INOVIO PHARMACEUTICALS, INC. (Form: 10-Q, Received: 11/09/2016 06:03:55)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016



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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NO. 001-14888

INOVIO PHARMACEUTICALS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



DELAWARE		33-0969592
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

660 W. GERMANTOWN PIKE, SUITE 110 PLYMOUTH MEETING, PA		19462
(Address of principal executive offices)		(Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (267) 440-4200

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:



COMMON STOCK, $0.001 PAR VALUE		NASDAQ
(Title of Class)		(Name of Each Exchange on Which Registered)

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	¨		Accelerated filer	x

Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The number of shares outstanding of the Registrant’s Common Stock, $0.001 par value, was 74,060,530 as of November 1, 2016 .

INOVIO PHARMACEUTICALS, INC.

FORM 10-Q

For the Quarterly Period Ended September 30, 2016

INDEX



Part I. Financial Information	1
Item 1. Financial Statements	1
a) Condensed Consolidated Balance Sheets as of September 30, 2016 (Unaudited) and December 31, 2015	1
b) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited)	2
c) Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited)	3
d) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (Unaudited)	4
e) Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	25
Item 4. Controls and Procedures	26

Part II. Other Information	27
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3. Default Upon Senior Securities	40
Item 4. Mine Safety Disclosures	41
Item 5. Other Information	41
Item 6. Exhibits	42
Signatures	44

Part I. Financial Information

Item 1. Financial Statements

INOVIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



	September 30, 2016			December 31, 2015
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	23,250,762		$	57,632,693
Short-term investments	96,435,585			105,357,277
Accounts receivable	17,455,108			7,333,059
Prepaid expenses and other current assets	1,391,252			917,257
Prepaid expenses and other current assets from affiliated entity	1,697,213			610,652
Total current assets	140,229,920			171,850,938
Fixed assets, net	8,990,714			7,306,695
Investment in affiliated entity- GeneOne	20,758,587			14,941,277
Investment in affiliated entity - PLS	4,537,761			5,045,915
Intangible assets, net	8,036,874			3,905,860
Goodwill	10,513,371			10,113,371
Other assets	1,482,066			676,803
Total assets	$	194,549,293		$	213,840,859
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	16,183,976		$	13,064,899
Accounts payable and accrued expenses due to affiliated entity	493,420			165,047
Accrued clinical trial expenses	7,216,266			2,600,483
Common stock warrants	1,812,502			1,301,138
Deferred revenue	14,829,634			13,449,768
Deferred revenue from affiliated entity	438,542			504,442
Deferred rent	400,200			380,629
Total current liabilities	41,374,540			31,466,406
Deferred revenue, net of current portion	365,687			103,074
Deferred revenue from affiliated entity, net of current portion	180,444			677,371
Deferred rent, net of current portion	5,474,834			5,485,313
Deferred tax liabilities	175,642			175,642
Total liabilities	47,571,147			37,907,806
Inovio Pharmaceuticals, Inc. stockholders’ equity:
Common stock	73,967			72,218
Additional paid-in capital	552,753,321			534,004,564
Accumulated deficit	(408,604,765		)	(361,097,896		)
Accumulated other comprehensive income	2,659,354			2,708,339
Total Inovio Pharmaceuticals, Inc. stockholders’ equity	146,881,877			175,687,225
Non-controlling interest	96,269			245,828
Total stockholders’ equity	146,978,146			175,933,053
Total liabilities and stockholders’ equity	$	194,549,293		$	213,840,859

See accompanying notes to unaudited condensed consolidated financial statements.

INOVIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues:
Revenue under collaborative research and development arrangements	$	2,327,316		$	16,475,083		$	6,014,161		$	25,055,890
Revenue under collaborative research and development arrangements with affiliated entity	574,596			125,000			1,211,316			404,167
Grants and miscellaneous revenue	9,410,648			7,583,151			19,401,029			9,176,492
Grants and miscellaneous revenue from affiliated entity	227,903			—			227,903			—
Total revenues	12,540,463			24,183,234			26,854,409			34,636,549
Operating expenses:
Research and development	26,980,343			16,075,201			64,800,304			42,190,032
General and administrative	5,755,603			4,377,616			16,926,746			13,203,804
Gain on sale of assets	—			—			(1,000,000		)	(1,000,000		)
Total operating expenses	32,735,946			20,452,817			80,727,050			54,393,836
Income (Loss) from operations	(20,195,483		)	3,730,417			(53,872,641		)	(19,757,287		)
Other income (expense):
Interest and other income, net	391,596			214,982			1,065,797			499,590
Change in fair value of common stock warrants, net	2,690			518,877			(517,334		)	467,877
Gain (loss) on investment in affiliated entity	(958,141		)	(659,054		)	5,817,309			5,849,782
Net income (loss) before income tax benefit	(20,759,338		)	3,805,222			(47,506,869		)	(12,940,038		)
Income tax benefit	—			1,789,246			—			1,789,246
Net income (loss)	(20,759,338		)	5,594,468			(47,506,869		)	(11,150,792		)
Net (income) loss attributable to non-controlling interest	—			—			—			(84,769		)
Net income (loss) attributable to Inovio Pharmaceuticals, Inc.	$	(20,759,338	)	$	5,594,468		$	(47,506,869	)	$	(11,235,561	)
Net income (loss) per common share attributable to Inovio Pharmaceuticals, Inc. stockholders:
Basic	$	(0.28	)	$	0.08		$	(0.65	)	$	(0.17	)
Diluted	$	(0.28	)	$	0.07		$	(0.65	)	$	(0.18	)
Weighted average number of common shares outstanding used in per share calculations:
Basic	73,602,834			72,029,644			72,932,199			66,846,481
Diluted	73,789,008			73,961,237			72,932,199			67,018,961

See accompanying notes to unaudited condensed consolidated financial statements.

INOVIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(20,759,338	)	$	5,594,468		$	(47,506,869	)	$	(11,150,792	)
Other comprehensive income (loss):
Unrealized gain (loss) on investment in affiliated entity, net of tax	(771,727		)	3,998,521			(508,153		)	3,998,521
Unrealized gain (loss) on short-term investments, net of tax	(83,281		)	(20,149		)	459,167			(92,951		)
Comprehensive income (loss)	(21,614,346		)	9,572,840			(47,555,855		)	(7,245,222		)
Comprehensive (income) loss attributable to non-controlling interest	—			—			—			(84,769		)
Comprehensive income (loss) attributable to Inovio Pharmaceuticals, Inc.	$	(21,614,346	)	$	9,572,840		$	(47,555,855	)	$	(7,329,991	)

See accompanying notes to unaudited condensed consolidated financial statements.

INOVIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(47,506,869	)	$	(11,150,792	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,292,696			733,722
Amortization of intangible assets	968,986			658,049
Change in value of common stock warrants	517,334			(467,877		)
Stock-based compensation	7,384,318			4,900,898
Amortization of premiums on investments	200,000			242,384
Gain on short-term investments	(44,928		)	—
Deferred rent	(125,408		)	317,922
Gain on investment in affiliated entity	(5,817,309		)	(5,849,782		)
Gain on sale of intangible assets	(1,000,000		)	(1,000,000		)
Income tax benefit from other unrealized gains on securities	—			(1,789,246		)
Changes in operating assets and liabilities:
Accounts receivable	(10,122,049		)	(8,161,066		)
Prepaid expenses and other current assets	(473,995		)	(550,917		)
Prepaid expenses and other current assets from affiliated entity	(1,086,561		)	748,049
Other assets	(811,233		)	(123,002		)
Accounts payable and accrued expenses	2,949,097			2,390,927
Accrued clinical trial expenses	4,615,783			935,012
Accounts payable and accrued expenses due to affiliated entity	328,373			2,784,612
Deferred revenue	1,642,479			9,625,906
Deferred revenue from affiliated entity	(562,827		)	90,239
Net cash used in operating activities	(47,652,113		)	(5,664,962		)
Cash flows from investing activities:
Purchases of investments	(42,495,236		)	(37,391,913		)
Maturities of investments	51,721,024			4,745,000
Purchases of capital assets	(2,672,235		)	(1,955,621		)
Proceeds from sale of intangible assets	1,000,000			1,000,000
Purchase of intangible assets and other assets	(1,200,000		)	—
Net cash provided by (used in) investing activities	6,353,553			(33,602,534		)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs	5,458,284			81,902,363
Proceeds from stock option and warrant exercises, net of tax payments	1,607,904			2,439,506
Other financing activities	(149,559		)	(149,559		)
Net cash provided by financing activities	6,916,629			84,192,310
(Decrease) Increase in cash and cash equivalents	(34,381,931		)	44,924,814
Cash and cash equivalents, beginning of period	57,632,693			40,543,982
Cash and cash equivalents, end of period	$	23,250,762		$	85,468,796

Supplemental disclosure of non-cash activities
Common stock issued for purchase of Bioject	$	4,300,000		$	—
Change in amounts accrued for purchases of property and equipment	$	169,980		$	475,123
Lease incentive recorded as fixed assets and deferred rent	$	134,500		$	186,573

See accompanying notes to unaudited condensed consolidated financial statements.

INOVIO PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Operations

Inovio Pharmaceuticals, Inc. (the “Company” or “Inovio”), a clinical stage biopharmaceutical company, develops active DNA immunotherapies and vaccines in combination with proprietary electroporation delivery devices to prevent and treat cancers and infectious diseases. Inovio’s synthetic products are based on the Company’s SynCon ^® design. The Company has completed, current or planned clinical programs of its proprietary SynCon ^® products for HPV-caused pre-cancers and cancers, influenza, prostate cancer, breast/lung/pancreatic cancer, hepatitis C virus (HCV), hepatitis B virus (HBV), HIV, Ebola, Middle East Respiratory Syndrome (MERS) and Zika virus. The Company's partners and collaborators include MedImmune, LLC, The Wistar Institute, University of Pennsylvania, GeneOne Life Science Inc. ("GeneOne"), Drexel University, National Microbiology Laboratory of the Public Health Agency of Canada, National Institute of Allergy and Infectious Diseases (“NIAID”), United States Military HIV Research Program (“USMHRP”), U.S. Army Medical Research Institute of Infectious Diseases (“USAMRIID”), HIV Vaccines Trial Network (“HVTN”), and Defense Advanced Research Projects Agency (“DARPA”). Inovio is incorporated in Delaware.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Inovio have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet as of September 30, 2016 , condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015 , condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2016 and 2015 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2016 and 2015 , are unaudited, but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2016 shown herein are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 , or for any other period. These financial statements, and notes thereto, should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015 , included in the Company's Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 11, 2016. The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The Company has evaluated subsequent events after the balance sheet date of September 30, 2016 through the date it filed these unaudited condensed consolidated financial statements with the SEC.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. Critical Accounting Policies

Revenue Recognition.

The Company recognizes revenues when all four of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery of the products and/or services has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured.

Grant revenue

The Company receives non-refundable grants under available government programs. Government grants towards current expenditures are recorded as revenue when there is reasonable assurance that the Company has complied with all conditions necessary to receive the grants, collectability is reasonably assured, and as the expenditures are incurred.

License fee and milestone revenue

The Company has adopted a strategy of co-developing or licensing its gene delivery technology for specific genes or specific medical indications. Accordingly, the Company has entered into collaborative research and development agreements and has received funding for pre-clinical research and clinical trials. Agreements that contain multiple elements are analyzed to

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determine whether the deliverables within the agreement can be separated or whether they must be accounted for as a single unit of accounting in accordance with the Financial Accounting Standards Board's (“FASB”) Accounting Standards Update (“ASU”) No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation. The delivered item(s) were considered a separate unit of accounting if all of the following criteria were met: (1) the delivered item(s) has value to the customer on a standalone basis; (2) there is objective and reliable evidence of the fair value of the undelivered item(s); and (3) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in our control. If these criteria were not met, the deliverable was combined with other deliverables in the arrangement and accounted for as a combined unit of accounting.

Arrangement consideration is allocated at the inception of the agreement to all identified units of accounting based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (“VSOE”), of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, we use our best estimate of the selling price for the deliverable. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Changes in the allocation of the sales price between delivered and undelivered elements can impact revenue recognition but do not change the total revenue recognized under any agreement.

