cmpx20220930

cmpx20220930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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

☐	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: 001-39696

COMPASS THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

82-4876496

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

80 Guest St., Suite 601

Boston, Massachusetts

02135

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 500-8099

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

CMPX

NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 (§232.405 of this chapter) 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	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 Exchange Act). Yes ☐ No ☒

As of November 7, 2022, the registrant had 126,191,473 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets (Unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
Signatures		28

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Compass Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except par value)

	September 30, 2022 (unaudited)			December 31, 2021 (Note 1)
Assets
Current assets:
Cash and cash equivalents	$	16,481		$	144,514
Marketable securities		104,121			—
Prepaid expenses and other current assets		1,952			2,591
Total current assets		122,554			147,105
Property and equipment, net		1,708			2,243
Operating lease, right-of-use ("ROU") asset		3,256			4,089
Other assets		320			320
Total assets	$	127,838		$	153,757
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,761		$	867
Accrued expenses		5,742			8,775
Operating lease obligations, current portion		1,075			989
Total current liabilities		9,578			10,631
Operating lease obligations, long-term portion		2,144			3,048
Total liabilities		11,722			13,679
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock, $0.0001 par value: 300,000 shares authorized; 101,286 and 101,303 shares issued at September 30, 2022 and December 31, 2021, respectively; 101,032 and 100,832 shares outstanding at September 30, 2022 and December 31, 2021, respectively		10			10
Additional paid-in-capital		377,967			373,657
Accumulated other comprehensive loss		(641	)		—
Accumulated deficit		(261,220	)		(233,589	)
Total stockholders' equity		116,116			140,078
Total liabilities and stockholders' equity	$	127,838		$	153,757

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Compass Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	9,791		$	3,154		$	20,069		$	10,763
General and administrative		2,807			2,700			8,698			7,500
In-process R&D		—			—			—			50,618
Total operating expenses		12,598			5,854			28,767			68,881
Loss from operations		(12,598	)		(5,854	)		(28,767	)		(68,881	)
Other income (expense), net		623			(121	)		1,136			(306	)
Loss before income tax expense		(11,975	)		(5,975	)		(27,631	)		(69,187	)
Income tax expense		—			—			—			(13	)
Net loss	$	(11,975	)	$	(5,975	)	$	(27,631	)	$	(69,200	)
Net loss per share - basic and diluted	$	(0.12	)	$	(0.10	)	$	(0.27	)	$	(1.26	)
Basic and diluted weighted average shares outstanding		101,010			61,694			100,939			55,003

Other comprehensive loss:
Net loss	$	(11,975	)	$	(5,975	)	$	(27,631	)	$	(69,200	)
Unrealized loss on marketable securities		(129	)		—			(641	)		—
Comprehensive loss	$	(12,104	)	$	(5,975	)	$	(28,272	)	$	(69,200	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Compass Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands)

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2021		100,832	$	10	$	373,657	$	—		$	(233,589	)	$	140,078
Vesting of share-based awards		73		—		—		—			—			—
Stock-based compensation		—		—		1,574		—			—			1,574
Net loss		—		—		—		—			(7,162	)		(7,162	)
Balance at March 31, 2022		100,905		10		375,231		—			(240,751	)		134,490
Vesting of share-based awards		63		—		—		—			—			—
Stock-based compensation		—		—		1,444		—			—			1,444
Unrealized loss on marketable securities		—		—		—		(512	)		—			(512	)
Net loss		—		—		—		—			(8,494	)		(8,494	)
Balance at June 30, 2022		100,968		10		376,675		(512	)		(249,245	)		126,928
Vesting of share-based awards		62		—		—		—			—			—
Stock-based compensation		—		—		1,287		—			—			1,287
Exercise of common stock options		2		—		5		—			—			5
Unrealized loss on marketable securities		—		—		—		(129	)		—			(129	)
Net loss		—		—		—		—			(11,975	)		(11,975	)
Balance at September 30, 2022		101,032	$	10	$	377,967	$	(641	)	$	(261,220	)	$	116,116

