Eterna Therapeutics Inc. - Quarter Report: 2021 June (Form 10-Q)

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

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

Delaware		31-1103425
(State of incorporation)		(I.R.S. Employer Identification No.)

140 58th Street, Suite 2100, Brooklyn, New York		11220
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading symbol		Name of each exchange on which registered
Common stock, $0.005 par value per share		BTX		NYSE American

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

TABLE OF CONTENTS

In this report, “Brooklyn” refers to Brooklyn ImmunoTherapeutics, Inc. (formerly known as NTN Buzztime, Inc.) and “Brooklyn LLC” refers to Brooklyn ImmunoTherapeutics LLC, a wholly owned subsidiary of Brooklyn Inc. All references to “our company,” “we,” “us” or “our” mean Brooklyn Inc. and its subsidiaries, including Brooklyn LLC, unless stated otherwise or the context otherwise requires.

BROOKLYN IMMUNOTHERAPEUTICS, INC.

 CONDENSED CONSOLIDATED BALANCE SHEETS

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

(unaudited)

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

		Membership Equity																Accumulated
		Class A				Class B				Class C				Common				Deficit				Total
Balances at April 1, 2020		$	18,490,192			$	1,400,000			$	1,000,000			$	129,671			$	(11,960,738	)		$	9,059,125
Stock based compensation:			-				-				-				22,734				-				22,734
Sale of members’ equity			4,711,813				-				-				-				-				4,711,813
Net loss			-				-				-				-				(2,033,446	)			(2,033,446	)
Balances at June 30, 2020		$	23,202,005			$	1,400,000			$	1,000,000			$	152,405			$	(13,994,184	)		$	11,760,226
Balances at January 1, 2020		$	18,177,692			$	1,400,000			$	1,000,000			$	106,937			$	(10,941,526	)		$	9,743,103
Stock based compensation			-				-				-				45,468				-				45,468
Sale of members’ equity			5,024,313				-				-				-				-				5,024,313
Net loss			-				-				-				-				(3,052,658	)			(3,052,658	)
Balances at June 30, 2020		$	23,202,005			$	1,400,000			$	1,000,000			$	152,405			$	(13,994,184	)		$	11,760,226

BROOKLYN IMMUNOTHERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the six months ended June 30,
		2021				2020
Cash flows used in operating activities:
Net loss		$	(27,787,651	)		$	(3,052,658	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			63,485				47,638
Stock-based compensation			1,573,393				45,468
Amortization of right-to-use asset			148,702				-
Transaction costs - shares to Financial Advisor			5,765,407				-
Loss on sale of NTN assets			9,648,173				-
Change in fair value of contingent consideration			(820,000	)			-
Changes in operating assets and liabilities:
Account receivable			4,680				-
Prepaid expenses and other current assets			(1,509,284	)			(79,175	)
Security deposits and other non-current assets			(26,909	)			(84,915	)
Accounts payable and accrued expenses			2,844,135				(942,836	)
Operating lease liability			(138,895	)			(468	)
Other liabilities			-				10,324
Net cash used in operating activities			(10,234,764	)			(4,056,622	)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment			-				(26,177	)
Purchase of NTN, net of cash acquired			147,262				-
Proceeds from the sale of NTN assets, net of cash disposed			118,594				-
Net cash provided by (used in) investing activities			265,856				(26,177	)
Cash flows provided by financing activities:
Net proceeds of common stock issued to Lincoln Park			48,524,918				-
Proceeds from the exercise of stock options			10,202				-
Proceeds from loans payable			-				309,905
Repayment of NTN’s PPP Loan			(531,994	)			-
Proceeds from sale of members’ equity			10,500,000				3,858,750
Net cash provided by financing activities			58,503,126				4,168,655
Net increase in cash and cash equivalents			48,534,218				85,856
Cash and cash equivalents at beginning of period			1,630,455				5,100,819
Cash and cash equivalents at end of period		$	50,164,673			$	5,186,675
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	-			$	-
Income taxes		$	-			$	-
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock for Series A preferred stock dividend		$	7,806			$	-
Issuance of Common Stock for business combination		$	8,177,457			$	-
Forfeiture of unvested restricted stock		$	(60	)		$	-
Preferred shares issued in connection with reverse merger		$	781			$	-
Initial measurement of ROU assets and liabilities		$	873,629			$	-

