any other pending litigation could have a material adverse effect on its results of operations, financial condition, or cash flows[253](index=253&type=chunk) [Item 1A. Risk Factors.](index=39&type=section&id=Item%201A.%20Risk%20Factors.) This section highlights significant risks, including potential challenges to the validity of the authorized share increase ratification and uncertainties regarding the expected benefits and integration of the Novellus acquisition - An investment in the company's common stock involves a high degree of risk, as detailed in this report and prior SEC filings[254](index=254&type=chunk) - There is no assurance that claims will not challenge the validity of the Share Increase Ratification, which could materially adversely affect liquidity and potentially lead to bankruptcy[255](index=255&type=chunk)[258](index=258&type=chunk) - The company may not realize the expected benefits of the Novellus acquisition, and the integration process could disrupt business, distract management, and increase expenses[260](index=260&type=chunk)[262](index=262&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section details unregistered sales of common stock during the three months ended September 30, 2021, including issuances to Lincoln Park Capital Fund, LLC and for the Novellus acquisition, and the exemption from registration relied upon - From September 19-20, 2021, **340,048** shares of common stock were issued to Lincoln Park Capital Fund, LLC for **$3.6 million**, with proceeds for general corporate purposes[265](index=265&type=chunk) - On July 16, 2021, **7,022,230** shares of common stock, valued at **$102,000,000**, were issued for the Novellus acquisition[266](index=266&type=chunk) - These securities were issued in reliance on the exemption from registration under Section 4(a)(2) and/or Regulation D of the Securities Act of 1933[267](index=267&type=chunk) [Item 6. Exhibits.](index=41&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, acquisition agreements, employment agreements, equity incentive plans, certifications, and XBRL interactive data files - The exhibits include various corporate documents such as the Restated Certificate of Incorporation, Amended and Restated Bylaws, and Certificates of Amendment/Validation[271](index=271&type=chunk) - Key agreements like the Agreement and Plan of Acquisition (Novellus), Registration Rights Agreement, and Executive Employment Agreements are also listed[271](index=271&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act) and Inline XBRL documents are included[271](index=271&type=chunk) [Signatures](index=42&type=section&id=Signatures) This section contains the duly authorized signature of Brooklyn ImmunoTherapeutics, Inc. for the Form 10-Q report - The report is signed by Howard J. Federoff, Chief Executive Officer and President, on November 12, 2021[276](index=276&type=chunk)
Eterna Therapeutics (ERNA) - 2021 Q2 - Quarterly Report
2021-08-13 21:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 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 number: 001-11460 Brooklyn ImmunoTherapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware ...
Eterna Therapeutics (ERNA) - 2021 Q1 - Quarterly Report
2021-05-17 20:06
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 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 number: 001-11460 Brooklyn ImmunoTherapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware ...
Eterna Therapeutics (ERNA) - 2020 Q4 - Annual Report
2021-03-11 22:07
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 Commission File Number 1-11460 | --- | --- | --- | --- | |---------------------------------------|--------------------------------------------|--------------------------|-----------------------------------| | | NTN (Exact name of registrant as | Buzztime, Inc. specified | in its charter) | | Delaware ...