Upfront license fee payments are recognized upon delivery of the license if facts and circumstances dictate that the license has standalone value from the undelivered items, the relative selling price allocation of the license is equal to or exceeds the upfront license fee, persuasive evidence of an arrangement exists, our price to the collaborator is fixed or determinable, and collectability is reasonably assured. Upfront license fee payments are deferred if facts and circumstances dictate that the license does not have standalone value. The determination of the length of the period over which to defer revenue is subject to judgment and estimation and can have an impact on the amount of revenue recognized in a given period.

The Company applies ASU No. 2010-17, Revenue Recognition (Topic 605): Milestone Method of Revenue Recognition (“Milestone Method”). Under the Milestone Method, the Company will recognize consideration that is contingent upon the achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone is substantive in its entirety. A milestone is considered substantive when it meets all of the following criteria:


1.	The consideration is commensurate with either the entity's performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity's performance to achieve the milestone,


2.	The consideration relates solely to past performance, and


3.	The consideration is reasonable relative to all of the deliverables and payment terms within the arrangement.

A milestone is defined as an event (i) that can only be achieved based in whole or in part on either the entity's performance or on the occurrence of a specific outcome resulting from the entity's performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved and (iii) that would result in additional payments being due to the Company.

Business Combinations. The cost of an acquired business is assigned to the tangible and identifiable intangible assets acquired and liabilities assumed on the basis of the estimated fair values at the date of acquisition. We assess fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, using a variety of methods including, but not limited to, an income approach and a market approach such as the estimation of future cash flows of acquired business and current selling prices of similar assets. Fair value of the assets acquired and liabilities assumed, including intangible assets, are measured based on the assumptions and estimations with regards to the variable factors such as the amount and timing of future cash flows for the asset or liability being measured, appropriate risk-adjusted discount rates, nonperformance risk, or other factors that market participants would consider. Upon acquisition, we determine the estimated economic lives of the acquired intangible assets for amortization purposes, which are based on the underlying expected cash flows of such assets. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that is not individually identified and separately recognized. Actual results may vary from projected results and assumptions used in the fair value assessments.

Research and Development Expenses. Since the Company's inception, most of its activities have consisted of research and development efforts related to developing electroporation technologies and DNA vaccines. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits, facilities and other overhead expenses, clinical trials, contract services and other outside expenses. Research and development expenses are charged to operations as they are incurred. These expenses result from the Company's independent research and

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development efforts as well as efforts associated with collaborations and licensing arrangements. The Company reviews and accrues clinical trials expense based on work performed, which relies on estimates of total costs incurred based on patient enrollment, completion of studies and other events. The Company follows this method since reasonably dependable estimates of the costs applicable to various stages of a research agreement or clinical trial can be made. Accrued clinical costs are subject to revisions as trials progress. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. Historically, revisions have not resulted in material changes to research and development expense; however a modification in the protocol of a clinical trial or cancellation of a trial could result in a charge to the Company's results of operations.

4. Principles of Consolidation

These unaudited condensed consolidated financial statements include the accounts of Inovio Pharmaceuticals, Inc. and its subsidiaries. In conjunction with the acquisition in June 2009 of VGX Pharmaceuticals (the “Merger”), the Company acquired a majority interest in VGX Animal Health and certain shares in GeneOne (a publicly-traded company in South Korea). The Company consolidates Genetronics, Inc. (a wholly-owned subsidiary of Inovio Pharmaceuticals, Inc.), VGX Pharmaceuticals and its subsidiary VGX Animal Health and records a non-controlling interest for the 15% of VGX Animal Health it does not own as of September 30, 2016 and December 31, 2015 . The Company's investment in GeneOne, which is recorded as investment in affiliated entity within the condensed consolidated balance sheets is accounted for at fair value on a recurring basis, with changes in fair value recorded on the condensed consolidated statements of operations within gain (loss) on investment in affiliated entity. All intercompany accounts and transactions have been eliminated upon consolidation.

Variable Interest Entities

The FASB issued authoritative guidance that requires companies to perform a qualitative analysis to determine whether a variable interest in another entity represents a controlling financial interest in a variable interest entity. A controlling financial interest in a variable interest entity is characterized by having both the power to direct the most significant activities of the entity and the obligation to absorb losses or the right to receive benefits of the entity. This guidance requires on-going reassessments of variable interests based on changes in facts and circumstances. The Company determined that none of the entities with which the Company currently conducts business and collaborations are variable interest entities except VGXI (a wholly-owned subsidiary of GeneOne). The Company determined that they are not the primary beneficiary as they do not have voting control or other forms of control over the operations and decision making and therefore are not required to consolidate VGXI. The Company continues to assess its variable interests and has determined that no significant changes have occurred as of September 30, 2016 .

5. Impact of Recently Issued Accounting Standards

The recent pronouncements below may have a significant effect on the Company's financial statements. Recent pronouncements that are not anticipated to have an impact on or are unrelated to the Company's financial condition, results of operations, or related disclosures are not discussed.

Accounting Standards Update (“ASU”), No. 2016-09- In March 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-09, Compensation-Stock Compensation. The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this standard are effective for the Company's annual year and first fiscal quarter beginning on January 1, 2017 with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

ASU, No. 2016-02- In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU will be effective for the Company beginning January 1, 2019 with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

ASU, No. 2014-15- In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements Going Concern, which intends to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosure. ASU 2014-15 defines the term substantial doubt and requires an assessment for a period of one year after the date of the issuance of the financial statements. It requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express

statement and other disclosures when substantial doubt is not alleviated. The guidance becomes effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The adoption of this guidance will have no impact on the Company's financial statements.

ASU, No. 2014-09- In May 2014, the FASB amended the existing accounting standards for revenue recognition, which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new standard requires a company to recognize revenue upon transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. The amended guidance defines a five-step approach for recognizing revenue, which may require a company to use more judgment and make more estimates than under the current guidance. The amended guidance as currently issued will be effective for the Company starting in 2018. The new standard allows for two methods of adoption: (a) full retrospective adoption, meaning the standard is applied to all periods presented, or (b) modified retrospective adoption, meaning the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. The Company is in the process of determining the adoption method it will implement, as well as the effects the adoption will have on its financial statements and related disclosures.

6. Investments

Investments consist of mutual funds, United States corporate debt securities, municipal bonds and an equity investment in the Company's affiliated entity Plumbline Life Sciences, Inc. ("PLS") at September 30, 2016 and December 31, 2015 . The Company classifies all investments as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies. Available-for-sale securities are recorded at fair value, based on current market valuations. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income (loss) until realized. Realized gains and losses are included in non-operating other income (expense) on the condensed consolidated statement of operations and are derived using the specific identification method for determining the cost of the securities sold. During the three and nine months ended September 30, 2016 and 2015, a minimal amount of net realized gain (loss) on investments was recorded. The Company assessed each of its investments on an individual basis to determine if any decline in fair value was other-than-temporary. Interest and dividends on investments classified as available-for-sale are included in interest and other income, net, in the condensed consolidated statements of operations. As of September 30, 2016 , the Company had 37 available-for-sale securities in a gross unrealized loss position of which 8 with a total unrealized loss of $8,000 were in such position for longer than 12 months .

The following is a summary of available-for-sale securities as of September 30, 2016 and December 31, 2015 :



		As of September 30, 2016
	Contractual Maturity (in years)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Mutual funds	---	$	70,053,356	$	244,865	$	(62,554	)	$	70,235,667
US corporate debt securities	Less than 2	26,221,990		15,380		(37,452		)	26,199,918
Investment in affiliated entity (PLS)	---	—		4,537,761		—			4,537,761
Total investments		$	96,275,346	$	4,798,006	$	(100,006	)	$	100,973,346



		As of December 31, 2015
	Contractual Maturity (in years)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Mutual funds	---	$	78,571,294	$	435	$	(185,737	)	$	78,385,992
US corporate debt securities	Less than 2	26,923,855		—		(54,452		)	26,869,403
Municipal bonds	Less than 1	101,936		—		(54		)	101,882
Investment in affiliated entity (PLS)	---	—		5,045,915		—			5,045,915
Total investments		$	105,597,085	$	5,046,350	$	(240,243	)	$	110,403,192

7. Marketable Securities and Fair Value Measurements

The guidance regarding fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets that are accessible at the measurement date; Level 2, defined as inputs other than quoted prices in active markets that are either

directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company did not have any transfer of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value hierarchy during the nine months ended September 30, 2016 or 2015 .

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, and are determined using the following inputs as of September 30, 2016 :



	Fair Value Measurements at
	September 30, 2016
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Unobservable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds	$	13,778,470	$	13,778,470	$	—	$	—
Mutual funds	70,235,667		—		70,235,667		—
US corporate debt securities	26,199,918		—		26,199,918		—
Investments in affiliated entities	25,296,348		25,296,348		—		—
Total Assets	$	135,510,403	$	39,074,818	$	96,435,585	$	—
Liabilities:
Common stock warrants	$	1,812,502	$	—	$	—	1,812,502
Total Liabilities	$	1,812,502	$	—	$	—	$	1,812,502

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, and are determined using the following inputs as of December 31, 2015 :



	Fair Value Measurements at
	December 31, 2015
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Unobservable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds	$	54,474,609	$	54,474,609	$	—	$	—
Mutual funds	78,385,992		—		78,385,992		—
US corporate debt securities	26,869,403		—		26,869,403		—
Municipal bonds	101,882		—		101,882		—
Investment in affiliated entities	19,987,192		19,987,192		—		—
Common stock warrants	5,970		—		—		5,970
Total Assets	$	179,825,048	$	74,461,801	$	105,357,277	$	5,970
Liabilities:
Common stock warrants	$	1,301,138	$	—	$	—	$	1,301,138
Total Liabilities	$	1,301,138	$	—	$	—	$	1,301,138

Level 1 assets include money market funds held by the Company that are valued at quoted market prices, as well as the Company’s investments in GeneOne and PLS. The Company accounts for its investment in GeneOne at fair value on a recurring basis by which the fair value is based on the market value of 1,644,155 common shares on September 30, 2016 and December 31, 2015 , listed on the Korean Stock Exchange. The Company accounts for its investment in PLS as an available-for sale security by which the fair value is based on the market value of 395,758 common shares on September 30, 2016 , listed on

the Korea New Exchange (KONEX) Market. The Company elected the fair value option in conjunction with the investment in GeneOne at the inception of the investment therefore changes in the fair value of the investment are reflected as other income (expense) in the condensed consolidated statements of operations. The Company did not elect the fair value option for the investment in PLS at the inception of the investment, but rather recorded the investment under the equity method until its ownership interest dropped below 20% in June 2015 and accordingly began recording the investment under the cost method using the carryover basis from the equity method of zero . Once shares of PLS began trading on the KONEX, the Company classified the investment as available-for-sale and began recording the investment at fair value with changes in fair value reflected in other comprehensive income (loss).

Level 2 assets at September 30, 2016 include US corporate debt securities and mutual funds held by the Company that are initially valued at the transaction price and subsequently valued, at the end of each reporting period, typically utilizing market observable data. The Company obtains the fair value of its Level 2 assets from a professional pricing service, which may use quoted market prices for identical or comparable instruments, or inputs other than quoted prices that are observable either directly or indirectly. The professional pricing service gathers quoted market prices and observable inputs from a variety of industry data providers. The valuation techniques used to measure the fair value of the Company's Level 2 financial instruments were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. The Company validates the quoted market prices provided by the primary pricing service by comparing their assessment of the fair values of the Company's investment portfolio balance against the fair values of the Company's investment portfolio balance obtained from an independent source.

Level 3 assets held as of September 30, 2016 include the second warrant received by the Company to purchase shares of common stock of OncoSec Medical Incorporated (“OncoSec”), in connection with the second amendment to the Asset Purchase Agreement between the Company and OncoSec signed in March 2012. This warrant to purchase 150,000 shares of common stock of OncoSec has a contractual life of five years with an exercise price of $20.00 per share. The first warrant to purchase 50,000 shares of common stock of OncoSec at an exercise price of $24.00 per share, expired in September 2016.