BROOKLYN IMMUNOTHERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Description of Business

On March 26, 2021, Brooklyn sold (the “Disposition”) its rights, title and interest in and to the assets relating to the business it operated prior to the Merger, which was operated under the name “NTN Buzztime, Inc.,” to eGames.com Holdings LLC (“eGames.com”) in accordance with the terms of an asset purchase agreement dated September 18, 2020, as amended, between Brooklyn and eGames.com (the “Asset Purchase Agreement”). (See Note 3.)

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

As described above, the Merger closed on March 25, 2021. The Merger was accounted for as a reverse acquisition, with Brooklyn LLC being deemed the acquiring company for accounting purposes. Brooklyn LLC’s historical financial statements have replaced Brooklyn’s historical financial statements with respect to periods prior to the completion of the Merger (when Brooklyn operated under the name “NTN Buzztime, Inc.”. The Company retrospectively adjusted the weighted average shares used in determining loss per common share to reflect the conversion of the outstanding Class A units, Class B units, Class C units, and common units of Brooklyn LLC that converted into shares of Brooklyn’s common stock upon the Merger and to reflect the effect of the 2-to-1 reverse stock split of Brooklyn’s common stock that occurred upon the Merger.

 

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. The Company has incurred significant operating losses and has an accumulated deficit as a result of ongoing efforts to develop product candidates, including conducting clinical trials and providing general and administrative support for these operations. As of June 30, 2021, the Company had a cash balance of $50,164,673 and an accumulated deficit of $65,176,198 (inclusive of a non-cash gain of $820,000 relating to change in fair value of contingent consideration and $9,648,173 relating to loss on sale of assets in the Disposition). During the three and six months ended June 30, 2021, the Company incurred a net loss of $10,085,317 and $27,787,651, respectively, and during the six months ended June 30, 2021, the Company used cash in operating activities of $10,234,764.

 

On April 26, 2021, Brooklyn entered into a common stock purchase agreement (the “First Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), which provided that Brooklyn could offer to Lincoln Park up to an aggregate of $20,000,000 of common stock over a 36-month period commencing after May 10, 2021, the date that a registration statement covering the resale of shares of common stock issued under the First Purchase Agreement was declared effective by the SEC. As of June 30, 2021, Brooklyn had issued and sold an aggregate of 1,127,736 shares of common stock to Lincoln Park pursuant to the First Purchase Agreement, resulting in gross proceeds of $20,000,000.

 

 

 

Merger

 

 

 

At the closing of the Merger, all the outstanding membership interests of Brooklyn LLC converted into the right to receive an aggregate of 39,991,625 shares of common stock, of which 1,067,668 shares were issued as compensation to Maxim Group LLC, Brooklyn LLC’s financial advisor (the “Financial Advisor”) for its services to Brooklyn LLC in connection with the Merger.

 

Number of shares of common stock owned by Brooklyn stockholders immediately before the Merger			1,514,373
Multiplied by the fair value per share of common stock (i)		$	5.40
Total purchase price		$	8,177,614

The preliminary allocation of the estimated purchase price to the tangible and intangible assets acquired and liabilities deemed to be assumed from Brooklyn, based on their estimated fair values as of March 25, 2021, is as follows:

 

        Brooklyn LLC was obligated under the Merger Agreement to have $10,000,000 in cash and cash equivalents on its balance sheet at the effective time of the Merger. To ensure Brooklyn LLC had the required funds, certain beneficial holders of Brooklyn LLC’s Class A membership interests entered into contractual commitments to invest $10,000,000 into Brooklyn LLC immediately prior to the closing of the Merger. During March 2021, Brooklyn offered to its Class A unit holders an additional 5% rights offering for an additional $500,000 to be raised by a rights offering. Funding to the rights offering was received between February 17 and April 5, 2021.

