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

☐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 001-38128

CHECKPOINT THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware		47-2568632
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

95 Sawyer Road, Suite 110, Waltham, MA 02453

(Address of principal executive offices and zip code)

(781) 652-4500

(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 Stock, par value $0.0001 per share	CKPT	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 definition 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 registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.


Class of Common Stock		Outstanding Shares as of May 9, 2022
Class A Common Stock, $0.0001 par value		7,000,000
Common Stock, $0.0001 par value		84,026,442

Table of Contents

CHECKPOINT THERAPEUTICS, INC.

Form 10-Q

For the Quarter Ended March 31, 2022

Table of Contents

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	3

	Condensed Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited)	4

	Condensed Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021 (unaudited)	5

	Condensed Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	6

	Notes to Condensed Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of the Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	22

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Recent Sales of Unregistered Securities	55

Item 6.	Exhibits	56

Signatures		57

Table of Contents

SUMMARY OF RISK FACTORS

Our business is subject to risks of which you should be aware before making an investment decision. The risks described below are a summary of the principal risks associated with an investment in us and are not the only risks we face. You should carefully consider these risk factors, the risk factors described in Item 1A, and the other reports and documents that we have filed with the Securities and Exchange Commission (“SEC”).

Risks Related to our Finances and Capital Requirements

●

We have incurred significant losses since our inception and anticipate that we will incur continued losses for the foreseeable future. We have not generated any sales revenue from our development stage products, and we do not know when, or if, we will generate any revenue from sales of an approved product.

●

Our short operating history makes it difficult to evaluate our business and prospects.

●

Our success is contingent upon raising additional capital for our development programs and commercialization efforts, which may fail. Even if successful, our future capital raising activities may dilute our current stockholders, restrict our operations, or require us to relinquish proprietary rights.

●

Our limited resources may cause us to fail to capitalize on programs or product candidates presenting commercial opportunity or high likelihood of success.

Risks Pertaining to our Business Strategy, Structure and Organization

●

Our future growth and success depend on our ability to successfully develop and commercialize our product candidates, which we have yet to do.

●

Our future growth depends on our acquiring or in-licensing products or product candidates and integrating such products into our business.

Risks Inherent in Drug Development and Commercialization

●

Because results of preclinical studies and early clinical trials are not necessarily predictive of future results, any product candidate we advance may not have favorable results in later clinical trials. Moreover, interim, “top-line,” and preliminary data from our clinical trials that we announce or publish may change, or the perceived product profile may be impacted, as more patient data or additional endpoints are analyzed.

●

We may not receive the required regulatory approvals for any of our product candidates on our projected timelines, if at all, which may result in increased costs and delay our ability to generate revenue.

●

If a product candidate demonstrates lack of efficacy or adverse side effects, we may need to abandon or limit the development of such product candidate.

●

We may not obtain the desired labeling claims or intended uses for product promotion, or favorable scheduling classifications, to successfully promote our products.

●

Even if a product candidate is approved, it may be subject to various post-marketing requirements, including studies or clinical trials, and increased regulatory scrutiny.

●

Our competitors have developed or may develop treatments for our products’ target indications, which could limit our product candidates’ commercial opportunity and profitability.

●

If our products are not broadly accepted by the healthcare community, the revenues from any such product will likely be limited.

●

Any successful products liability claim related to any of our current or future product candidates may cause us to incur substantial liability and limit the commercialization of such products.

Risks Related to Reliance on Third Parties

●

We rely, and will rely in the future, on third-party contract research organizations and contract manufacturers for the conduct of our preclinical and clinical studies and trials, for the completion of commercial and pre-commercial manufacturing and, eventually, for commercialization. If such third parties fail to perform contractual obligations, meet deadlines, comply with applicable regulations, or if our relationships with such third parties are disrupted, our product candidates may be delayed, and our revenue potential may be limited.

●

We rely on clinical data and results obtained by third parties, which may prove inaccurate or unreliable.

Table of Contents

Risks Relating to Legislation and Regulation Affecting the Biopharmaceutical and Other Industries

●

We operate in a heavily regulated industry, and we cannot predict the impact that any future legislation or administrative or executive action may have on our operations.

●

We may be subject to anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

Risks Pertaining to Intellectual Property and Potential Disputes with Licensors Thereof

●

If we are unable to maintain sufficient patent protection for our technology and products, our competitors could develop and commercialize products similar or identical to ours, impairing our ability to successfully commercialize potential products.