The Company reassesses the fair value of the OncoSec warrants at each reporting date utilizing a Black-Scholes pricing model. Inputs used in the pricing model include estimates of OncoSec stock price volatility, expected warrant life and risk-free interest rate. The Company develops its estimates based on publicly available historical data and knowledge of OncoSec. The Company reassesses the fair value of the warrants at each reporting date. The assumptions used to estimate the fair values of the OncoSec common stock warrant at September 30, 2016 are presented below:



Risk-free interest rate	0.43%
Expected volatility	88%
Expected life in years	0.5
Dividend yield	—

As a result of these calculations, the Company recorded a decrease in fair value of the warrants of $0 and $6,000 for the three and nine months ended September 30, 2016 , respectively and $98,000 and $461,000 for the three and nine months ended September 30, 2015 , respectively. The change in fair value is reflected in the Company's condensed consolidated statements of operations as a component of change in fair value of common stock warrants.

The following table presents a summary of changes in fair value of the Company’s total Level 3 financial assets for the nine months ended September 30, 2016 :



Balance at January 1, 2016	$	5,970
Decrease in fair value included in change in fair value of common stock warrants	(5,970		)
Balance at September 30, 2016	$	—

Level 3 liabilities held as of September 30, 2016 consist of common stock warrant liabilities associated with warrants to purchase the Company's common stock issued in March 2013. If unexercised, the warrants will expire in September 2018 . During the three and nine months ended September 30, 2016 and 2015, no ne of these warrants were exercised.

As of September 30, 2016 the Company has a $1.8 million common stock warrant liability. The Company reassesses the fair value of the common stock warrants at each reporting date utilizing a Black-Scholes pricing model. Inputs used in the pricing model include estimates of stock price volatility, expected warrant life and risk-free interest rate. The Company develops its estimates based on historical data. The assumptions used to estimate the fair value of common stock warrants at September 30, 2016 are presented below:



Risk-free interest rate	0.73%
Expected volatility	60%
Expected life in years	2.0
Dividend yield	—

Changes in these assumptions as well as in the Company's stock price on the valuation date can have a significant impact on the fair value of the common stock warrant liability. As a result of these calculations, the Company recorded a (decrease) increase in fair value of $(3,000) and $511,000 for the three and nine months ended September 30, 2016 , respectively, and a decrease in fair value of $(616,000) and $(929,000) for the three and nine months ended September 30, 2015 , respectively. The change in fair value is reflected in the Company's condensed consolidated statements of operations as a component of change in fair value of common stock warrants.

The following table presents the changes in fair value of the Company’s total Level 3 financial liabilities for the nine months ended September 30, 2016 :



Balance at January 1, 2016	$	1,301,138
Increase in fair value included in change in fair value of common stock warrants	511,364
Balance at September 30, 2016	$	1,812,502

8. Business Combination

On April 29, 2016, the Company acquired all of Bioject Medical Technologies Inc.’s ("Bioject") assets including needle-free injection technology, products and intellectual property. The transaction, which was accounted for as a business combination, provides the Company with further opportunities in device development. The Company paid Bioject $4.3 million in the Company's stock and $1.2 million in cash upon closing.

The acquisition consideration was preliminarily allocated to the estimated fair vales of the assets acquired as follows:



Developed technology	$	3,800,000
Customer-related intangible	1,000,000
Trademarks	200,000
Covenants not-to-compete	100,000
Goodwill	400,000
Total purchase consideration	$	5,500,000

The fair value of the acquired intangible assets was based on the discounted cash flow method that estimated the present value of a revenue stream derived from the licensing of the Bioject technology. These projected cash flows were discounted to present value using a discount rate of 14% . The fair value of the developed technology is being amortized on a straight-line basis over the estimated useful life of 15 years . The fair value of the remaining intangible assets acquired is being amortized on a straight-line basis over the estimated useful life of between 2 - 5 years. The excess of the acquisition date consideration over the fair values assigned to the assets acquired was recorded as goodwill. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the technologies and know-how of Bioject with the Company's existing business. This includes synergies expected from combining Bioject's needle-free injection technology with the Company's existing electroporation delivery devices.

The purchase price allocation was prepared on a preliminary basis and is subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired. Any measurement period adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition.

9. Goodwill and Intangible Assets

The following sets forth the goodwill and intangible assets by major asset class:



		September 30, 2016							December 31, 2015
	Useful Life (Yrs)	Gross		Accumulated Amortization			Net Book Value		Gross			Accumulated Amortization			Net Book Value
Non-Amortizing:
Goodwill(a)		$	10,513,371	$	—		$	10,513,371	$	10,113,371		$	—		$	10,113,371
Amortizing:
Patents	8 – 17	5,802,528		(5,599,335		)	203,193		5,802,528			(5,516,122		)	286,406
Licenses	8 – 17	1,323,761		(1,154,674		)	169,087		1,323,761			(1,133,113		)	190,648
CELLECTRA ^® (b)	5 – 11	8,106,270		(6,718,257		)	1,388,013		8,106,270			(6,397,947		)	1,708,323
GHRH(b)	11	335,314		(232,344		)	102,970		335,314			(208,581		)	126,733
Bioject (c)	2 – 15	5,100,000		(351,389		)	4,748,611		—		—	—			—
Other(d)	18	4,050,000		(2,625,000		)	1,425,000		4,050,000			(2,456,250		)	1,593,750
Total intangible assets		24,717,873		(16,680,999		)	8,036,874		19,617,873			(15,712,013		)	3,905,860
Total goodwill and intangible assets		$	35,231,244	$	(16,680,999	)	$	18,550,245	$	29,731,244		$	(15,712,013	)	$	14,019,231


(a)	Goodwill was recorded from the Inovio AS acquisition in January 2005, the acquisition of VGX in June 2009 and the acquisition of Bioject in April 2016 for $3.9 million , $6.2 million and $400,000 , respectively.


(b)	CELLECTRA ^® and GHRH are developed technologies which were recorded from the acquisition of VGX.


(c)	Bioject intangible assets represent the fair value of developed technology and intellectual property which were recorded from the acquisition of Bioject.


(d)	Other intangible assets represent the fair value of acquired intellectual property from the Inovio AS acquisition.

Aggregate amortization expense on intangible assets for the three and nine months ended September 30, 2016 was $412,000 and $969,000 , respectively. Aggregate amortization expense on intangible assets for the three and nine months ended September 30, 2015 was $215,000 and $658,000 , respectively. Estimated aggregate amortization expense for each of the five succeeding fiscal years is $ 408,000 for the remainder of fiscal year 2016, $1.6 million for 2017, $ 1.2 million for 2018, $ 1.1 million for 2019, $ 547,000 for 2020 and $ 3.1 million for 2021 and the years thereafter.

10. Stockholders’ Equity

The following is a summary of the Company's authorized and issued common and preferred stock as of September 30, 2016 and December 31, 2015 :



			Outstanding as of
	Authorized	Issued	September 30, 2016	December 31, 2015
Common Stock, par $0.001	600,000,000	73,966,730	73,966,730	72,217,965
Series C Preferred Stock, par $0.001	1,091	1,091	23	23

Common Stock

In June 2016, the Company entered into an At-the-Market Equity Offering Sales Agreement (the “Sales Agreement”) with an outside placement agent (the “Placement Agent”) to sell shares of its common stock with aggregate gross proceeds of up to $50.0 million , from time to time, through an “at-the-market” equity offering program under which the Placement Agent will act as sales agent. Under the Sales Agreement, the Company will set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The Sales Agreement provides that the Placement Agent will be entitled to compensation for its services in an amount equal to 2.0% of the gross proceeds from the sales of shares sold through the Placement Agent under the Sales Agreement. The Company has no obligation to sell any shares under the Sales Agreement, and may at any time suspend solicitation and offers under the Sales Agreement.

During the nine months ended September 30, 2016 , the Company sold a total of 568,248 shares of common stock under the Sales Agreement. The sales were made at a weighted average price of $ 9.80 per share with net proceeds to the Company of $ 5.5 million.

On May 5, 2015, the Company closed an underwritten public offering of 10,925,000 shares of the Company's common stock, including 1,425,000 shares of common stock issued pursuant to the underwriter’s exercise of its overallotment option, at the public offering price of $8.00 per share. The net proceeds, after deducting the underwriter’s discounts and commission and other estimated offering expenses, were approximately $ 81.9 million.

Warrants

The Company accounts for registered common stock warrants issued in March 2013 under the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the registered warrants require the issuance of registered securities upon exercise and do not sufficiently preclude an implied right to net cash settlement. The Company classifies registered warrants on the condensed consolidated balance sheet as a current liability which is revalued at each balance sheet date subsequent to the initial issuance. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment, including estimating stock price volatility and expected warrant life. The Company develops its estimates based on historical data. A small change in the estimates used may have a relatively large change in the estimated valuation. The Company uses the Black-Scholes pricing model to value the registered warrants. Changes in the fair market value of the warrants are reflected in the condensed consolidated statement of operations as “Change in fair value of common stock warrants.”

The following table summarizes the warrants outstanding as of September 30, 2016 and December 31, 2015:



				As of September 30, 2016			As of December 31, 2015
Issued in Connection With:	Exercise Price		Expiration Date	Number of Warrants	Common Stock Warrant Liability		Number of Warrants	Common Stock Warrant Liability
March 2013 financing	$	3.17	September 12, 2018	284,091	$	1,812,502	284,091	$	1,301,138
Warrants assumed in June 2009 Merger	$4.08-$5.08		April 28, 2016	—	—		276,813	—
Total				284,091	$	1,812,502	560,904	$	1,301,138

Stock Options

The Company has two active stock-based incentive plans, the Amended and Restated 2007 Omnibus Incentive Plan (the “Incentive Plan”), pursuant to which the Company has granted stock options and restricted stock awards to executive officers, directors and employees, and the 2016 Omnibus Incentive Plan (the "2016 Incentive Plan").

The 2007 Incentive Plan was adopted on March 31, 2007, approved by the stockholders on May 4, 2007, approved by the stockholders as amended on May 2, 2008, and approved by the stockholders as amended and restated on August 25, 2009, May 14, 2010, May 22, 2014 and May 8, 2015. On May 14, 2010 the stockholders approved to increase the aggregate number of shares available for grant under the Incentive Plan by 500,000 and to provide that the aggregate number of shares available for grant under the Incentive Plan will be increased on January 1 of each year beginning in 2011 by a number of shares equal to the lesser of 513,833 or such lesser number of shares as may be determined by the Board. On May 22, 2014 and May 8, 2015, the stockholders approved to increase the aggregate number of shares available for grant under the Incentive Plan by 1,250,000 and 2,000,000 , respectively. At September 30, 2016 , there were 7,770,497 shares of common stock reserved for issuance upon exercise of incentive awards granted and to be granted at future dates under the Incentive Plan. At September 30, 2016 , the Company had 322,727 shares of common stock available for future grant under the Incentive Plan, 771,335 shares of unvested restricted stock units and options to purchase 5,910,921 shares of common stock outstanding under the Incentive Plan. The awards granted and available for future grant under the Incentive Plan generally vest over three years and have a maximum contractual term of ten years. The Incentive Plan terminates by its terms on March 31, 2017.

The Incentive Plan supersedes all of the Company’s previous stock option plans, which include the Amended 2000 Stock Option Plan and the VGX Equity Compensation Plan, under which the Company had options to purchase 100,002 and 737,038 shares of common stock outstanding at September 30, 2016 , respectively. The terms and conditions of the options outstanding under these plans remain unchanged.

The 2016 Incentive Plan was approved by stockholders on May 13, 2016. The maximum number of shares of the Company’s common stock available for issuance over the term of the 2016 Incentive Plan may not exceed 6,000,000 shares,

provided that commencing with the first business day of each calendar year beginning with January 1, 2018, such maximum number of shares shall be increased by 2,000,000 shares of common stock unless the Board determines, for any such calendar year, to increase such maximum amount by a fewer number of shares. As of September 30, 2016 , no awards have been granted under the 2016 Incentive Plan.

11. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing the net income (loss) for the year by the weighted average number of common shares outstanding during the year. Diluted income (loss) per share is calculated in accordance with the treasury stock method and reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock. The calculation of diluted income (loss) per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the warrants and the presumed exercise of such securities are dilutive to loss per share for the period, an adjustment to net loss used in the calculation is required to remove the change in fair value of the warrants from the numerator for the period. Likewise, an adjustment to the denominator is required to reflect the related dilutive shares, if any, under the treasury stock method.

