apto20210930

apto20210930_10q.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2021

☐ 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: 1-35447

APTOSE BIOSCIENCES INC.

(Exact Name of Registrant as Specified in Its Charter)

Canada
(State or other jurisdiction of incorporation or organization)

98-1136802
(I.R.S. Employer Identification No.)

251 Consumers Road, Suite 1105

Toronto, Ontario, Canada M2J 4R3
(Address of principal executive offices)

647-479-9828

(Registrant’s telephone number, including area code)

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 Shares, no par value	APTO	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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 12, 2021 the registrant had 88,948,744 common shares outstanding.

TABLE OF CONTENTS

	Page

PART I—FINANCIAL INFORMATION	1
Item 1 – Financial Statements	1
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3 – Qualitative and Quantitative Disclosures about Market Risk	31
Item 4 – Controls and Procedures	31
PART II—OTHER INFORMATION	32
Item 1 – Legal Proceedings	32
Item 1A – Risk Factors	32
Item 5 – Other Information	33
Item 6 – Exhibits	34
Signatures	35

PART I—FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Condensed Consolidated Interim Financial Statements

(Unaudited)

APTOSE BIOSCIENCES INC.

For the three and nine months ended September 30, 2021 and 2020

APTOSE BIOSCIENCES INC.

Condensed Consolidated Interim Statements of Financial Position

(Expressed in thousands of US dollars)

(unaudited)

	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	75,095		$	117,393
Investments		20,006			5,000
Prepaid expenses		1,034			2,554
Other current assets		131			129
Total current assets		96,266			125,076

Non-current assets:
Property and equipment		353			261
Right-of-use assets, operating leases		579			925
Total non-current assets		932			1,186

Total assets	$	97,198		$	126,262
Liabilities and Shareholders’ Equity

Current liabilities:
Accounts payable	$	1,630		$	2,171
Accrued liabilities		6,188			4,102
Current portion of lease liability, operating leases		482			539
Total current liabilities		8,300			6,812

Non-current liabilities:
Lease liability, operating leases		218			535
Total liabilities		8,518			7,347


Shareholders’ equity:
Share capital:
Common shares, no par value, unlimited authorized shares, 88,948,744 and 88,881,737 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		429,795			429,523
Additional paid-in capital		61,384			50,861
Accumulated other comprehensive loss		(4,316	)		(4,316	)
Deficit		(398,183	)		(357,153	)
Total shareholders’ equity		88,680			118,915

Total liabilities and shareholders’ equity	$	97,198		$	126,262

See accompanying notes to condensed consolidated interim financial statements (unaudited).

Subsequent events (note 12)

APTOSE BIOSCIENCES INC.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

(Expressed in thousands of US dollars, except for per common share data)

(unaudited)

	Three months ended September 30						Nine months ended September 30
	2021			2020			2021			2020
Revenue	$	-		$	-	$	$	-		$	-

Expenses:
Research and development		7,718			7,519			25,777			20,319
General and administrative		3,641			5,775			15,322			20,690
Operating expenses		11,359			13,294			41,099			41,009

Other income (expense):
Interest income		22			46			72			485
Foreign exchange gains/(losses)		4			(1	)		(3	)		(1	)
Total other income		26			45			69			484

Net loss	$	(11,333	)		(13,249	)	$	(41,030	)	$	(40,525	)

Other comprehensive gain/(loss):
Unrealized loss on securities available-for-sale		-			(2	)		-			(17	)
Total comprehensive loss	$	(11,333	)		(13,251	)	$	(41,030	)	$	(40,542	)


Basic and diluted loss per common share	$	(0.13	)	$	(0.15	)	$	(0.46	)	$	(0.51	)
Weighted average number of common shares outstanding used in the calculation of (in thousands)
Basic and diluted loss per common share		88,949			85,860			88,927			79,477

See accompanying notes to condensed consolidated interim financial statements (unaudited).