●

We or our licensors may be subject to costly and time-consuming litigation for infringement of third-party intellectual property rights or to enforce our or our licensors’ patents.

●

Any dispute with our licensors may affect our ability to develop or commercialize our product candidates.

Risks Relating to Our Platform and Data

●

Our business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our or third parties’ cybersecurity.

Risks Relating to Our Control by Fortress Biotech, Inc. (“Fortress”)

●

Fortress controls a voting majority of our common stock and has the right to receive significant share grants annually, which will result in dilution of our other stockholders and could reduce the value of our common stock.

●

We have entered into certain agreements with Fortress and may have received better terms from unaffiliated third parties.

Risks Related to Conflicts of Interest

●

The Chairman of our Board of Directors is also the Executive Chairman, President, and Chief Executive Officer of TG Therapeutics, Inc. (“TGTX”). We have entered a collaboration agreement and a sublicense agreement with TGTX, and as a result, certain conflicts of interest may arise.

●

We share certain directors with Fortress, which could create conflicts of interest between us and Fortress.

Table of Contents

Item 1. Financial Statements.

Checkpoint Therapeutics, Inc.

Condensed Balance Sheets

(in thousands, except share and per share amounts)


	March 31, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	41,476	$	54,735
Prepaid expenses and other assets		1,378		976
Other receivables - related party		52		17
Total current assets		42,906		55,728
Total Assets	$	42,906	$	55,728

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	21,675	$	24,919
Accounts payable and accrued expenses - related party		1,015		1,063
Total current liabilities		22,690		25,982
Total Liabilities		22,690		25,982

Commitments and Contingencies (note 5)

Stockholders’ Equity
Common Stock ($0.0001 par value), 135,000,000 shares authorized as of March 31, 2022 and December 31, 2021
Class A common shares, 7,000,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021		1		1
Common shares, 83,801,242 and 77,574,405 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		8		8
Common stock issuable, 0 and 2,121,422 shares as of March 31, 2022 and December 31, 2021, respectively		—		6,598
Additional paid-in capital		236,917		223,001
Accumulated deficit		(216,710)		(199,862)
Total Stockholders’ Equity		20,216		29,746
Total Liabilities and Stockholders’ Equity	$	42,906	$	55,728

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

Table of Contents

Checkpoint Therapeutics, Inc.

Condensed Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	For the three months ended March 31,
	2022		2021
Revenue - related party	$	52	$	68

Operating expenses:
Research and development		14,670		4,213
General and administrative		2,243		2,373
Total operating expenses		16,913		6,586
Loss from operations		(16,861)		(6,518)

Other income
Interest income		13		13
Total other income		13		13
Net Loss	$	(16,848)	$	(6,505)

Loss per Share:
Basic and diluted net loss per common share outstanding	$	(0.20)	$	(0.09)

Basic and diluted weighted average number of common shares outstanding		85,049,895		70,303,387

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

Table of Contents

Checkpoint Therapeutics, Inc.

Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)

(Unaudited)

For the Three Months Ended March 31, 2022


							Common		Additional				Total
	Class A Common Shares			Common Shares			Shares		Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Issuable		Capital		Deficit		Equity
Balances at December 31, 2021	7,000,000	$	1	77,574,405	$	8	$	6,598	$	223,001	$	(199,862)	$	29,746
Issuance of common shares, net of offering costs - At-the-market offering	—		—	3,741,939		—		—		8,045		—		8,045
Issuance of common shares - Founders Agreement	—		—	2,214,964		—		(6,598)		6,794		—		196
Stock-based compensation expense	—		—	918,500		—		—		775		—		775
Net settlement of shares withheld for payment of employee taxes	—		—	(648,566)		—		—		(1,698)		—		(1,698)
Net loss	—		—	—		—		—		—		(16,848)		(16,848)
Balances at March 31, 2022	7,000,000	$	1	83,801,242	$	8	$	—	$	236,917	$	(216,710)	$	20,216

For the Three Months Ended March 31, 2021

Common

Additional

Total

Class A Common Shares

Common Shares

Shares

Paid-in

Accumulated

Stockholders’

Shares

Amount

Shares

Amount

Issuable

Capital

Deficit

Equity

Balances at December 31, 2020

7,000,000

62,420,439

4,617

173,947

(143,192)

35,379

Issuance of common shares, net of offering costs - At-the-market offering

—

7,025,309

SEC Form 10-Q filed by Checkpoint Therapeutics Inc.