The following tables reconcile the components of the numerator and denominator included in the calculations of diluted income (loss) per share:



	Three Months Ended September 30,
	2016			2015
Numerator
Net income (loss) attributable to Inovio Pharmaceuticals, Inc.	$	(20,759,338	)	$	5,594,468
Reflect adjustment for decrease in fair value of warrant liability	(2,841		)	(616,477		)
Numerator for use in diluted income (loss) per share	$	(20,762,179	)	$	4,977,991

Denominator
Weighted average number of common shares outstanding	73,602,834			72,029,644
Effect of dilutive potential common shares	186,174			1,931,593
Denominator for use in diluted income (loss) per share	73,789,008			73,961,237

Net income (loss) per share, diluted	$	(0.28	)	$	0.07



	Nine Months Ended September 30,
	2016			2015
Numerator
Net loss attributable to Inovio Pharmaceuticals, Inc.	$	(47,506,869	)	$	(11,235,561	)
Reflect adjustment for decrease in fair value of warrant liability	—			(928,978		)
Numerator for use in diluted loss per share	$	(47,506,869	)	$	(12,164,539	)

Denominator
Weighted average number of common shares outstanding	72,932,199			66,846,481
Effect of dilutive potential common shares	—			172,480
Denominator for use in diluted loss per share	72,932,199			67,018,961

Net loss per share, diluted	$	(0.65	)	$	(0.18	)

The following table summarizes potential common shares that were excluded from the diluted net loss per share calculation because of their anti-dilutive effect for the three months ended September 30, 2016 and 2015:




Common Stock Equivalents	2016	2015
Options to purchase common stock	6,747,961	2,812,185
Restricted stock units	771,335	—
Convertible preferred stock	8,456	8,456
Total	7,527,752	2,820,641

The following table summarizes potential common shares that were excluded from the diluted net loss per share calculation because of their anti-dilutive effect for the nine months ended September 30, 2016 and 2015:




Common Stock Equivalents	2016	2015
Options to purchase common stock	6,747,961	5,875,211
Warrants to purchase common stock	284,091	580,904
Restricted stock units	771,335	230,000
Convertible preferred stock	8,456	8,456
Total	7,811,843	6,694,571

12. Stock-Based Compensation

The Company incurs stock-based compensation expense related to restricted stock units and stock options. The fair value of restricted stock is determined by the closing market price of the Company's common stock on the date of grant. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility and expected option life. The Company amortizes the fair value of the awards expected to vest on a straight-line basis over the requisite service period of the awards. Expected volatility is based on historical volatility. The expected life of options granted is based on historical expected life. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The forfeiture rate is based on historical data, and the Company records stock-based compensation expense only for those awards that are expected to vest. The dividend yield is based on the fact that no dividends have been paid historically and none are currently expected to be paid in the foreseeable future.

The weighted average assumptions used in the Black-Scholes model for employees and directors are presented below:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Risk-free interest rate	0.83%	1.05%	0.91%	0.99%
Expected volatility	76%	75%	76%	74%
Expected life in years	5.0	5.0	5.0	5.0
Dividend yield	—	—	—	—
Forfeiture rate	7%	7%	7%	7%

Total employee and director compensation cost for the Company's stock plan recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016 was $ 2.1 million and $ 7.0 million , respectively, of which $ 1.1 million and $ 3.8 million were included in research and development expenses and $ 1.0 million and $ 3.2 million were included in general and administrative expenses, respectively.

respectively, of which $565,000 and $2.6 million were included in research and development expenses and $559,000 and $2.0 million were included in general and administrative expenses, respectively.

At September 30, 2016 , there was $6.9 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.0 years .

The weighted average grant date fair value per share (using the Black-Scholes option pricing model) was $5.69 and $ 4.56 for employee and director stock options granted during the three and nine months ended September 30, 2016 , respectively, and $4.59 and $4.62 for employee and director stock options granted during the three and nine months ended September 30, 2015 , respectively.

At September 30, 2016 , there was $4.4 million of total unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.2 years.

The weighted average grant date fair value per share was $ 9.35 and $7.37 for restricted stock units granted during the three and nine months ended September 30, 2016 , respectively, and $7.76 for restricted stock units granted during the nine months ended September 30, 2015. There were no restricted stock units granted during the three months ended September 30, 2015.

The fair value of options granted to non-employees at the measurement dates were estimated using the Black-Scholes pricing model. Total stock-based compensation for options granted to non-employees for the three and nine months ended September 30, 2016 was $81,000 and $381,000 , respectively. Total stock-based compensation for options granted to non-employees for the three and nine months ended September 30, 2015 was $3,000 and $273,000 , respectively.

13. Related Party Transactions

GeneOne Life Sciences

On May 26, 2015, the Company entered into a Collaborative Development Agreement with GeneOne to co-develop a DNA vaccine for MERS (Middle East Respiratory Syndrome) through phase I clinical trials. Under the terms of the agreement, GeneOne will be responsible for funding all preclinical and clinical studies through Phase I. In return, GeneOne will receive up to 35% milestone-based ownership interest in the MERS immunotherapy upon achievement of the last milestone event of completion of the Phase I safety and immunogenicity study. The collaborative research program shall terminate upon the completion of activities under the development plan, unless sooner terminated.

In January 2016, the Company and Gene One entered into a First Amendment to the May 2015 Collaborative Development Agreement to expand the agreement to test and advance the Company's DNA-based vaccine for preventing and treating Zika virus. GeneOne will be responsible for funding all preclinical and clinical studies through Phase I. In return, GeneOne will receive up to 35% milestone-based ownership interest in the Zika immunotherapy upon achievement of the last milestone event of the completion of the Phase I safety and immunogenicity study. All other agreement terms remain the same.

On September 23, 2014, the Company entered into a Collaborative Development Agreement with GeneOne to co-develop an Ebola vaccine through phase I clinical trials. In July 2015, the Company amended the Agreement with an effective date of April 2015 to change control of development in return for the Company’s payment of certain development fees.

On October 7, 2011, the Company entered into a Collaborative Development and License Agreement (the “Hep Agreement”) with GeneOne. Under the Hep Agreement, as originally executed, the Company and GeneOne agreed to co-develop the Company’s SynCon ^® therapeutic vaccines for hepatitis B and C infections (the “Products”). Under the terms of the Hep Agreement, GeneOne will receive marketing rights for the Products in Asia, excluding Japan, and in return will fully fund IND-enabling and initial Phase I and II clinical studies with respect to the Products. The Company will receive from GeneOne payments based on the achievement of clinical milestones and royalties based on sales of the Products in the licensed territories, retaining all commercial rights to the Products in all other territories. On August 21, 2013, the Company amended the Hep Agreement to grant back to the Company hepatitis B, along with all associated rights, from the collaboration in return for certain remuneration including a percentage of license fees. On October 7, 2013, the Company further amended the Hep Agreement to in part provide exclusive patent rights to IL-28 technology for use with the Products in Asia, excluding Japan. The Hep Agreement shall terminate upon the later of the expiration or abandonment of the last patent that is a component of the rights or 20 years after the effective date.

On March 24, 2010, the Company entered into a Collaboration and License Agreement (the “GeneOne Agreement”) with GeneOne. Under the GeneOne Agreement, the Company granted GeneOne an exclusive license to Inovio’s SynCon ^® universal influenza vaccine delivered with electroporation to be developed in certain countries in Asia (the “Product”). As consideration for the license granted to GeneOne, the Company received payment of $3.0 million , and will receive research support, annual license maintenance fees and royalties on net Product sales. The Company recorded the $3.0 million as deferred revenue from affiliated entity, and will recognize it as revenue over the eight year expected period of the Company’s performance obligation. In addition, contingent upon achievement of clinical and regulatory milestones, the Company will receive development

payments over the term of the GeneOne Agreement. The GeneOne Agreement also provides Inovio with exclusive rights to supply devices for clinical and commercial purposes (including single use components) to GeneOne for use in the Product. The term of the GeneOne Agreement commenced upon execution and will extend on a country by country basis until the last to expire of all Royalty Periods for the territory (as such term is defined in the GeneOne Agreement) for any Product in that country, unless the GeneOne Agreement is terminated earlier in accordance with its provisions as a result of breach, by mutual agreement, or by GeneOne's right to terminate without cause upon prior written notice.

For the three and nine months ended September 30, 2016 , the Company recognized revenue from GeneOne of $ 452,000 and $ 1.0 million , respectively, which consisted of licensing and other fees from the influenza and Zika collaborations. Operating expenses recorded from transactions with GeneOne for the three and nine months ended September 30, 2016 include $ 801,000 and $ 2.1 million , respectively, related primarily to biologics manufacturing. For the three and nine months ended September 30, 2015 , the Company recognized revenue from GeneOne of $113,000 and $338,000 , respectively, which consisted of licensing and other fees. Operating expenses related to GeneOne for the three and nine months ended September 30, 2015 include $1.1 million and $6.5 million , respectively, related to biologics manufacturing. At September 30, 2016 and December 31, 2015 , the Company had an accounts receivable balance of $ 355,000 and $ 4,000 , respectively, and an accounts payable and accrued liability balance of $93,000 and $165,000 , respectively, related to GeneOne and its subsidiaries. At September 30, 2016 and December 31, 2015 , $619,000 and $373,000 of prepayments made to GeneOne were classified as long-term other assets on the condensed consolidated balance sheet, respectively.

OncoSec Medical Incorporated

The Company's non-executive Chairman, Dr. Avtar Dhillon, is also the non-executive Chairman of OncoSec.

At September 30, 2016, the Company holds a warrant to purchase 150,000 shares of common stock of OncoSec at an exercise price of $20.00 per share. On September 28, 2016, the Company's warrant expired to purchase 50,000 shares of common stock of OncoSec at an exercise price of $24.00 per share. (See Note 7 for further discussion.)

Plumbline Life Sciences, Inc.

In May 2014, the Company's 85% owned subsidiary VGX Animal Health entered into an agreement for the sale of its animal health assets to PLS of Korea. The assets transferred included an exclusive license with Inovio for animal applications of its growth hormone-releasing hormone ("GHRH") technology and animal DNA vaccines plus a non-exclusive license to Inovio electroporation delivery systems. In return, VGX Animal Health received $2.0 million in cash, of which $1.0 million was received in May 2015 and the remainder in May 2016, and 465,364 shares of PLS, of which the Company received 395,758 shares or approximately 16.9% of PLS common stock.

As of September 30, 2016 the Company accounts for its ownership interest in PLS under the accounting guidance for investments considered available-for-sale (Accounting Standards Codification (ASC) 320). The original carrying value of the Company's investment in PLS was $0 . On July 28, 2015, PLS registered on the Korea New Exchange (KONEX) Market. The total carrying value of the Company's investment in PLS was $4.5 million as of September 30, 2016 . The fair value is based on the market value of the 395,758 common shares owned, listed on the KONEX. The changes in carrying value of PLS are recorded in the condensed consolidated statements of comprehensive income (loss) as an unrealized gain (loss) on investment in affiliated entity.

The Wistar Institute

The Company's director, Dr. David B Weiner, is the Executive Vice President and Director of the Vaccine Center of The Wistar Institute ("Wistar").

On March 16, 2016, the Company entered into collaborative research agreements with Wistar for preventive and therapeutic DNA-based immunotherapy applications and products for cancers and infectious diseases developed by Dr. Weiner and his Wistar laboratory. The Company will reimburse Wistar for all direct and indirect costs incurred in the conduct of the collaborative research not to exceed $3.1 million during the five -year term of the agreement. The Company will have the exclusive right to in-license new intellectual property developed in this collaboration.

For the three and nine months ended September 30, 2016 , the Company recognized revenue from Wistar of $228,000 , related to work performed on a research sub-award agreement. Operating expenses recorded from Wistar for the three and nine months ended September 30, 2016 were $329,000 and $586,000 , respectively, related to the collaborative research agreements and sub-contract related to the DARPA Ebola grant. At September 30, 2016 , the Company had an accounts receivable balance of $39,000 and an accounts payable and accrued liability balance of $401,000 related to Wistar.