Disposition

        On March 26, 2021, Brooklyn sold its rights, title and interest in and to the assets relating to the business it operated prior to the Merger to eGames.com in exchange for a purchase price of $2,000,000 and assumption of specified liabilities relating to that business. The sale was completed in accordance with the terms of the Asset Purchase Agreement.  Details of the Disposition are as follows:

Unaudited Pro Forma Disclosure

 

 

 

 

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

 

 

 

 

The following tables summarize the liabilities that are measured at fair value as of June 30, 2021 and December 31, 2020:

 

 

 

 

For purposes of this calculation, a royalty equal to 13% of revenue (consisting of the royalty due to University of South Florida and the royalty due to the collaborator) is assumed until 2029 and a royalty of 7% of revenues is assumed from 2030 to 2038. The post patent decline is 50% in the first year and 10% thereafter. Income taxes were projected to be 26% of net royalty savings. The cash flows were discounted by the liability specific weighted average cost of capital of 26% using the mid-point convention.

 

 

The Company recorded goodwill and in-process research and development (“IPR&D”) in the amount of $2,043,747 and $6,860,000, respectively, in connection with the acquisition of IRX. IPR&D assets are considered to be indefinite lived until the completion or abandonment of the associated research and development projects.

 

7)	ACCRUED EXPENSES

 

Accrued expenses consisted of the following:

 

 

 

Legal Matters

 

Royalty Agreements

 

 

Effective June 22, 2018, IRX terminated its Research, Development and Option Facilitation Agreement and its Options Agreement (the “RDO and Options Agreements”) with a collaborative partner (the “Collaborator”), pursuant to a termination agreement (the “Termination Agreement”). The Termination Agreement was assigned to Brooklyn, LLC in November 2018 when Brooklyn LLC acquired the assets of IRX. In connection with the Termination Agreement, all of the rights granted to the Collaborator under the RDO and Options Agreements were terminated, and Brooklyn LLC has no obligation to refund any payments received from the Collaborator. As consideration for entering into the Termination Agreement, the Collaborator will receive a royalty equal to 6% of revenues from the sale of IRX-2, for the period of time beginning with the first sale of IRX-2 through the later of (i) the twelfth anniversary of the first sale of IRX-2 or (ii) the expiration of the last IRX patent, or other exclusivity of IRX-2.

 

 

 

 

On May 1, 2012, IRX Therapeutics entered into a royalty agreement (the “IRX Investor Royalty Agreement”) with certain investors who participated in a financing transaction. The IRX Investor Royalty Agreement was assigned to Brooklyn LLC in November 2018 when Brooklyn LLC acquired the assets of IRX. Pursuant to the IRX Investor Royalty Agreement, when Brooklyn LLC becomes obligated to pay royalties to USF under the agreement described above under “Licensing Agreements-USF,” it will pay an additional royalty of 1% of gross sales to an entity organized by the investors who participated in such financing transaction. There are no termination provisions in the IRX Investor Royalty Agreement. Brooklyn LLC has not recognized any revenues to date, and no royalties are due pursuant to any of the above-mentioned royalty agreements.

 

 

On March 25, 2021, immediately prior to the Merger, Brooklyn filed an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split. As a result of the reverse stock split, the number of issued and outstanding shares of common stock immediately prior to the reverse stock split was reduced into a smaller number of shares, such that every two shares of common stock held by a stockholder of Brooklyn immediately prior to the reverse stock split were combined and reclassified into one share of common stock after the reverse stock split.