APTOSE BIOSCIENCES INC.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

(Expressed in thousands of US dollars, except for per common share data)

(unaudited)

	Common Shares				Additional			Accumulated other
	Shares (thousands)		Amount			paid-in capital			comprehensive loss			Deficit			Total
Balance, December 31, 2020		88,882	$	429,523	$	50,861		$	(4,316	)	$	(357,153	)	$	118,915
Common shares issued upon exercise of stock options		67		272		(112	)		-			-			160
Stock-based compensation		-		-		10,635			-			-			10,635
Net loss		-		-		-			-			(41,030	)		(41,030	)
Balance, September 30, 2021		88,949	$	429,795	$	61,384		$	(4,316	)	$	(398,183	)	$	88,680
Balance, December 31, 2019		76,108	$	365,490	$	34,649		$	(4,298	)	$	(301,915	)	$	93,926
Common shares issued pursuant to the public offering		11,854		58,234		-			-			-			58,234
Common shares issued upon exercise of stock options		215		932		(401	)		-			-			531
Stock-based compensation		-		-		17,007			-			-			17,007
Common shares issued upon redemption of restricted share units		685		4,801		(4,801	)		-			-			-
Other comprehensive loss		-		-		-			(17	)		-			(17	)
Net loss		-		-		-			-			(40,525	)		(40,525	)
Balance, September 30, 2020		88,862	$	429,457	$	46,454		$	(4,315	)	$	(342,440	)	$	129,156

See accompanying notes to condensed consolidated interim financial statements (unaudited).

APTOSE BIOSCIENCES INC.

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of US dollars)

(unaudited)

	Three months ended September 30						Nine months ended September 30
	2021			2020			2021			2020
Cash flows from (used in) operating activities:
Net loss for the period	$	(11,333	)	$	(13,249	)	$	(41,030	)	$	(40,525	)
Items not involving cash:
Stock-based compensation		1,828			4,905			10,635			17,007
Depreciation and amortization		36			37			106			115
Amortization of right-of-use assets		119			116			353			345
Interest on lease liabilities		10			17			35			54
Unrealized foreign exchange (loss)/gain		4			-			(1	)		9
Accrued interest on investments		(3	)		9			(5	)		22
Change in non-cash operating working capital:
Prepaid expenses		788			(83	)		1,520			(81	)
Other assets		10			2			(2	)		26
Operating lease payments		(139	)		(136	)		(416	)		(401	)
Account payable		(1,284	)		(374	)		(541	)		(431	)
Accrued liabilities		1,905			486			2,086			320
Cash used in operating activities		(8,059	)		(8,270	)		(27,260	)		(23,540	)

Cash flows from (used in) financing activities:
Issuance of common shares pursuant to Public Offering, net of broker commission and agent legal fees		-			58,234			-			58,234
Issuance of common shares upon exercise of stock options		-			49			160			531
Cash provided by financing activities		-			58,283			160			58,765

Cash flows from (used in) investing activities:
Maturity (acquisition) of investments, net		(4	)		(4,398	)		(15,000	)		(15,278	)
Purchase of property and equipment		(181	)		-			(198	)		(53	)
Cash provided by (used in) investing activities		(185	)		(4,398	)		(15,198	)		(15,331	)

Effect of exchange rate fluctuations on cash and cash equivalents held		(4	)		-			-			(9	)

Decrease in cash and cash equivalents		(8,248	)		45,615			(42,298	)		19,885

Cash and cash equivalents, beginning of period		83,343			54,112			117,393			79,842
Cash and cash equivalents, end of period	$	75,095		$	99,727		$	75,095		$	99,727

See accompanying notes to condensed consolidated interim financial statements (unaudited).

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

1.	Reporting entity:

Aptose Biosciences Inc. (“Aptose” or the “Company”) is a clinical‑stage biotechnology company committed to discovering and developing personalized therapies addressing unmet medical needs in oncology. The Company’s executive offices are located in San Diego, California and its head office is located in Toronto, Canada.

Aptose has two clinical-stage programs and a second program that is discovery-stage and partnered with another company. Luxeptinib ( previously named CG-806), Aptose’s pan-FMS-like tyrosine kinase 3 / pan-Bruton’s tyrosine kinase inhibitor, is currently enrolling patients in a Phase 1, multicenter, open label, dose-escalation study with expansions to assess the safety, tolerability, PK, and preliminary efficacy of luxeptinib in patients with chronic lymphocytic leukemia (CLL/SLL) or non-Hodgkin lymphomas (NHL). Aptose was granted IND allowance from the U.S Food and Drug Administration (FDA) to initiate a separate Phase 1 trial in patients with relapse or refractory acute myeloid leukemia (AML) in June 2020, and this trial is also enrolling patients. APTO-253, Aptose’s second program, is a small molecule MYC inhibitor and is currently enrolling patients in a Phase 1b clinical trial for the treatment of patients with R/R blood cancers, including AML and high-risk Myelodysplastic Syndrome.