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Loss		Deficit			Equity
Balance at December 31, 2020		51,221	$	5	$	191,348	$	—	$	(151,408	)	$	39,945
Vesting of share-based awards		92		—		—		—		—			—
Stock-based compensation		—		—		948		—		—			948
Net loss		—		—		—		—		(7,422	)		(7,422	)
Balance at March 31, 2021		51,313		5		192,296		—		(158,830	)		33,471
Common shares issued for TRIGR acquisition		10,265		1		50,299		—		—			50,300
Vesting of share-based awards		88		—		—		—		—			—
Stock-based compensation		—		—		908		—		—			908
Net loss		—		—		—		—		(55,804	)		(55,804	)
Balance at June 30, 2021		61,666		6		243,503		—		(214,634	)		28,875
Vesting of share-based awards		94		—		—		—		—			—
Stock-based compensation		—		—		987		—		—			987
Net loss		—		—		—		—		(5,975	)		(5,975	)
Balance at September 30, 2021		61,760	$	6	$	244,490	$	—	$	(220,608	)	$	23,888

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Compass Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	For the Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(27,631	)	$	(69,200	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		587			442
Gain on disposal of equipment		(70	)		(75	)
Noncash interest expense		—			35
Share-based compensation		4,305			2,843
Amortization of premium and discount on marketable securities		(190	)		—
Write-off of in-process R&D		—			50,618
ROU asset amortization		833			786
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		639			63
Accounts payable		1,894			(193	)
Accrued expenses		(3,033	)		427
Operating lease liability		(818	)		(747	)
Net cash used in operating activities		(23,484	)		(15,001	)
Cash flows from investing activities:
Purchases of property and equipment		(158	)		(791	)
Purchases of marketable securities		(117,332	)		—
Proceeds from sale or maturities of marketable securities		12,760			—
Asset acquisition costs		—			(318	)
Proceeds from sale of equipment		176			115
Net cash used in investing activities		(104,554	)		(994	)
Cash flows from financing activities:
Proceeds from issuance of common stock		5			—
Repayment of borrowings under loan		—			(5,625	)
Net cash provided by (used in) financing activities		5			(5,625	)
Net change in cash, cash equivalents and restricted cash		(128,033	)		(21,620	)
Cash, cash equivalents and restricted cash at beginning of period		144,514			47,339
Cash, cash equivalents and restricted cash at end of period	$	16,481		$	25,719
Supplemental disclosure of cash flow information
Cash paid for interest	$	—		$	226
Supplemental disclosure of cash flow information
ROU asset acquired through operating leases	$	—		$	5,148
Unrealized loss on marketable securities	$	641		$	—
Acquisition of Trigr Therapeutics, Inc.	$	—		$	50,300

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Compass Therapeutics, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

1. Nature of Business and Basis of Presentation

Compass Therapeutics, Inc. (“Compass” or the “Company”) is a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics to treat multiple human diseases. Our scientific focus is on the relationship between angiogenesis and the immune system. Our pipeline includes novel product candidates that leverage our understanding of the tumor microenvironment, including both angiogenesis-targeted agents and immune-oncology focused agents. These product candidates are designed to optimize critical components required for an effective anti-tumor response to cancer. These include modulation of the microvasculature via angiogenesis-targeted agents; induction of a potent immune response via activators on effector cells in the tumor microenvironment; and alleviation of immunosuppressive mechanisms used by tumors to evade immune surveillance. We plan to advance our product candidates through clinical development as both standalone therapies and in combination with our proprietary drug candidates as long as their continued development is supported by clinical and nonclinical data. References to Compass or the Company herein include Compass Therapeutics, Inc. and its wholly-owned subsidiaries. The Company was incorporated as Olivia Ventures, Inc. (“Olivia”) in the State of Delaware on March 20, 2018. Prior to the Company’s reverse merger with Compass Therapeutics LLC (the “Merger”), Olivia was a “shell company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended).

The Company is subject to risks and uncertainties common to companies in the biotechnology and pharmaceutical industries. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s consolidated financial position as of September 30, 2022 and its consolidated results of operations, comprehensive loss and changes in stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

The unaudited condensed consolidated financial statements include the accounts of Compass Therapeutics, Inc. and its subsidiaries, and have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”).