14. Commitments and Contingencies

In October 2016, the Company entered into an office lease (the “new Lease”) for a property located in San Diego, California. The total space is approximately 51,000 square feet. The Company intends to use the facility for office, manufacturing and research and development purposes. The term of the new Lease commences on the earlier to occur of the date the Company first conducts business from any portion of the premises, or June 1, 2017. The initial term of the new Lease is ten years, with a right to terminate on November 30, 2023, with appropriate notice to the landlord.

The base rent adjusts periodically throughout the term of the new Lease, with a portion of the rent abated for certain periods during the first two years of the initial term. In addition, the Company will pay the landlord its share of operating expenses and has paid a security deposit of $95,000 .

In March 2014, the Company entered into an office lease (the "Lease") with a publicly owned real estate investment trust, located in Plymouth Meeting, Pennsylvania. The Company occupied the new space in June 2014. The initial term of the Lease is 11.5 years and the Company plans to use the facility for office purposes.

The base rent adjusts periodically throughout the 11.5 year term of the Lease, with monthly payments ranging from $0 to $58,000 . In addition, the Company will pay the landlord its share of operating expenses and a property management fee and has paid a security deposit of $49,000 . In July 2015, the Company amended the lease to increase the total leased space. The commencement of the amended lease was in the first quarter of 2016 and increased monthly lease payments by approximately $ 16,000 . The Company has capitalized $1.1 million of tenant improvements to the Plymouth Meeting headquarters within fixed assets on the condensed consolidated balance sheet, offset by a corresponding amount recorded in deferred rent.

In June 2015, the Company amended the lease for its corporate office in San Diego, California to increase the total leased space and occupy the entire building. The commencement of the amended lease was in January 2016 and increased monthly lease payments by approximately $13,000 . The Company has capitalized $773,000 of tenant improvements within fixed assets on the condensed consolidated balance sheet related to this additional space, and has recorded a corresponding increase to deferred rent.

After entering into the new Lease, the Company's future minimum lease payments under all non-cancelable operating leases as of October 10, 2016 are as follows:



Remainder of 2016	$	449,000
2017	1,785,000
2018	2,266,000
2019	2,682,000
2020	2,869,000
Thereafter	16,498,000
Total	$	26,549,000

In the normal course of business, the Company is a party to a variety of agreements pursuant to which they may be obligated to indemnify the other party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these types of agreements have not had a material effect on our business, consolidated results of operations or financial condition.

15. Collaborative Agreements

MedImmune

On August 7, 2015, the Company entered into a license and collaboration agreement with MedImmune, the global biologics research and development arm of AstraZeneca. Under the agreement, MedImmune acquired exclusive rights to the Company's INO-3112 immunotherapy, which targets cancers caused by human papillomavirus (HPV) types 16 and 18. MedImmune made an upfront payment of $27.5 million to the Company in September 2015 and has agreed to make additional future development, regulatory and commercial event-based payments totaling up to $700 million . MedImmune will fund all development costs associated with INO-3112 immunotherapy. The Company is entitled to receive up to mid-single to double-digit tiered royalties on INO-3112 product sales. Within the broader collaboration, the Company and MedImunne will attempt to develop up to two additional DNA-based cancer vaccine products not included in the Company's current product pipeline, which MedImmune will have the exclusive rights to develop and commercialize. The Company expects that it will receive potential development, regulatory and commercialization event-based payments and will be eligible to receive royalties on

worldwide net sales for these additional cancer vaccine products. The Company has assessed event-based payments under the authoritative guidance for research and development milestones and determined that none of the event-based payments represent a milestone under the milestone method of accounting.

The Company identified the deliverables at the inception of the agreement. The Company has determined that the license to INO-3112, the license for the research collaboration products with related research and development services and the product development services for INO-3112 individually represent separate units of accounting because each deliverable has standalone basis. The Company considered the provisions of the multiple-element arrangement guidance in determining whether the deliverables outlined above have standalone basis and thus should be treated as separate units of accounting. The Company determined that the license for INO-3112, the license for the research collaboration products with related research and development services, and the product development services for INO-3112 have standalone basis and represent separate units of accounting because the rights conveyed permit MedImmune to perform all efforts necessary to complete development, commercialize and begin selling the product upon regulatory approval. In addition, MedImmune has the appropriate development, regulatory and commercial expertise with products similar to the product licensed under the agreement and has the ability to engage third parties to manufacture the product allowing MedImmune to realize the value of the license without receiving any of the remaining deliverables. MedImmune can also sublicense its license rights to third parties. Also, the Company determined that the product development services for INO-3112 represents an individual unit of accounting as MedImmune could perform such services and/or could acquire these on a separate basis. The best estimated selling prices for these units of accounting were determined based on market conditions, the terms of comparable collaborative agreements for similar technology in the pharmaceutical and biotechnology industry, the Company's pricing practices and pricing objectives and the nature of the research and development services to be provided. While market data and the cost-to-recreate method under the cost approach were considered throughout the valuation process, ultimately, the estimated selling prices of the licenses were determined utilizing two forms of the relief from royalty method under the income approach. The arrangement consideration was allocated to the deliverables based on the relative selling price method.

The amount allocable to the delivered unit or units of accounting is limited to the amount that is considered fixed and determinable and is not contingent upon the delivery of additional items or meeting other specified performance conditions. Based on the results of the Company's analysis, the $27.5 million up-front payment was allocated as follows: $15.0 million to the product license to INO-3112 and $12.5 million for the license to the research collaboration products and related research and developments services. The amount allocated to the license for INO-3112 was recognized as revenue under collaborative research and development arrangements during the year ended December 31, 2015 as this was determined to be earned upon the granting of the license and delivery of the related knowledge and data. The remaining amount related to the research collaboration products and related research and development services is classified as short-term deferred revenue as of September 30, 2016 . The Company believes that no substantive value related to the research collaboration products license and research services has been transferred to MedImmune prior to their selection of the first research collaboration product since there is no economic benefit from the research unless such product candidate is selected. Furthermore, if MedImmune decides to not proceed with the selection of the product candidate, the research collaboration product license would be terminated. Therefore, the Company believes the license for the research collaboration products is not delivered until the research services are completed and the selection of the product candidate is made by MedImmune (i.e. exercise of an option). The Company has classified the amount allocated to this deliverable as short-term deferred revenue as it is expected that MedImmune will select a product candidate within the next six months. The Company will recognize revenues associated with the product development services for INO-3112 as revenues under collaborative arrangements as the related services are performed and according to the relative selling price method of the allocable arrangement consideration. During the three and nine months ended September 30, 2016 , the Company recognized revenues of $581,000 and $1.3 million from MedImmune, respectively. During the three and nine months ended September 30, 2015 , the Company recognized revenues of $15.1 million from MedImmune. As of September 30, 2016 , the Company has a deferred revenue and accounts receivable balance of $13.6 million and $1.0 million , respectively, related to the Agreement.

Roche

In September 2013, the Company entered into a Collaborative, License, and Option Agreement (the “Agreement”) with Roche. The companies agreed to co-develop multi-antigen DNA immunotherapies targeting prostate cancer and hepatitis B.

Under the agreement, Roche acquired an exclusive worldwide license for the Company's DNA-based vaccines INO-5150 (targeting prostate cancer) and INO-1800 (targeting hepatitis B) as well as the use of the Company's CELLECTRA ^® electroporation technology for delivery of the vaccines. Roche also obtained an option to license additional vaccines in connection with a collaborative research program in prostate cancer. Under the terms of the agreement the Company also agreed to perform research and development services, which include preclinical and clinical costs, and manufacturing and supply services, at Roche's expense.

On November 14, 2014, Roche provided notice that they would be partially terminating the Agreement with respect to the development of INO-5150, the Company’s DNA immunotherapy targeting prostate cancer, as well as the research collaboration

in prostate cancer under the Agreement. The termination was effective in February 2015, 90 days after the date of notice. All of Roche’s rights to INO-5150, including the right to license the product to other parties, have been returned to the Company.

On July 28, 2016, Roche provided notice that they would be discontinuing its Agreement with the Company and its development of INO-1800, the Company’s DNA immunotherapy against the hepatitis B virus. The termination was effective in October 2016, 90 days after the date of notice. All of Roche’s rights to INO-1800, including the right to license the product to other parties, have been returned to the Company.

Under the terms of the agreement, Roche made an upfront payment of $10.0 million and agreed to make additional development, regulatory and commercial event-based payments. These potential future event-based payments have been reduced significantly due to the partial termination of the Agreement. The Company has assessed event-based payments under the authoritative guidance for research and development milestones and determined that $3.0 million related to INO-1800 represents a milestone under the milestone method of accounting.

The Company identified the deliverables at the inception of the agreement. The Company has determined that the license to INO-5150 and INO-1800, the option right to license additional vaccines, research and development services, manufacturing and drug supply, and participation in the joint steering committee individually represent separate units of accounting because each deliverable has standalone value. The Company considered the provisions of the multiple-element arrangement guidance in determining whether the deliverables outlined above have standalone value and thus should be treated as separate units of accounting. The Company determined that the licenses and option right to license additional vaccines have standalone value and represent separate units of accounting because the rights conveyed permit Roche to perform all efforts necessary to complete development, commercialize and begin selling the product upon regulatory approval. In addition, Roche has the appropriate development, regulatory and commercial expertise with products similar to the product licensed under the agreement and has the ability to engage third parties to manufacture the product allowing Roche to realize the value of the license without receiving any of the remaining deliverables. Roche can also sublicense its license rights to third parties. Also, the Company determined that the research services, committee participation and manufacturing services each represent individual units of accounting as Roche could perform such services and/or could acquire these on a separate basis. The best estimated selling prices for these units of accounting were determined based on market conditions, the terms of comparable collaborative agreements for similar technology in the pharmaceutical and biotechnology industry, the Company's pricing practices and pricing objectives and the nature of the research and development services to be provided. While market data and the cost-to-recreate method under the cost approach were considered throughout the valuation process, ultimately, the selling prices of the licenses and option right were determined utilizing two forms of the relief from royalty method under the income approach. The arrangement consideration was allocated to the deliverables based on the relative selling price method.

The amount allocable to the delivered unit or units of accounting is limited to the amount that is considered fixed and determinable and is not contingent upon the delivery of additional items or meeting other specified performance conditions. Based on the results of the Company's analysis, the $10.0 million up-front payment was allocated as follows: $5.0 million and $3.4 million to the license to INO-5150 and INO-1800, respectively, $1.5 million to the option right and $155,000 to the joint steering committee obligation. The amounts allocated to the licenses for INO-5150 and INO-1800 were recognized as revenue under collaborative research and development arrangements during the year ended December 31, 2013 as these were determined to be earned upon the granting of the license and delivery of the related knowledge and data. Due to the Company's continuing involvement obligations, the remaining amounts were classified as deferred revenue as of December 31, 2013. The Company will recognize revenues associated with research and development services and manufacturing and drug supply as revenues under collaborative arrangements as the related services are performed and according to the relative selling price method of the allocable arrangement consideration. During the three and nine months ended September 30, 2016 , the Company recognized revenues of $ 1.7 million and $4.7 million from Roche, respectively. During the three and nine months ended September 30, 2015 , the Company recognized revenues of $1.3 million and $9.9 million from Roche, respectively. Of the revenue recognized during the nine-month period ended September 30, 2015, $3.0 million related to a milestone earned during the period and $3.0 million related to previously deferred revenue that was recognized based on the partial termination of the Agreement in February 2015. As of September 30, 2016 , the Company has a deferred revenue and accounts receivable balance of $226,000 and $4.8 million , respectively, related to the Agreement.