 

Immediately following the reverse stock split there were approximately 1,514,373 shares of common stock outstanding prior to the Merger. No fractional shares were issued in connection with the reverse stock split.

 

Under the terms of the Merger Agreement (see Notes 1 and 3), on March 25, 2021, Brooklyn issued shares of common stock to the equity holders of Brooklyn LLC. The 86,667 Class A units of Brooklyn LLC were converted into 22,274,718 shares of common stock; the 15,000,000 Class B units were converted into 2,514,714 shares of common stock; the 10,000,000 Class C units were converted into 1,676,308 shares of common stock; 629,643 shares of common units were converted into 629,643 shares of common stock, and 10,500,000 rights options were converted into 11,828,575 shares of common stock.  Brooklyn also issued 1,067,879 shares of common stock to the Financial Advisor pursuant to the Merger Agreement.

 

On July 16, 2021, Brooklyn and its newly formed, wholly owned subsidiary Brooklyn Acquisition Sub, Inc. entered into an agreement and plan of acquisition (the “Acquisition Agreement”) with (a) Novellus LLC, (b) Novellus, Inc., the sole equity holder of Novellus, Ltd. and, prior to the closing under the Acquisition Agreement, a wholly owned subsidiary of Novellus, LLC, and (c) a seller representative. Novellus, Ltd. is a pre-clinical stage biotechnology company organized under the laws of Ireland that is developing engineered cellular medicines using its licensed, patented non-immunogenic mRNA, high-specificity gene editing, mutation-free and footprint-free cell reprogramming and serum-insensitive mRNA lipid delivery technologies.

 

The closing of the transaction contemplated by the Acquisition Agreement (the “Acquisition”) was held contemporaneously with the execution and delivery of the Acquisition Agreement. At the closing:

 

 

 

Brooklyn delivered consideration for the Acquisition totaling $124,022,181, which consisted of (a) $22,822,181 in cash and (b) 7,022,230 shares of common stock, which under the terms of the Acquisition Agreement were valued at a total of $102,000,000, based on a price of $14.5253 per share.

 

The Acquisition Agreement contains customary representations, warranties and certain indemnification provisions. A total of 740,766 of the shares issued as consideration have been placed in escrow for a period of up to 12 months in order to secure indemnification obligations to Brooklyn under the Acquisition Agreement. The Acquisition Agreement also contains non-competition and non-solicitation provisions pursuant to which Novellus LLC has agreed not to engage in certain competitive activities for a period of five years following the closing, including customary restrictions relating to employees. No employees of Novellus Ltd. or Novellus, Inc. prior to the Acquisition continued their employment, or were otherwise engaged by Brooklyn, following the Acquisition.

 

In connection with the Acquisition, the co-founders of Novellus, Ltd. entered into lock-up agreements with respect to 3,377,690 of the shares received in the Acquisition, and Brooklyn’s Chair of the Board of Directors and its Chief Executive Officer and President entered into identical lock-up agreements with respect to their current holdings of Brooklyn stock. Each lock-up agreement extends for a period of three years, provided that up to 75% of the shares of common stock subject to the lock-up agreement may be released from the lock-up restrictions earlier if the price of common stock on the NYSE American stock exchange exceeds specified thresholds. The lock-up agreements include customary exceptions for transfers during the applicable lock-up period.

 

The Company expects the Acquisition will advance its evolution into a platform company with a pipeline of next-generation engineered cellular, gene editing and cytokine programs. In addition, the acquisition of Novellus, Ltd. builds on the License Agreement. (See Note 9.) The completion of the acquisition of Novellus, Ltd. relieves Brooklyn LLC from potential obligations to pay Novellus, Ltd. certain upfront fees, clinical development milestone fees and post-registration royalties under the License Agreement. The agreement with Factor under the License Agreement, which grants Brooklyn LLC exclusive rights to develop certain next-generation mRNA gene editing and cell therapy products, remains unchanged.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

•

prior to the Merger, a reverse stock split of its common stock, par value $0.005 per share, at a ratio of one-for-two, which we refer to as the Reverse Split; and

•

following the Merger, a change in its corporate name from “NTN Buzztime, Inc.” to “Brooklyn ImmunoTherapeutics, Inc.”