Liquidity

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations. To date, we have funded our operations primarily with proceeds from the sale of our equity securities and borrowings from debt arrangements. Through September 30, 2022, we have received $329.0 million in gross proceeds from the sale of equity securities. As of September 30, 2022, we had cash, cash equivalents and marketable securities of $120.6 million. On November 2, 2022, the Company issued additional common stock pursuant to a private investment in public equity ("PIPE") offering with gross proceeds of $80.3 million (see Note 11). Based on our research and development plans, we expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into 2026.

COVID-19 Update

We have been carefully monitoring the COVID-19 pandemic and its potential impact on our business and have taken important steps to help ensure the safety of our employees and to reduce the spread of COVID-19 community-wide. We are ensuring that essential staffing levels at our operations remain in place, including maintaining key personnel in our laboratory facilities. We have implemented stringent safety measures designed to create a safe and clean environment for our employees as we continue to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic.

There have been delays in sourcing of selected supplies required for the manufacturing of material to be used in our future clinical trials, and these delays have impacted and may continue to impact the timing of our future clinical trials. We expect that COVID-19 may continue to directly or indirectly impact: (i) our employees and business operations or personnel at third-party suppliers and other vendors in the U.S. and other countries; (ii) the availability, cost or supply of materials; and (iii) the timeline for our ongoing clinical trial and potential future trials. We are continuing to assess the potential impact of the COVID-19 pandemic on our current and future business and operations, including our expenses and clinical trials, as well as on our industry and the healthcare system.

2. Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report, except as noted below.

Marketable Securities

Marketable securities consist of available-for-sale debt securities and are carried at fair value. Unrealized holding gains and losses are reported within other comprehensive loss in the Company's Consolidated Statements of Comprehensive Loss. Fair value is based on available market information including quoted market prices, broker or dealer quotations, or other observable inputs.

Accounting Pronouncements not yet adopted

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments” which has subsequently been amended by ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-10, ASU No. 2019-11, and ASU No. 2020-03 (“ASU 2016-03”). This guidance replaces the incurred loss impairment methodology under current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 and must be adopted using a modified retrospective approach, with certain exceptions. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

The Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, on January 1, 2022. The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the federal tax laws. The adoption of ASU 2019-12 did not have any impact on the Company’s condensed consolidated financial statement presentation or disclosures.

3. Marketable Securities

The objectives of the Company’s investment policy are to ensure the safety and preservation of invested funds, as well as to maintain liquidity sufficient to meet cash flow requirements. The Company invests its excess cash in securities issued by financial institutions, commercial companies, and government agencies that management believes to be of high credit quality in order to limit the amount of its credit exposure. The Company has not realized any net losses from its investments.

Unrealized gains and losses on investments that are available for sale are recognized in accumulated comprehensive loss, unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations. The Company periodically reviews its investments for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes the individual unrealized losses represent temporary declines primarily resulting from interest rate changes. Realized gains and losses are included in other income (loss) in the condensed consolidated statements of operations and comprehensive loss and are determined using the specific identification method with transactions recorded on a trade date basis. The Company classifies marketable securities that are available for use in current operations as current assets on the condensed consolidated balance sheet.

The following tables summarize marketable securities held at September 30, 2022 (in thousands):

	Fair Value Measurements as of September 30, 2022 Using:
	Amortized Cost		Unrealized gains		Unrealized Losses			Fair Value
Assets
Corporate bonds	$	70,058	$	—	$	(506	)	$	69,552
Commercial paper		20,825		—		(50	)		20,775
Certificates of Deposit		7,487		—		(39	)		7,448
Asset-backed securities		6,392		—		(46	)		6,346
Total assets	$	104,762	$	—	$	(641	)	$	104,121

	As of
	September 30, 2022
Maturing in one year or less	$	86,552
Maturing after one year through two years		17,569
Total	$	104,121

There were no marketable securities as of December 31, 2021.