DARPA- Ebola

In April 2015, the Company received a grant from the Defense Advanced Research Projects Agency ("DARPA") to lead a collaborative team to develop multiple treatment and prevention approaches against Ebola. The Inovio-led consortium is taking a multi-faceted approach to develop products to prevent and treat Ebola infection. The award covers pre-clinical development costs as well as good manufacturing practice manufacturing costs and the phase I clinical study costs. The funding period is over two years and covers a base award of $19.6 million and an option award of $24.6 million , which was exercised in September 2015. The development proposal includes a second option of $11.1 million to support additional product supply and clinical development activities. The options are contingent upon the successful completion of certain pre-clinical development milestones. During the three and nine months ended September 30, 2016 , the Company recognized revenues of

$9.4 million and $17.6 million , respectively, from DARPA related to the grant. During the three and nine months ended September 30, 2015 , the Company recognized revenues of $7.3 million from DARPA related to the grant. As of September 30, 2016 , the Company has a deferred revenue and accounts receivable balance of $1.3 million and $11.0 million , respectively, related to the DARPA grant.

16. Subsequent Events

In October 2016, the Company entered into an office lease (the “Lease”) for a property located in San Diego, California. The total space is approximately 51,000 square feet. The Company intends to use the facility for office, manufacturing and research and development purposes. The term of the Lease commences on the earlier to occur of the date the Company first conducts business from any portion of the premises, or June 1, 2017. The initial term of the Lease is ten years, with a right to terminate on November 30, 2023, with appropriate notice to the landlord.

The base rent adjusts periodically throughout the term of the Lease, with a portion of the rent abated for certain periods during the first two years of the initial term. In addition, the Company will pay the landlord its share of operating expenses and has paid a security deposit of $95,000 .

Between October 1 and October 10, 2016, the Company sold 90,500 shares of common stock under its Sales Agreement for net proceeds of $837,000 . No sales were made under the Sales Agreement from October 11, 2016 through November 8, 2016.

On October 24, 2016, the Company announced that the U.S. Food and Drug Administration (FDA) has placed a clinical hold on its proposed phase III clinical program for VGX-3100. A clinical hold is a notification issued by the FDA to a trial sponsor to delay a proposed clinical trial or suspend an ongoing clinical trial. This study has not yet been initiated and has not enrolled or dosed subjects. Additionally, the hold does not pertain to any of the Company's other ongoing clinical studies.

The Company anticipates receiving a formal letter with complete information from the FDA within 30 days. In its initial communication, the FDA has requested additional data to support the Company's shelf-life claim for the single-use disposable array of the newly designed and manufactured CELLECTRA ^® 5PSP immunotherapy delivery device. The Company is working diligently with the FDA to address its concerns and anticipates that the requested data will be available before the end of this year. The Company estimates that the start of the phase III clinical program will be delayed until the first half of 2017 pending resolution of the FDA’s requests.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report to conform such statements to actual results or to changes in our expectations.

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us that attempt to advise interested parties of the factors that affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the Caption “Risk Factors” and under the captions “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors” and in our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to: our history of losses; our lack of products that have received regulatory approval; uncertainties inherent in clinical trials and product development programs, including but not limited to the fact that pre-clinical and clinical results may not be indicative of results achievable in other trials or for other indications, that the studies or trials may not be successful or achieve desired results, that pre-clinical studies and clinical trials may not commence, have sufficient enrollment or be completed in the time periods anticipated, that results from one study may not necessarily be reflected or supported by the results of other similar studies, that results from an animal study may not be indicative of results achievable in human studies, that clinical testing is expensive and can take many years to complete, that the outcome of any clinical trial is uncertain and failure can occur at any time during the clinical trial process, and that our electroporation technology and DNA vaccines may fail to show the desired safety and efficacy traits in clinical trials; the availability of funding; the ability to manufacture vaccine candidates; the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or our collaborators, including alternatives that may be more efficacious or cost-effective than any therapy or treatment that we and our collaborators hope to develop; our ability to receive development, regulatory and commercialization event-based payments under our collaborative agreements; whether our proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity; and the impact of government healthcare proposals.

General

Inovio is a bio-pharmaceutical company that is developing active DNA immunotherapies and vaccines focused on treating and preventing cancers and infectious diseases. Our DNA-based immunotherapies, in combination with our proprietary electroporation delivery devices, are intended to generate robust immune responses, in particular T cells, in the body to fight target diseases. In 2014 we reported that in a controlled phase II clinical study we generated significant, functional antigen-specific T cells that correlated to clinically relevant efficacy against HPV-associated cervical precancer. This data was published in The Lancet in September 2015. We plan to launch a phase III study of this product in the first half of 2017 as part of our VGX-3100 phase III development program and are advancing multiple cancer clinical studies.

Our novel SynCon ^® immunotherapy design has shown the ability to help break the immune system’s tolerance of cancerous cells. Our SynCon ^® product design approach is also intended to facilitate cross-strain protection against known as well as new unmatched strains of pathogens such as influenza. Given the recognized role of killer T cells in eliminating cancerous or infected cells from the body and our published phase II results, our scientists believe our active immunotherapies may play an important role in helping fight multiple cancers and infectious diseases. Human data to date have shown a favorable safety profile of our DNA immunotherapies delivered using electroporation.

We or our collaborators are currently conducting or planning clinical studies of our proprietary SynCon ^® immunotherapies for HPV-caused pre-cancers (including cervical, anal and vulvar neoplasia), HPV-caused cancers (head and neck and cervical), prostate cancer, breast/lung/pancreatic cancer, hepatitis C virus (HCV), hepatitis B virus (HBV), HIV, Ebola, MERS (Middle East Respiratory Syndrome) and Zika virus.

Our corporate strategy is to advance and protect a differentiated immunotherapy platform and use its unique capabilities to design and develop an array of cancer and infectious disease products. We aim to advance products through to commercialization. We continue to leverage third party resources through collaborations and partnerships including product license agreements. Our partners and collaborators include MedImmune, LLC, The Wistar Institute, University of Pennsylvania, GeneOne Life Science Inc., Drexel University, National Microbiology Laboratory of the Public Health Agency of Canada, National Institute of Allergy and Infectious Diseases (“NIAID”), United States Military HIV Research Program (“USMHRP”), U.S. Army Medical Research Institute of Infectious Diseases (“USAMRIID”), HIV Vaccines Trial Network (“HVTN”), and Defense Advanced Research Projects Agency (“DARPA”).

All of our potential human products are in research and development phases. We have not generated any revenues from the sale of any such products, and we do not expect to generate any such revenues for at least the next several years. We earn revenue from license fees and milestone revenue, collaborative research and development agreements, grants and government contracts. Our product candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing. All product candidates that we advance to clinical testing will require regulatory approval prior to commercial use, and will require significant costs for commercialization. We may not be successful in our research and development efforts, and we may never generate sufficient product revenue to be profitable.

Recent Developments

On July 28, 2016 Roche provided notice that they would be discontinuing our collaboration and the development of INO-1800, our DNA immunotherapy against the hepatitis B virus. The termination was effective in October 2016, 90 days after the notice date. All of Roche’s rights to INO-1800, including the right to license the product to other parties, have been returned to us. We plan to continue to develop our hepatitis B DNA vaccine (INO-1800) and independently advance our phase I study of INO-1800.

In August 2016, we incorporated a 100%-owned subsidiary, GENEOS Therapeutics, Inc., to develop and commercialize neo-antigen based personalized cancer therapies. While we pursue our SynCon ^® immunotherapy design to break tolerance and create cancer products targeting shared tumor specific antigens, GENEOS will exclusively focus on leveraging the Company's DNA immunotherapy technology platform to advance the field of patient-specific neo-antigen therapies. Our clinically validated DNA based platform is well suited for advancing individualized therapies due to its rapid product design and manufacturing benefits, ability to combine multiple neo-antigens into formulations, and generation of potent killer T cell responses that are needed to drive clinical efficacy.

On October 24, 2016, we announced that the U.S. Food and Drug Administration (FDA) has placed a clinical hold on our proposed phase III clinical program for VGX-3100. A clinical hold is a notification issued by the FDA to a trial sponsor to delay a proposed clinical trial or suspend an ongoing clinical trial. This study has not yet been initiated and has not enrolled or dosed subjects. Additionally, the hold does not pertain to any of our other ongoing clinical studies.

We anticipate receiving a formal letter with complete information from the FDA within 30 days. In its initial communication, the FDA has requested additional data to support our shelf-life claim for the single-use disposable array of the newly designed and manufactured CELLECTRA ^® 5PSP immunotherapy delivery device. We are working diligently with the FDA to address its concerns and anticipate that the requested data will be available before the end of this year. We estimate that the start of the phase III clinical program will be delayed until the first half of 2017 pending resolution of the FDA’s requests.

As of September 30, 2016 we had an accumulated deficit of $ 408.6 million . We expect to continue to incur substantial operating losses in the future due to our commitment to our research and development programs, the funding of preclinical studies, clinical trials and regulatory activities and the costs of general and administrative activities.

Critical Accounting Policies

There have been no significant changes to our critical accounting policies since December 31, 2015. For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to Item 7 in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 to our Consolidated Financial Statements contained in our Annual Report.

Adoption of Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is contained in Note 5 to the Condensed Consolidated Financial Statements, included elsewhere in this report.

Results of Operations

Table of Contents

Revenue. We had total revenue of $ 12.5 million and $26.9 million for the three and nine months ended September 30, 2016 , respectively, as compared to $24.2 million and $34.6 million for the three and nine months ended September 30, 2015 , respectively. Revenue primarily consists of revenue under collaborative research and development arrangements, grants and government contracts.

Revenue under collaborative research and development arrangements, including arrangements with affiliated entities, was $ 2.9 million and $7.2 million for the three and nine months ended September 30, 2016 , respectively, as compared to $16.6 million and $25.5 million for the three and nine months ended September 30, 2015 , respectively. The decrease for the three-month period year over year was primarily due to the up-front revenue recognized in 2015 from our Agreement with MedImmune entered into in August 2015 (See Note 15). The decrease for the nine-month period year over year was primarily due to the up-front revenue recognized in 2015 from our Agreement with MedImmune as well as the revenue recognized from the Roche Agreement in 2015, related to the partial termination of the Agreement in February 2015 as well as the $3.0 million milestone earned during the period.

During the three and nine months ended September 30, 2016 , we recorded grant and miscellaneous revenue, including arrangements with affiliated entities, of $9.6 million and $19.6 million , respectively, as compared to $7.6 million and $9.2 million for the three and nine months ended September 30, 2015 , respectively. The increase for the three-month period year over year was primarily due to an increase in revenue recognized from our DARPA Ebola grant of $2.1 million. The increase for the nine-month period year over year was primarily due to an increase in revenue recognized from our DARPA Ebola grant and subcontract with the University of Pennsylvania for the treatment of infectious diseases of $10.3 million and $572,000, respectively, offset by a decrease in revenue recognized from our contract with the NIAID of $643,000.

Research and development expenses. Research and development expenses for the three and nine months ended September 30, 2016 , were $ 27.0 million and $64.8 million , respectively, as compared to $16.1 million and $42.2 million for the three and nine months ended September 30, 2015 , respectively. The increase for the three-month period year over year was primarily due to increased expenses related to our DARPA Ebola grant, an increase in clinical studies expenses, an increase in employee headcount to support clinical trials and partnerships, an increase in expenses related to our Hepatitis B collaboration and an increase in non-cash stock based compensation of $5.6 million, $2.8 million, $2.1 million, $511,000 and $471,000, respectively. These were offset by a decrease in sub-license fee expense based on the up-front payment received from MedImmune and Roche milestone achievement in 2015 of $2.4 million, among other variances. The increase for the nine-month period year over year was primarily due to an increase in expenses related to our DARPA Ebola grant, an increase in clinical studies expenses, an increase in employee headcount to support clinical trials and partnerships, an increase in contract labor and engineering and laboratory supplies and an increase in non-cash stock based compensation of $7.4 million, $6.6 million, $6.0 million, $1.9 million and $1.2 million, respectively. These were offset by a decrease in sub-license fee expense based on the up-front payment received from MedImmune and Roche milestone achievement in 2015 of $2.6 million, among other variances.

General and administrative expenses. General and administrative expenses, which include business development expenses, the amortization of intangible assets and patent expenses, for the three and nine months ended September 30, 2016 , were $ 5.8 million and $16.9 million , respectively, as compared to $4.4 million and $13.2 million for the three and nine months ended September 30, 2015 , respectively. The increase for the three-month period year over year was primarily due to an increase in non-cash stock based compensation, employee headcount, employee training, recruitment and related expenses and amortization of intangible assets of $534,000 $331,000, $293,000 and $211,000, respectively, among other variances. The increase for the nine-month period year over year was primarily due to an increase in non-cash stock based compensation, employee headcount, employee training, recruitment and related expenses, accounting fees and contract labor of $1.3 million, $787,000, $644,000, $374,000 and $299,000, respectively, among other variances.