We are advancing first-in-class targeted agents to treat life-threatening cancers that, in most cases, are not elective for patients and require immediate treatment. However, COVID-19 has caused global economic and social disruptions that could adversely affect our ongoing and planned research and development of our clinical-stage programs including but not limited to drug manufacturing campaigns, clinical trial activities including enrollment of patients in our ongoing and planned clinical trials, collection and analysis of patient data and eventually, the reporting of results from our trials.

Since our inception, we have financed our operations and technology acquisitions primarily from equity financing, proceeds from the exercise of warrants and stock options, and interest income on funds held for future investment. Our uses of cash for operating activities have primarily consisted of salaries and wages for our employees, facility and facility-related costs for our offices and laboratories, fees paid in connection with preclinical and clinical studies, drug manufacturing costs, laboratory supplies and materials, and professional fees.

We do not expect to generate positive cash flow from operations for the foreseeable future due to the early stage of our clinical trials. It is expected that negative cash flow will continue until such time, if ever, that we receive regulatory approval to commercialize any of our products under development and/or royalty or milestone revenue from any such products exceeds expenses.

We believe that our cash, cash equivalents and investments on hand at September 30, 2021 will be sufficient to finance our operations for at least 12 months from the issuance date of these financial statements. Our cash needs for the next twelve months include estimates of the number of patients and rate of enrollment of our clinical trials, the amount of drug product that we will require to support our clinical trials, and our general corporate overhead costs to support our operations, and our reliance on our manufacturers. We have based these estimates on assumptions and plans which may change and which could impact the magnitude and/or timing of operating expenses and our cash runway.

Our ability to raise additional funds could be affected by adverse market conditions, the status of our product pipeline, possible delays in enrollment in our trial related to COVID-19, and various other factors and we may be unable to raise capital when needed, or on terms favorable to us. If necessary funds are not available, we may have to delay, reduce the scope of, or eliminate some of our development programs, potentially delaying the time to market for any of our product candidates.

2.	Significant accounting policies

(a)

Basis of consolidation:

These condensed consolidated interim financial statements include the accounts of its subsidiaries. All intercompany transactions, balances, revenue and expenses are eliminated on consolidation.

(b)

Basis of presentation:

The accompanying unaudited condensed consolidated interim financial statements have been prepared in conformity with generally accepted accounting principles in the United States, or GAAP, for the interim financial information and the rules and regulations of the Securities and Exchange Commission, or SEC, related to quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by GAAP for annual audited financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K, or Annual Report, filed with the SEC on March 23, 2021. In the opinion of management, these condensed consolidated interim financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for any future period, including the full year.

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

(c)

Significant accounting policies, estimates and judgments:

During the nine months ended September 30, 2021, there have been no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

The preparation of the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. Actual outcomes could differ from those estimates. The condensed consolidated interim financial statements include estimates, which, by their nature, are uncertain.

The impacts of such estimates are pervasive throughout the condensed consolidated interim financial statements and may require accounting adjustments based on future occurrences.

The estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

(d)

Foreign currency:

The functional and presentation currency of the Company is the US dollar.

(e)

Concentration of risk:

The Company is subject to credit risk from the Company’s cash and cash equivalents and investments. The carrying amount of the financial assets represents the maximum credit exposure. The Company manages credit risk associated with its cash and cash equivalents and investments by maintaining minimum standards of R1‑low or A‑low investments and the Company invests only in highly rated corporations and treasury bills, which are capable of prompt liquidation.

3.	Cash and cash equivalents:

Cash and cash equivalents consists of cash of $180 thousand ( December 31, 2020 ‑ $329 thousand), deposits in high interest savings accounts, money market funds and accounts with maturities less than 90 days totaling $74.915 million ( December 31, 2020 ‑ $117.064 million).