•

Advance our product candidate IRX-2 through clinical development. IRX-2 is a human blood-based IL 2 therapy being studied for multiple types of cancer, including squamous cell cancer of the head and neck. Treatment of patients in the INSPIRE trial has been completed, and patients who participated in the trial are currently being monitored for event-free survival with top-line data estimated to be available in the first half of 2022.

•

Advance combination trials with checkpoint inhibitors. Once INSPIRE trial data are released, we plan to use those results as a catalyst in addition to data from the other clinical trials in the program with multiple data read-outs anticipated in 2022 and later.

•

Pursue partnerships to advance the IRX-2 clinical program. We are pursuing partnering opportunities with leading biopharmaceutical companies for the development and commercialization of IRX-2.

•

Regulatory strategy. We believe that our assets may be deemed to be unique and to represent potential breakthroughs in the treatment of cancer and other indications. We will endeavor to seek breakthrough therapy designation with regulatory agencies for IRX-2 for one or more indications. We cannot, however, assure that we will receive breakthrough therapy designation for any future indications or that any breakthrough therapy designation we do receive will necessarily lead to a faster approval time.

•

Intellectual Property. We continue to pursue additional intellectual property based on data from IRX clinical studies.

•

BR-101 - A study involving 16 patients with neoadjuvant breast cancer performed at the Providence Portland Medical Center. Details of this trial can be found at clinicaltrials.gov (NCT02950259).

•

CIN-201 - An open label single arm Phase 2 trial of the IRX‑2 regimen in women with cervical squamous intraepithelial neoplasia 3 or squamous vulvar intraepithelial neoplasia 3. Details of this trial can be found at clinicaltrials.gov (NCT03267680).

•

BAS-104 - A basket study originally intended to enroll 100 patients with metastatic bladder, renal, non-small cell lung cancer, or NSCLC, melanoma, and head and neck cancer being held at the Moffitt Cancer Center, using IRX‑2 in conjunction with Opdivo (Nivolumab), an immunotherapy cancer treatment marketed by Bristol-Myers Squibb Company. This trial was discontinued after 11 subjects were enrolled due to insurance reimbursement challenges. Details of this trial can be found on clinicaltrials.gov (NCT03758781).

•

HCC-107 - A study involving 28 patients with metastatic hepatocellular carcinoma, or HCC, being held at City of Hope Medical Center, HonorHealth Research Institute, and Texas Oncology at Baylor Charles A. Simmons Cancer Center using IRX‑2 in conjunction with Opdivo, a cancer treatment marketed by Bristol-Myers Squibb Company. Details of this trial can be found at clinicaltrials.gov (NCT03655002).

•

GI-106 - A study involving 20 patients with metastatic gastric and gastroesophageal junction cancers (GI) being held at City of Hope Medical Center, HonorHealth Research Institute, and Texas Oncology at Baylor Charles A. Simmons Cancer Center using IRX‑2 in conjunction with Keytruda (Pembrolizumab), an immunotherapy cancer treatment marketed by Merck. Details of this trial can be found at clinicaltrials.gov (NCT03918499).

•

MHN-102 - A study involving 15 patients with metastatic head and neck cancer being held at the H. Lee Moffitt Cancer Center and Research Institute and University of Michigan Health System using IRX‑2 in conjunction with Imfinzi (Durvalumab), a cancer treatment marketed by AstraZeneca plc. Details of this trial can be found at clinicaltrials.gov (NCT03381183).

