Subsequent Events

12 Months Ended

Dec. 31, 2021

17)	Subsequent Events

Private Placement of Equity

On March 6, 2022, the Company entered into a certain Securities Purchase Agreement (the “Purchase Agreement”) with an investor (the “PIPE Investor”) providing for the private placement (the “PIPE Transaction”) to a private investor (the “PIPE Investor”) of approximately 6,857,000 units (collectively, the “Units”), each Unit consisting of (i) one share of our common stock (or, in lieu thereof, one pre-funded warrant (the “Pre-Funded Warrants”) to purchase one share of common stock) and (ii) one warrant (the “Common Warrants”) to purchase one share of common stock, for an aggregate gross purchase price of approximately $12.0 million. The PIPE Transaction closed on March 9, 2022.

Each Pre-Funded Warrant has an exercise price of $0.005 per share of common stock, was immediately exercisable and may be exercised at any time and has no expiration date and is subject to customary adjustments. The Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 9.99% immediately after exercise thereof.

Each Common Warrant has an exercise price of $1.91 per share, becomes exercisable six months following the closing of the PIPE Transaction, and expires five-and-one-half years from the date of issuance, and is subject to customary adjustments. The Common Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, subject to increase to 9.99% at the option of the holder.

In connection with the PIPE Transaction, the Company and the PIPE Investor also entered into a registration rights agreement, dated March 6, 2022, pursuant to which the Company agreed to prepare and file a registration statement with the SEC no later than 15 days following the filing date of this Annual Report on Form 10-K to register the resale of the shares of common stock included in the Units and the shares of common stock issuable upon exercise of the Pre-Funded Warrants and the Common Warrants. The Company agreed to use its best efforts to have such registration statement declared effective as promptly as possible after the filing thereof, subject to certain specified penalties if timely effectiveness is not achieved.

Reduction in Force

On January 3, 2022, the Company completed a reduction in force (the “Reduction”), comprising eight employees (53% of our workforce at that time), effective January 3, 2022, which was the date on which the Company notified such employees of their termination. The Company believes the Reduction, which was approved by its Board of Directors, will enable the Company to better align its workforce with the needs of its business and focus more of its capital resources on the Company’s cell therapy and gene editing platform, as it continues to sustain its investment in the prosecution of IRX-2 through the end of the INSPIRE Phase 2B study. In connection with the Reduction, the Company estimates that it will incur approximately $500,000 for severance and termination-related costs, which the Company will record during the first quarter of 2022. The Company may also incur additional costs and non-cash charges that are not currently contemplated or determinable, which may occur as a result of the Reduction.

Lease Assignment

On March 5, 2022, the Company entered into an Agreement to Assign Space Lease with RegenLab USA LLC (“Regen”) pursuant to which the Company agreed to assign its Brooklyn, NY lease (the “Brooklyn Lease”) to Regen. The effective date of the assignment would be contingent upon, among other things, a consent from BioBat, Inc. (the “Landlord”) to assign the Brooklyn Lease. Additionally, Regen agreed to purchase certain equipment from the Company for $50,000, partly reimburse the Company $50,000 toward certain existing unamortized leasehold improvements, and to reimburse the Company for the existing security deposit the Company had under the Brooklyn Lease of approximately $63,000.

On March 25, 2022, the Company entered into an Assignment and Assumption of Lease Agreement (the “Assignment Agreement”) with Regen, the consent of which was provided by the Landlord in the Assignment Agreement. The effective date of the assignment was March 28, 2022. Under the Assignment Agreement, Regen (i) accepts the assignment of the Brooklyn Lease; (ii) assumes all of the obligations, liabilities, covenants and conditions of the Company’s as tenant under the Brooklyn Lease; (iii) assumes and agrees to perform and observe all of the obligations, terms, requirements, covenants and conditions to be performed or observed by the Company under the Brooklyn Lease; and (iv) makes all of the representations and warranties binding under the Brooklyn Lease with the same force and effect as if Regens had executed the Brooklyn Lease originally as the tenant.

Notwithstanding the above assumptions above by Regen, the Company shall be and remain liable and responsible for the due keeping, and full performance and observance, of all the provisions of the Brooklyn Lease on the part of the tenant to be kept, performed and observed. As a result of the Assignment Agreement, the Company will write off the remaining ROU asset balance and the corresponding lease liability as of March 25, 2022, and it will record any resulting gain or loss on the termination of the Brooklyn lease in its statement of operations. The Company does not expect to recognize a contingent liability for its ongoing obligation to remain liable and responsible for all the provisions of the Brooklyn Lease, as the Company has determined that it is not probable it will recognize a loss under the Assignment Agreement.

New Lease Agreement

On March 31, 2022, the Company entered into the Torrey Pines Science Center Lease in San Diego, California (the “San Diego Lease”) with Torrey Pines Science Center Limited Partnership for approximately 5,200 square feet of lab and office space. The term of the San Diego Lease is 62 months and the lease commencement date begins on the earlier to occur of (i) the date the Company first commences to conduct business in the premises or (ii) the possession date, which is anticipated to be August 1, 2022 (or earlier if the current tenant terminates its lease early). The lease commencement date was April 15, 2022.

Base rent is $6.35 per square foot in the first year of the San Diego Lease, with a rent abatement for the second and third full months of the first year. The base rent will increase by approximately 3% on each anniversary of the lease commencement date. The Company is also required to pay its share of operating expenses and property taxes. The San Diego Lease provides for a one-time option to extend the lease term for an additional five years at the then fair rental value.