4.	Prepaid expenses:

	September 30,		December 31,
	2021		2020
Prepaid research and development expenses	$	843	$	622
Other prepaid expenses		191		1,932
	$	1,034	$	2,554

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

5.	Right-of-use assets:

	Nine months ended September 30, 2021			Year ended December 31, 2020
Right-of-use assets, beginning of period	$	1,848		$	1,837
Additions to right-of-use assets		7			11
Right-of-use assets, end of period		1,855			1,848
Accumulated amortization		(1,276	)		(923	)
Right-of use assets, NBV	$	579		$	925

6.	Investments:

Investments consisted of the following as of September 30, 2021 and December 31, 2020:

	September 30, 2021
	Cost		Unrealized gain		Market value
Guaranteed Investment Certificate	$	20,006		-		20,006
	$	20,006		-		20,006

	December 31, 2020
	Cost		Unrealized gain		Market value
United States Treasury Bills	$	5,000		-		5,000
	$	5,000		-		5,000

7.	Fair value measurements and financial instruments:

The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.

Level 1 ‑ inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 ‑ inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data or other means; and

Level 3 ‑ inputs are unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

The following table presents the fair value of the Company’s financial instruments for the periods presented:

	September 30, 2021		Level 1		Level 2		Level 3
Assets

Money Market accounts	$	682	$	-	$	682	$	-
Money Market Funds		35,801		-		35,801		-
High interest savings accounts		18,433		-		18,433		-
Government of Canada Treasury Bill		19,999		-		19,999		-
Guaranteed Investment Certificate		20,006				20,006
	$	94,921	$	-	$	94,921	$	-

	December 31, 2020		Level 1		Level 2		Level 3
Assets

Money Market accounts	$	668	$	-	$	668	$	-
Money Market Funds		44,000		-		44,000		-
High interest savings accounts		48,397		-		48,397		-
United States Treasury Bill		5,000		-		5,000		-
Government of Canada Treasury Bill		23,999		-		23,999		-
	$	122,064	$	-	$	122,064	$	-

8.	Accrued liabilities:

Accrued liabilities as of September 30, 2021 and December 31, 2020 consisted of the following:

	September 30,		December 31,
	2021		2020
Accrued personnel related costs	$	1,741	$	1,917
Accrued research and development expenses		3,783		1,932
Other accrued expenses		664		253
	$	6,188	$	4,102

9.	Lease liability

Aptose leases office space and lab space in San Diego, California. The lease for the office space expires on March 31, 2023 and can be extended for an additional 5 year period. The lease for our lab space expires on February 28, 2022. We lease office space in Toronto, Ontario, Canada and the lease for this location expires on June 30, 2023 with an option to renew for another 5-year period. The Company has not included any extension periods in calculating its right-to-use assets and lease liabilities. The Company also enters into leases for small office equipment.

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

Minimum payments, undiscounted, under our operating leases are as follows:

Years ending December 31,
2021	$	139
2022		467
2023		120
Thereafter		-
	$	726

To calculate the lease liability, the lease payments in the table above were discounted over the remaining term of the leases using the Company’s incremental borrowing rate as at January 1, 2019 for existing leases at the time of adopting the Topic 842, and for new leases after the date adoption, as at the date of the execution date of the new lease. The following table presents the weighted average remaining term of the leases and the weighted average discount rate:

	September 30,			December 30,
	2021			2020
Weighted-average remaining term – operating leases (in years)	1.4			2.1
Weighted-average discount rate – operating leases		5.39	%		5.40	%
Lease liability, current portion	$	482		$	539
Lease liability, long term portion		218			535
Lease liability, total	$	700		$	1,074

Operating lease costs and operating cash flows from our operating leases are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020

Operating lease cost	$	129	$	132	$	388	$	399
Operating cash flows from operating leases	$	139	$	136	$	416	$	401

10.

Share capital:

The Company has authorized share capital of an unlimited number of common voting shares.

(a)

Equity issuances:

(i)

July/August 2020 Confidentially Marketed Public Offering (CMPO)

On July 20, 2020 and August 10, 2020, the Company completed a confidentially marketed public offering through the issuance of 11,854,472 common shares at a price of $5.25 per share for gross proceeds of $62.236 million (approximately $58.234 million net of share issue costs). Costs associated with the proceeds consisted of a 6% cash commissions and share issue costs, which consisted of agent commission, legal and professional fees and listing fees.

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

(ii)

2020 At‑The‑Market (“ATM”) Facility

On May 5, 2020, the Company entered into an equity distribution agreement with Piper Sandler and Canaccord Genuity acting as co-agents in connection with the 2020 ATM Facility. Under the terms of the 2020 ATM Facility, the Company may, from time to time, sell Common Shares having an aggregate offering value of up to $75 million through Piper Sandler and Canaccord Genuity on the Nasdaq Capital Market. During the year ended December 31, 2020 and in the nine months period ended September 30, 2021, the Company did not issue any shares under the 2020 ATM Facility.