Stock-based compensation. Stock-based compensation cost is measured at the grant date, based on the fair value of the award reduced by estimated forfeitures, and is recognized as expense over the employee's requisite service period. Total employee and director compensation cost for our stock plans for the three and nine months ended September 30, 2016 was $ 2.1 million and $ 7.0 million , respectively. From these amounts, $ 1.1 million and $ 3.8 million were included in research and development expenses and $ 1.0 million and $ 3.2 million were included in general and administrative expenses, respectively. Total employee and director compensation cost for our stock plans for the three and nine months ended September 30, 2015 was $1.1 million and $4.6 million, respectively. From these amounts, $565,000 and $2.6 million were included in research and development expenses and $559,000 and $2.0 million were included in general and administrative expenses, respectively. The increase for the three and nine-month period year over year was primarily due to an increase in the number of employee stock options and restricted stock units granted.

Change in fair value of common stock warrants. The net change in fair value of common stock warrants for the three and nine months ended September 30, 2016 was an increase of $3,000 and decrease of $(517,000), respectively, as compared to increases of $519,000 and $468,000 for the three and nine months ended September 30, 2015 . The variance is primarily due to

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the revaluation of the registered common stock warrants issued by us in March 2013. We revalue these warrants at each balance sheet date to fair value. If unexercised, the remaining warrants will expire in September 2018.

Gain (Loss) from investment in affiliated entity. The gain (loss) is a result of the change in the fair market value of the investment in GeneOne for the three and nine months ended September 30, 2016 and 2015.

Gain on sale of assets. The gain on sale of assets is related to the May 2014 sale of animal health assets to Plumbline Life Sciences ("PLS"). The gain is related to the cash received related to the sale in May 2016 and 2015 (See Note 13).

Liquidity and Capital Resources

Historically, our primary uses of cash have been to finance research and development activities including clinical trial activities in the oncology, DNA vaccines and other immunotherapy areas of our business. Since inception, we have satisfied our cash requirements principally from proceeds from the sale of equity securities.

Working Capital and Liquidity

As of September 30, 2016 , we had cash and short-term investments of $ 119.7 million and working capital of $ 98.9 million , as compared to $163.0 million and $140.4 million, respectively, as of December 31, 2015. The decrease in cash and short-term investments during the nine months ended September 30, 2016 was primarily due to expenditures related to our research and development activities and various general and administrative expenses related to legal, consultants, accounting and audit, and corporate development.

Net cash used in operating activities was $ 47.7 million and $ 5.7 million for the nine months ended September 30, 2016 and 2015, respectively. The variance was primarily due to the increase in net loss for the period due to a decrease in revenue of $7.8 million and an increase in research and development and general and administrative operating expenses of $22.6 million and $3.7 million, respectively. In addition, an up-front payment of $27.5 million was received from MedImmune in September 2015, of which $12.5 million was recorded as deferred revenue at September 30, 2015.

Net cash provided by (used in) investing activities was $6.4 million and $ (33.6) million for the nine months ended September 30, 2016 and 2015, respectively. The variance was primarily the result of timing differences in short-term investment purchases, sales and maturities.

Net cash provided by financing activities was $6.9 million and $ 84.2 million for the nine months ended September 30, 2016 and 2015, respectively. The cash from financing activities in 2016 and 2015 was primarily related to the “at-the-market” (ATM) sales agreement entered into in June 2016 and the May 2015 equity financing, respectively.

In June 2016, we entered into an ATM sales agreement with an outside placement agent (the “Placement Agent”) to sell shares of our common stock with aggregate gross proceeds of up to $50.0 million from time to time, through an ATM equity offering program under which the Placement Agent will act as sales agent. During the nine months ended September 30, 2016 , we sold 568,248 shares of common stock under the ATM sales agreement for net proceeds of $5.5 million.

On May 5, 2015, we closed an underwritten public offering of 10,925,000 shares of our common stock, including 1,425,000 shares of common stock issued pursuant to the underwriter’s exercise of its overallotment option, at the public offering price of $8.00 per share. The net proceeds, after deducting the underwriter’s discounts and commission and other offering expenses, were $81.9 million.

During the nine months ended September 30, 2016 , stock options to purchase 625,925 shares of common stock were exercised for total proceeds to the Company of $1.8 million. During the nine months ended September 30, 2015 , warrants and stock options to purchase 514,712 shares of common stock were exercised for total proceeds to the Company of $2.4 million.

As of September 30, 2016 , we had an accumulated deficit of $ 408.6 million . We have operated at a loss since 1994, and we expect to continue to operate at a loss for some time. The amount of the accumulated deficit will continue to increase, as it will be expensive to continue research and development efforts. If these activities are successful and if we receive approval from the FDA to market our DNA vaccine products, then we will need to raise additional funding to market and sell the approved vaccine products and equipment. We cannot predict the outcome of the above matters at this time. We are evaluating potential collaborations as an additional way to fund operations. We believe that current cash and short-term investments are sufficient to meet planned working capital requirements for at least the next twelve months.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Market risk represents the risk of loss that may impact our consolidated financial position, results of operations or cash flows due to adverse changes in financial and commodity market prices and rates. We are exposed to market risk primarily in the area of changes in United States interest rates and conditions in the credit markets, and the recent fluctuations in interest rates and availability of funding in the credit markets primarily impact the performance of our investments. We do not have any material foreign currency or other derivative financial instruments. Under our current policies, we do not use interest rate derivative instruments to manage exposure to interest rate changes. We attempt to increase the safety and preservation of our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by investing in investment grade securities.

Fair Value measurements

We account for our common stock warrants pursuant to the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company's own stock, on the understanding that in compliance with applicable securities laws, the registered warrants require the issuance of registered securities upon exercise and do not sufficiently preclude an implied right to net cash settlement. We classify registered warrants on the condensed consolidated balance sheet as a current liability that is revalued at each balance sheet date subsequent to the initial issuance.

The investment in affiliated entity represents our ownership interest in the Korean based companies, GeneOne and PLS. We report these investments at fair value on the condensed consolidated balance sheet using the closing price of GeneOne and PLS shares of common stock as listed on the Korean Stock Exchange and Korea New Exchange Market, respectively.

Common stock warrants that we have received to purchase shares of OncoSec are classified on the condensed consolidated balance sheet as a long-term asset that is revalued at each balance sheet date subsequent to the initial receipt.

Foreign Currency Risk

We have operated primarily in the United States and most transactions during the nine months ended September 30, 2016 , have been made in United States dollars. Accordingly, we have not had any material exposure to foreign currency rate fluctuations, with the exception of the valuation of our equity investments in GeneOne and PLS which are denominated in South Korean Won. We do not have any foreign currency hedging instruments in place.

Certain transactions related to us are denominated primarily in foreign currencies, including Euros, British Pounds, Canadian Dollars and South Korean Won. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets where we conduct business, including the impact of the existing crisis in the global financial markets in such countries and the impact on both the United States dollar and the noted foreign currencies.

We do not use derivative financial instruments for speculative purposes. We do not engage in exchange rate hedging or hold or issue foreign exchange contracts for trading purposes. Currently, we do not expect the impact of fluctuations in the relative fair value of other currencies to be material in 2016 .

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, as appropriate to allow timely decisions regarding required disclosures.

Based on an evaluation carried out as of the end of the period covered by this quarterly report, under the supervision and with the participation of our management, including our CEO and CFO, our CEO and CFO have concluded that, as of the end of such period, our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of September 30, 2016 .

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended September 30, 2016 , that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to any material litigation or other material legal proceedings.

ITEM 1A. RISK FACTORS

The following Risk Factors do not reflect any material changes to the Risk Factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which we filed with the Securities and Exchange Commission on March 11, 2016. You should carefully consider and evaluate each of the following factors as well as the other information in this quarterly report on Form 10-Q, including our financial statements and the related notes, in evaluating our business and prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the following risks actually occur, our business and financial results could be harmed. In that case, the trading price of our common stock could decline. You should also consider the more detailed description of our business contained in our annual report on Form 10-K for the year ended December 31, 2015.

Risks Related to Our Business and Industry

We have incurred losses since inception, expect to incur significant net losses in the foreseeable future and may never become profitable.

We have experienced significant operating losses to date; as of September 30, 2016 our accumulated deficit was approximately $ 408.6 million . We have generated limited revenues, primarily consisting of license and grant revenue, and interest income. We expect to continue to incur substantial additional operating losses for at least the next several years as we advance our clinical trials and research and development activities. We may never successfully commercialize our vaccine product candidates or electroporation-based synthetic vaccine delivery technology and thus may never have any significant future revenues or achieve and sustain profitability.

We have limited sources of revenue and our success is dependent on our ability to develop our vaccine and other product candidates and electroporation equipment.

We do not sell any products and may not have any other products commercially available for several years, if at all. Our ability to generate future revenues depends heavily on our success in:


•	developing and securing United States and/or foreign regulatory approvals for our product candidates, including securing regulatory approval for conducting clinical trials with product candidates;


•	developing our electroporation-based DNA delivery technology; and


•	commercializing any products for which we receive approval from the FDA and foreign regulatory authorities.

Our electroporation equipment and product candidates will require extensive additional clinical study and evaluation, regulatory approval in multiple jurisdictions, substantial investment and significant marketing efforts before we generate any revenues from product sales. We are not permitted to market or promote our electroporation equipment and product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities. If we do not receive regulatory approval for and successfully commercialize any products, we will not generate any revenues from sales of electroporation equipment and products, and we may not be able to continue our operations.

None of our human vaccine product candidates has been approved for sale, and we may not develop commercially successful vaccine products.

Our human vaccine programs are in the early stages of research and development, and currently include vaccine product candidates in discovery, pre-clinical studies and phase I and II clinical studies. There is limited data regarding the efficiency of synthetic vaccines compared with conventional vaccines, and we must conduct a substantial amount of additional research and development before any regulatory authority will approve any of our vaccine product candidates. The success of our efforts to develop and commercialize our vaccine product candidates could fail for a number of reasons. For example, we could experience delays in product development and clinical trials. Our vaccine product candidates could be found to be ineffective or unsafe, or otherwise fail to receive necessary regulatory clearances. The products, if safe and effective, could be difficult to manufacture on a large scale or uneconomical to market, or our competitors could develop superior vaccine products more quickly and efficiently or more effectively market their competing products.

In addition, adverse events, or the perception of adverse events, relating to vaccines and vaccine delivery technologies may negatively impact our ability to develop commercially successful vaccine products. For example, pharmaceutical companies have been subject to claims that the use of some pediatric vaccines has caused personal injuries, including brain damage, central nervous system damage and autism. These and other claims may influence public perception of the use of vaccine products and could result in greater governmental regulation, stricter labeling requirements and potential regulatory delays in the testing or approval of our potential products.

We will need substantial additional capital to develop our synthetic vaccine and electroporation delivery technology and other product candidates and for our future operations.

Conducting the costly and time consuming research, pre-clinical and clinical testing necessary to obtain regulatory approvals and bring our vaccine delivery technology and product candidates to market will require a commitment of substantial funds in excess of our current capital. Our future capital requirements will depend on many factors, including, among others:


•	the progress of our current and new product development programs;


•	the progress, scope and results of our pre-clinical and clinical testing;


•	the time and cost involved in obtaining regulatory approvals;


•	the cost of manufacturing our products and product candidates;


•	the cost of prosecuting, enforcing and defending against patent infringement claims and other intellectual property rights;


•	competing technological and market developments; and


•	our ability and costs to establish and maintain collaborative and other arrangements with third parties to assist in potentially bringing our products to market.