4. Fair Value Measurements

The following tables represent the Company’s financial assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

	Fair Value Measurements as of September 30, 2022 Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
Assets
Corporate bonds	$	—	$	69,552	$	—	$	69,552
Commercial paper		20,775		—		—		20,775
Certificates of deposit		—		7,448		—		7,448
Asset-backed securities		—		6,346		—		6,346
Cash and cash equivalents		16,481		—		—		16,481
Total assets	$	37,256	$	83,346	$	—	$	120,602

	Fair Value Measurements as of December 31, 2021 Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
Assets
Cash and cash equivalents	$	130,005	$	—	$	—	$	130,005
Total assets	$	130,005	$	—	$	—	$	130,005

5. Property and Equipment

Property and equipment consist of the following (in thousands):

	September 30, 2022			December 31, 2021
Equipment	$	5,087		$	5,351
Leasehold improvements		1,607			1,531
Software		364			365
Furniture and fixtures		22			22
Total property and equipment–at cost		7,080			7,269
Less: Accumulated depreciation		(5,372	)		(5,026	)
Property and equipment, net	$	1,708		$	2,243

Depreciation expense for the three months ended September 30, 2022 and 2021 was $0.2 million and $0.1 million, respectively. Depreciation expense for the nine months ended September 30, 2022 and 2021 was $0.6 million and $0.4 million, respectively.

6. Accrued Expenses

Accrued expenses consist of the following (in thousands):

	September 30,		December 31,
	2022		2021
Compensation and benefits	$	1,218	$	1,601
Project expenses		4,436		704
Accrued milestone		—		6,000
Other		88		470
Total accrued expenses	$	5,742	$	8,775

7. Commitments and Contingencies

Leases

The Company adopted ASU 2016-02, Leases (Topic 842), effective January 1, 2021, using the modified retrospective transition method, in which the new standard is applied as of the date of initial adoption. The Company recognized and measured agreements executed prior to the date of initial adoption that were considered leases on January 1, 2021. No cumulative effect adjustment of initially applying the standard to the opening balance of retained earnings was made upon adoption. The Company elected the package of practical expedients permitted under the transition guidance that will retain the lease classification and initial direct costs for any leases that exist prior to adoption of the standard. In addition, the Company elected the accounting policy of not recording short-term leases with a lease term at the commencement date of 12 months or less on the condensed consolidated balance sheet as permitted by the new standard.

The Company has evaluated its leases and determined that it has one lease that is classified as an operating lease. The classification of this lease is consistent with the Company’s determination under the previous accounting standard.

When available, the Company will use the rate implicit in the lease to discount lease payments to present value; however, the Company’s current lease does not provide an implicit rate. Therefore, the Company used its incremental borrowing rate to discount the lease payments based on the date of the lease commencement.

The Company has one operating lease for its corporate office and laboratory facility (“Facility”) that was signed in December 2020. The Company moved into the Facility in January 2021. The Facility lease has an initial term of four years and five months, beginning on January 1, 2021. The Facility lease contains scheduled rent increases over the lease term. The discount rate used for the Facility lease is 6.25%, and the remaining lease term of the Facility lease is two years and eight months as of September 30, 2022.

The table below presents the undiscounted cash flows for the lease term. The undiscounted cash flows are reconciled to the operating lease liabilities recorded on the condensed consolidated balance sheet (000's):

Remainder of 2022	$	219
Years ending December 31,
2023		1,345
2024		1,379
2025		543
Total minimum lease payments		3,486
Less: amount of lease payments representing interest		(267	)
Present value of future minimum lease payments		3,219
Less: operating lease obligations, current portion		(1,075	)
Operating lease obligations, long-term portion	$	2,144

Milestone payments

As part of the ABL Bio Agreement (see Note 10), the Company is obligated to pay certain development milestone payments. In the fourth quarter of 2021, the Company was notified of the completion of Phase 1 of the clinical trial for CTX-009. In the third quarter of 2022, the Company paid a $6.0 million milestone payment to ABL Bio based on delivery of the final report related to completion of Phase 1 of the clinical trial.

8. Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021 was classified in the condensed consolidated statement of operations as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(000’s)				(000’s)
Research and development	$	170	$	178	$	718	$	476
General and administrative		1,117		809		3,587		2,367
Total	$	1,287	$	987	$	4,305	$	2,843

As of September 30, 2022, remaining unrecognized stock-based compensation cost from all plans to be recognized in future periods totaled $11.5 million.

Restricted Stock:

Prior to the adoption of the 2020 Plan, the Company issued restricted stock. A summary of the Company’s restricted stock activity during the nine months ended September 30, 2022 is as follows:

	Shares			Fair Value
Weighted Average Fair Value	(000's)			Per Share
Unvested, December 31, 2021		471		$	1.76
Granted		—		$	—
Vested		(198	)	$	1.79
Forfeited or canceled		(20	)	$	1.77
Unvested, September 30, 2022		253		$	1.73

As of September 30, 2022, the total unrecognized compensation cost related to stock compensation expense for restricted stock is $0.4 million, expected to be recognized over a weighted average period of 1.1 years.

2020 Plan

In June 2020, the Company’s board of directors adopted the 2020 Stock Option and Incentive Plan (the “2020 Plan”) and reserved 2.9 million shares of common stock for issuance under this plan. The 2020 Plan includes automatic annual increases. The increase on January 1, 2022 was 4.2 million shares. As of September 30, 2022, 2.2 million shares remain available for future grant.

The 2020 Plan authorizes the board of directors or a committee of the board to grant incentive stock options, nonqualified stock options, restricted stock awards and restricted stock units ("RSUs") to eligible officers, employees, consultants and directors of the Company. Options generally vest over a period of four years and have a contractual life of 10 years from the date of grant.

Stock Options:

The following table summarizes the stock option activity for the 2020 Plan:

				Weighted		Weighted
	*Number of*			*Average*		*Average*		*Aggregate*
	*Unvested*			*Exercise*		*Remaining*		*Intrinsic*
	*Options*			*Price*		*Contractual*		*Value*
	*(000's)*			*Per Share*		*Term (in years)*		*($000's)*
Outstanding at December 31, 2021		3,659		$	4.99		8.67
Granted		2,277		$	2.30		9.38
Exercised		(2	)	$	1.56
Forfeited/canceled		(334	)	$	4.07
Outstanding at September 30, 2022		5,600		$	3.97		8.70	$	277
Vested at September 30, 2022		2,472		$	4.74		8.22	$	19

For the nine months ended September 30, 2022, the weighted average grant date fair value for options granted was $2.30. The intrinsic value for options vested as of September 30, 2022, was $19 thousand. As of September 30, 2022, the total unrecognized compensation cost related to outstanding options was $7.5 million, to be recognized over a weighted average period of 2.8 years.

For the nine months ended September 30, 2021, the weighted average grant date fair value for options granted was $3.82. There was no intrinsic value for options vested as of September 30, 2021.

The weighted average assumptions used in the Black-Scholes pricing model to determine the fair value of stock options granted during the nine months ended September 30, 2022 and 2021 were as follows:

	Nine Months Ended September 30,
	2022			2021
Expected term (in years)		6.0			6.1
Risk-free rate		2.02	%		0.76	%
Expected volatility		94	%		90	%
Expected dividend yield		—			—

RSUs:

The following table summarizes the RSU activity for the 2020 Plan:

	Shares (000's)		Weighted Average Price Per Share		Weighted Average Fair Value ($000's)
Unvested, December 31, 2021		1,200	$	3.83	$	4,596
Granted		—		—		—
Vested		—		—		—
Forfeited or canceled		—		—		—
Unvested, September 30, 2022		1,200	$	3.83	$	4,596

Weighted average price per share is the weighted grant price based on the closing market price of each of the stock grants. The weighted average fair value is the weighted average share price times the number of shares.
As of September 30, 2022, remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $3.6 million, which is expected to be recognized over a weighted average period of 3.1 years.

9. Other Income (Expense)

Other income (expense) consisted of the following:

Three Months Ended

Nine Months Ended

September 30,

2022

SEC Form 10-Q filed by Compass Therapeutics Inc.