(b)

Loss per share:

Loss per common share is calculated using the weighted average number of common shares outstanding and is presented in the table below:

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020

Net loss	$	(11,333	)	$	(13,249	)	$	(41,030	)	$	(40,525	)
Weighted-average common shares – basic and diluted		88,949			85,860			88,927			79,477
Net loss per share – basic and diluted	$	(0.13	)	$	(0.15	)	$	(0.46	)	$	(0.51	)

The effect of any potential exercise of the Company’s stock options outstanding during the three and nine-month periods ended September 30, 2021 and September 30, 2020 has been excluded from the calculation of diluted loss per common share as it would be anti‑dilutive.

11.

Stock‑based compensation:

(a)

Stock option plan and employee stock purchase plan

Effective June 1, 2021, the Company adopted a new stock incentive plan (New Incentive Plan) and an employee stock purchase plan (ESPP).

The New Incentive Plan authorizes the Board of Directors to administer the New Incentive Plan to provide equity‑based compensation in the form of stock options, stock appreciation rights., restricted stock, restricted stock units and Dividend Equivalents.

The Corporation currently maintains its existing Share Option Plan and 2015 Stock Incentive Plan (2015 SIP). Effective June 1, 2021 no further grants will be made under the Share Option Plan or 2015 SIP, though existing grants under the Share Option Plan will remain in effect in accordance with their terms.

The aggregate number of our common shares, no par value, that may be issued under all awards under the New Incentive Plan is (i) 6,343,242, plus (ii) any of our common shares subject to any outstanding award under our prior plans that, after June 1, 2021, are not purchased or are forfeited or reacquired by us, or otherwise not delivered to the participant due to termination, cancellation or cash settlement of such award subject to the share counting provisions of the New Incentive Plan.

Under both the Share Option Plan and the New Incentive Plan, the exercise price of each option equals the closing trading price of the Company’s stock on the day prior to the grant if the grant is made during the trading day or the closing trading price on the day of grant if the grant is issued after markets have closed. Vesting is provided for at the discretion of the Board of Directors and the expiration of options is to be no greater than 10 years from the date of grant.

The Company uses the fair value based method of accounting for employee awards granted under both plans. The Company calculates the fair value of each stock option grant using the Black‑Scholes option pricing model at the grant date. The stock‑based compensation cost of the options is recognized as stock‑based compensation expense over the relevant vesting period of the stock options using an estimate of the number of options that will eventually vest.

APTOSE BIOSCIENCES INC.

Notes to Condensed Consolidated Interim Financial Statements (unaudited)

Three and nine months ended September 30, 2021 and 2020

(Tabular amounts in thousands of United States dollars, except as otherwise noted)

The ESPP, which will be administered by the Board of Directors, allows eligible employees of the Company with an opportunity to purchase Common Shares through accumulated payroll deductions up to a maximum 15% of eligible compensation. The ESPP will be implemented by consecutive offering periods with a new offering period commencing on the first trading day on or after February 1 and August 1 each year, or on such other date as the Board of Directors will determine, and continuing thereafter until terminated in accordance with the Plan. Unless the Board of Directors provides otherwise, the purchase price will be equal to eighty‑five percent (85%) of the fair market value of a Common Share on the offering date or the exercise date, whichever is lower.

The maximum number of Common Shares which will be made available for sale under the ESPP will be 1,700,000 Common Shares.

The Company has not established a first offering period; there are no options outstanding under the ESPP as of September 30, 2021.

Stock option transactions for the nine months ended September 30, 2021 and September 30, 2020, are summarized as follows:

Option numbers are in (000’s)
				Nine months ended September 30, 2021
	Options			Weighted average exercise price		Weighted average remaining contractual life (years)
Outstanding, beginning of period		11,942		$	4.97
Granted		4,199			4.04
Exercised		(67	)		2.39
Forfeited		(1,205	)		5.47
Outstanding, end of the period		14,869			4.68		6.8
Exercisable, end of the period		8,092			4.55		5.5
Vested and expected to vest, end of period		13,851			4.67		6.7

Option numbers are in (000’s)

Nine months ended

September 30, 2020

Options

Weighted average

exercise price

Weighted average

remaining
contractual life
(years)

Outstanding, beginning of period

SEC Form 10-Q filed by Aptose Biosciences, Inc.