•

BR-202 - A study involving 30 patients with neoadjuvant triple negative breast cancer, held at the Providence Portland Medical Center using IRX‑2 in conjunction with a programmed cell death protein 1, or PD1, and chemotherapy treatments. Details of this trial can be found at clinicaltrials.gov (NCT04373031).

•

Brooklyn acquired all of the outstanding equity interests of Novellus, Inc. as the result of the merger of Brooklyn Acquisition Sub, Inc. with and into Novellus, Inc., following which Novellus, Inc., as the surviving corporation, became Brooklyn’s wholly owned subsidiary and Novellus Ltd. became Brooklyn’s indirectly owned subsidiary.

•

Brooklyn acquired 25.0% of the total outstanding equity interests of NoveCite, Inc., a corporation focused on bringing an allogeneic mesenchymal stem cell, or MSC, product to patients with acute respiratory distress syndrome, including from COVID-19.

		Three months ended June 30,
		2021				2020				Change				% Change
Operating expenses:
Research and development			5,392,777				985,081				4,407,696				447	%
General and administrative			4,620,353				1,034,120				3,586,233				347	%
Total operating expenses			10,013,130				2,019,201				7,993,929				396	%
Loss from operations			(10,013,130	)			(2,019,201	)			(7,993,929	)			396	%
Other expenses:
Loss on sale of NTN assets			(50,000	)			-				(50,000	)			N/A
Other expense, net			(22,187	)			(14,245	)			(7,942	)			56	%
Total other expenses			(72,187	)			(14,245	)			(57,942	)			407	%
Net loss			(10,085,317	)			(2,033,446	)			(8,051,871	)			396	%
Series A preferred stock dividend			(7,806	)			-				(7,806	)			N/A
Net loss attributable to common stockholders		$	(10,093,123	)		$	(2,033,446	)		$	(8,059,677	)			396	%

		Six months ended June 30,
		2021				2020				Change				% Change
Operating expenses:
Research and development			6,912,410				1,376,140				5,536,270				402	%
General and administrative			6,256,910				1,657,595				4,599,315				277	%
Transaction costs			5,765,407				-				5,765,407				N/A
Change in fair value of contingent consideration			(820,000	)			-				(820,000	)			N/A
Total operating expenses			18,114,727				3,033,735				15,080,992				497	%
Loss from operations			(18,114,727	)			(3,033,735	)			(15,080,992	)			497	%
Other expenses:
Loss on sale of NTN assets			(9,648,173	)			-				(9,648,173	)			N/A
Other expense, net			(24,751	)			(18,923	)			(5,828	)			31	%
Total other expenses			(9,672,924	)			(18,923	)			(9,654,001	)			51017	%
Net loss			(27,787,651	)			(3,052,658	)			(24,734,993	)			810	%
Series A preferred stock dividend			(7,806	)			-				(7,806	)			N/A
Net loss attributable to common stockholders		$	(27,795,457	)		$	(3,052,658	)		$	(24,742,799	)			811	%

•

the scope, rate of progress and cost of our clinical trials and other product development activities;

•

future clinical trial results;

•

the terms and timing of any collaborative, licensing and other agreements that we may establish;

•

the cost and timing of regulatory approvals;

•

the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products;

•

the cost and timing of establishing sales, marketing and distribution capabilities;

•

the effect of competition and market developments; and

•

the cost of filing and potentially prosecuting, defending and enforcing any patent claims and other intellectual property rights.

•

During the second quarter, we entered into the First Purchase Agreement and the Second Purchase Agreement with Lincoln Park, pursuant to which, subject to specified terms and conditions, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to an aggregate of $60.0 million in shares of our common stock. As of August 12, 2021, we had issued and sold 3,211,942 shares of common stock for total gross proceeds of $50.5 million and net proceeds of $48.5 million. For further information, see “—Recent Developments—Purchase Agreements.”

•

As a condition to the closing of the Merger, Brooklyn LLC was required to have at least $10.0 million in cash and cash equivalents at the effective time of the Merger. In furtherance of, and prior to, the Merger, certain of its members entered into agreements pursuant to which those members purchased additional units of Brooklyn LLC for an aggregate purchase price of $10.5 million.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Item 4.

Controls and Procedures.

●	hiring and employing additional accounting personnel in a number, and with experience, to allow for proper segregation of duties; and

●	developing and implementing, and then monitoring the effectiveness of, written policies and procedures required to achieve our financial reporting objectives in a timely manner, including policies and procedures relating to internal control over financial reporting.

Item 1.

Legal Proceedings.

Item 1A.

Risk Factors.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Item 6.

Exhibits.

Exhibit	Description		Incorporated By Reference
10.1(a)†*	Agreement and Plan of Acquisition, dated as of July 16, 2021, by and among Brooklyn ImmunoTherapeutics, Inc., Brooklyn Acquisition Sub, Inc., Novellus LLC, Novellus, Inc., and the Sellers’ Representative.		Exhibit to Form 8-K filed on July 19, 2021
10.1 (b)†	Registration Rights Agreement, dated as of July 16, 2021, by and among Brooklyn ImmunoTherapeutics, Inc. and the individuals and entities named therein.		Exhibit to Form 8-K filed on July 19, 2021
10.2+§	Executive Employment Agreement, dated as of April 1, 2021 and effective as of April 16, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Howard J. Federoff.		Exhibit to Form 8-K filed on April 7, 2021
10.3(a)+	Form of Indemnification Agreement		Exhibit to Form 8-K filed on April 16, 2021
10.3(b)	Schedule identifying agreements substantially identical to the form of indemnification agreement filed as Exhibit 10.2(a)		Exhibit to Form 8-K filed on June 21, 2021
10.4(a)	Purchase Agreement, dates as of May 26, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Lincoln Park Capital Fund, LLC		Exhibit to Form 8-K filed on May 26, 2021
10.4(b)	Registration Rights Agreement, dated as of May 26, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Lincoln Park Capital Fund, LLC		Exhibit to Form 8-K filed on May 26, 2021
10.5§*	Exclusive License Agreement, dated as of April 26, 2021, between Factor Bioscience Limited, Novellus Therapeutics Limited and Brooklyn ImmunoTherapeutics LLC		Exhibit to Form 8-K filed on April 30, 2021
10.6+	Brooklyn ImmunoTherapeutics, Inc. 2021 Inducement Stock Incentive Plan		Exhibit to Form 8-K filed on May 26, 2021
10.7+	Executive Employment Agreement, dated as of June 5, 2021 and effective as of June 28, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Kevin D’Amour.		Exhibit to Form 8-K filed on June 10, 2021
10.8+	Executive Employment Agreement, dated as of June 16, 2021 and effective as of June 21, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Sandra Gurrola.		Exhibit to Form 8-K filed on June 21, 2021
10.9+	Executive Employment Agreement, dated as of July 6, 2021 and effective as of July 15, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Jay Sial.		Exhibit to Form 8-K filed on July 19, 2021
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed herewith
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Furnished herewith
32.2	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Furnished herewith
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).		Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document		Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document		Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document		Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document		Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document		Filed herewith
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

*	Certain information redacted and replaced with “[***]”.

+	Indicates management contract or compensatory plan.

§

Certain addenda have been omitted pursuant to Item 601(a)(5) of Regulation S-K. We hereby undertake to furnish copies of the omitted addenda upon request by the Securities and Exchange Commission, provided that we may request confidential treatment pursuant to Rule 24b‑2 of the Securities Exchange Act of 1934 for the addenda so furnished.

†	Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Brooklyn ImmunoTherapeutics, Inc. hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission

	BROOKLYN IMMUNOTHERAPEUTICS, INC.
Date: August 13, 2021	By:	/s/ Howard J. Federoff
		Howard J. Federoff
		Chief Executive Officer and President

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