Additional financing may not be available on acceptable terms, or at all. Domestic and international capital markets have been experiencing heightened volatility and turmoil, making it more difficult to raise capital through the issuance of equity securities. Furthermore, as a result of the recent volatility in the capital markets, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, and in some cases cease to provide, funding to borrowers. To the extent we are able to raise additional capital through the sale of equity securities or we issue securities in connection with another transaction, the ownership position of existing stockholders could be substantially diluted. If additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock and may involve significant fees, interest expense, restrictive covenants and the granting of security interests in our assets. Fluctuating interest rates could also increase the costs of any debt financing we may obtain. Raising capital through a licensing or other transaction involving our intellectual property could require us to relinquish valuable intellectual property rights and thereby sacrifice long-term value for short-term liquidity.

Our failure to successfully address ongoing liquidity requirements would have a substantially negative impact on our business. If we are unable to obtain additional capital on acceptable terms when needed, we may need to take actions that adversely affect our business, our stock price and our ability to achieve cash flow in the future, including possibly surrendering our rights to some technologies or product opportunities, delaying our clinical trials or curtailing or ceasing operations.

We depend upon key personnel who may terminate their employment with us at any time and we may need to hire additional qualified personnel in order to obtain financing, pursue collaborations or develop or market our product candidates.

The success of our business strategy will depend to a significant degree upon the continued services of key management, technical and scientific personnel and our ability to attract and retain additional qualified personnel and managers, including personnel with expertise in clinical trials, government regulation, manufacturing, marketing and other areas. Competition for qualified personnel is intense among companies, academic institutions and other organizations. If we are unable to attract and retain key personnel and advisors, it may negatively affect our ability to successfully develop, test, commercialize and market our products and product candidates.

We face intense and increasing competition and many of our competitors have significantly greater resources and experience.

If any of our competitors develop products with efficacy or safety profiles significantly better than our products, we may not be able to commercialize our products, and sales of any of our commercialized products could be harmed. Some of our competitors and potential competitors have substantially greater product development capabilities and financial, scientific,

marketing and human resources than we do. Competitors may develop products earlier, obtain FDA approvals for products more rapidly, or develop products that are more effective than those under development by us. We will seek to expand our technological capabilities to remain competitive; however, research and development by others may render our technologies or products obsolete or noncompetitive, or result in treatments or cures superior to ours.

Many other companies are pursuing other forms of treatment or prevention for diseases that we target. For example, many of our competitors are working on developing and testing H5N1, H1N1 and universal influenza vaccines, and several H1N1 vaccines developed by our competitors have been approved for human use. Our competitors and potential competitors include large pharmaceutical and medical device companies and more established biotechnology companies. These companies have significantly greater financial and other resources and greater expertise than us in research and development, securing government contracts and grants to support research and development efforts, manufacturing, pre-clinical and clinical testing, obtaining regulatory approvals and marketing. This may make it easier for them to respond more quickly than us to new or changing opportunities, technologies or market needs. Many of these competitors operate large, well-funded research and development programs and have significant products approved or in development. Small companies may also prove to be significant competitors, particularly through collaborative arrangements with large pharmaceutical companies or through acquisition or development of intellectual property rights. Our potential competitors also include academic institutions, governmental agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for product and clinical development and marketing. Research and development by others may seek to render our technologies or products obsolete or noncompetitive.

If we lose or are unable to secure collaborators or partners, or if our collaborators or partners do not apply adequate resources to their relationships with us, our product development and potential for profitability will suffer.

We have entered into, or may enter into, distribution, co-promotion, partnership, sponsored research and other arrangements for development, manufacturing, sales, marketing and other commercialization activities relating to our products. For example, in the past we have entered into license and collaboration agreements. The amount and timing of resources applied by our collaborators are largely outside of our control.

If any of our current or future collaborators breaches or terminates our agreements, or fails to conduct our collaborative activities in a timely manner, our commercialization of products could be diminished or blocked completely. We may not receive any event-based payments, milestone payments or royalty payments under our collaborative agreements if our collaborative partners fail to develop products in a timely manner or at all. It is possible that collaborators will change their strategic focus, pursue alternative technologies or develop alternative products, either on their own or in collaboration with others. Further, we may be forced to fund programs that were previously funded by our collaborators, and we may not have, or be able to access, the necessary funding. The effectiveness of our partners, if any, in marketing our products will also affect our revenues and earnings.

We desire to enter into new collaborative agreements. However, we may not be able to successfully negotiate any additional collaborative arrangements and, if established, these relationships may not be scientifically or commercially successful. Our success in the future depends in part on our ability to enter into agreements with other highly-regarded organizations. This can be difficult due to internal and external constraints placed on these organizations. Some organizations may have insufficient administrative and related infrastructure to enable collaborations with many companies at once, which can extend the time it takes to develop, negotiate and implement a collaboration. Once news of discussions regarding possible collaborations are known in the medical community, regardless of whether the news is accurate, failure to announce a collaborative agreement or the entity's announcement of a collaboration with another entity may result in adverse speculation about us, resulting in harm to our reputation and our business.

Disputes could also arise between us and our existing or future collaborators, as to a variety of matters, including financial and intellectual property matters or other obligations under our agreements. These disputes could be both expensive and time-consuming and may result in delays in the development and commercialization of our products or could damage our relationship with a collaborator.

A small number of licensing partners and government contracts account for a substantial portion of our revenue.

We currently derive, and in the past we have derived, a significant portion of our revenue from a limited number of licensing partners and government grants and contracts. Revenue can fluctuate significantly depending on the timing of up-front and event-based payments and work performed. If we fail to sign additional future contracts with major licensing partners and the government, if a contract is delayed or deferred, or if an existing contract expires or is canceled and we fail to replace the contract with new business, our revenue would be adversely affected.

We have agreements with government agencies, which are subject to termination and uncertain future funding.

We have entered into agreements with government agencies, such as the NIAID and the US Army, and we intend to continue entering into these agreements in the future. Our business is partially dependent on the continued performance by these government agencies of their responsibilities under these agreements, including adequate continued funding of the agencies and their programs. We have no control over the resources and funding that government agencies may devote to these agreements, which may be subject to annual renewal and which generally may be terminated by the government agencies at any time.

Government agencies may fail to perform their responsibilities under these agreements, which may cause them to be terminated by the government agencies. In addition, we may fail to perform our responsibilities under these agreements. Many of our government agreements are subject to audits, which may occur several years after the period to which the audit relates. If an audit identifies significant unallowable costs, we could incur a material charge to our earnings or reduction in our cash position. As a result, we may be unsuccessful entering, or ineligible to enter, into future government agreements.

Our quarterly operating results may fluctuate significantly.

We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors, including:


•	variations in the level of expenses related to our electroporation equipment, product candidates or future development programs;


•	expenses related to corporate transactions, including ones not fully completed;


•	addition or termination of clinical trials or funding support;


•	any intellectual property infringement lawsuit in which we may become involved;


•	any legal claims that may be asserted against us or any of our officers;


•	regulatory developments affecting our electroporation equipment and product candidates or those of our competitors;


•	our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements; and


•	if any of our products receives regulatory approval, the levels of underlying demand for our products.

If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.

If we are unable to obtain FDA approval of our products, we will not be able to commercialize them in the United States.

We need FDA approval prior to marketing our electroporation equipment and products in the United States. If we fail to obtain FDA approval to market our electroporation equipment and product candidates, we will be unable to sell our products in the United States, which will significantly impair our ability to generate any revenues.

This regulatory review and approval process, which includes evaluation of pre-clinical studies and clinical trials of our products as well as the evaluation of our manufacturing processes and our third-party contract manufacturers' facilities, is lengthy, expensive and uncertain. To receive approval, we must, among other things, demonstrate with substantial evidence from well-controlled clinical trials that our electroporation equipment and product candidates are both safe and effective for each indication for which approval is sought. Satisfaction of the approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity and novelty of the product. We do not know if or when we might receive regulatory approvals for our electroporation equipment and any of our product candidates currently under development. Moreover, any approvals that we obtain may not cover all of the clinical indications for which we are seeking approval, or could contain significant limitations in the form of narrow indications, warnings, precautions or contra-indications with respect to conditions of use. In such event, our ability to generate revenues from such products would be greatly reduced and our business would be harmed.

The FDA has substantial discretion in the approval process and may either refuse to consider our application for substantive review or may form the opinion after review of our data that our application is insufficient to allow approval of our electroporation equipment and product candidates. If the FDA does not consider or approve our application, it may require that we conduct additional clinical, pre-clinical or manufacturing validation studies and submit that data before it will reconsider our application. Depending on the extent of these or any other studies, approval of any applications that we submit may be

delayed by several years, or may require us to expend more resources than we have available. It is also possible that additional studies, if performed and completed, may not be successful or considered sufficient by the FDA for approval or even to make our applications approvable. If any of these outcomes occur, we may be forced to abandon one or more of our applications for approval, which might significantly harm our business and prospects.

It is possible that none of our products or any product we may seek to develop in the future will ever obtain the appropriate regulatory approvals necessary for us or our collaborators to commence product sales. Any delay in obtaining, or an inability to obtain, applicable regulatory approvals would prevent us from commercializing our products, generating revenues and achieving and sustaining profitability.

Clinical trials involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

Clinical testing is expensive and can take many years to complete, and its outcome is uncertain. Failure can occur at any time during the clinical trial process. The results of pre-clinical studies and early clinical trials of our products may not be predictive of the results of later-stage clinical trials. Results from one study may not be reflected or supported by the results of similar studies. Results of an animal study may not be indicative of results achievable in human studies. Human-use equipment and product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through pre-clinical studies and initial clinical testing. The time required to obtain approval by the FDA and similar foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials, depending upon numerous factors. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change. We have not obtained regulatory approval for any human-use products.

Our products could fail to complete the clinical trial process for many reasons, including the following:


•	we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our electroporation equipment and a product candidate are safe and effective for any indication;


•	the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;


•	the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;


•	we may not be successful in having the FDA remove the clinical hold on our proposed phase III clinical program for VGX-3100


•	we may not be successful in enrolling a sufficient number of participants in clinical trials;


•	we may be unable to demonstrate that our electroporation equipment and a product candidate's clinical and other benefits outweigh its safety risks;


•	we may be unable to demonstrate that our electroporation equipment and a product candidate presents an advantage over existing therapies, or over placebo in any indications for which the FDA requires a placebo-controlled trial;


•	the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from pre-clinical studies or clinical trials;


•	the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a new drug application or other submission or to obtain regulatory approval in the United States or elsewhere;


•	the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of us or third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; and


•	the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Delays in the commencement or completion of clinical testing could result in increased costs to us and delay or limit our ability to generate revenues.

Delays in the commencement or completion of clinical testing could significantly affect our product development costs. We do not know whether planned clinical trials will begin on time or be completed on schedule, if at all. In addition, ongoing clinical trials may not be completed on schedule, or at all. The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:


•	obtaining regulatory approval to commence a clinical trial;


•	adverse results from third party clinical trials involving gene based therapies and the regulatory response thereto;


•	reaching agreement on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;


•	future bans or stricter standards imposed on gene based therapy clinical trials;


•	manufacturing sufficient quantities of our electroporation equipment and product candidates for use in clinical trials;


•	obtaining institutional review board, or IRB, approval to conduct a clinical trial at a prospective site;


•	slower than expected recruitment and enrollment of patients to participate in clinical trials for a variety of reasons, including competition from other clinical trial programs for similar indications;


•	conducting clinical trials with sites internationally due to regulatory approvals and meeting international standards;


•	retaining patients who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack of efficacy or personal issues, or who are lost to further follow-up;


•	collecting, reviewing and analyzing our clinical trial data; and


•	global unrest, terrorist activities, and economic and other external factors.

Clinical trials may also be delayed as a result of ambiguous or negative interim results. In addition, a clinical trial may be suspended or terminated by us, the FDA, the IRB overseeing the clinical trial at issue, any of our clinical trial sites with respect to that site, or other regulatory authorities due to a number of factors, including:


•	failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;


•	inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;


•	unforeseen safety issues; and


•	lack of adequate funding to continue the clinical trial.

If we experience delays in completion of, or if we terminate, any of our clinical trials, the commercial prospects for our electroporation equipment and our product candidates may be harmed and our ability to generate product revenues will be delayed. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. Further, delays in the commencement or completion of clinical trials may adversely affect the trading price of our common stock.

We and our collaborators rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we and our collaborators may not be able to obtain regulatory approval for or commercialize our product candidates.

We and our collaborators have entered into agreements with CROs to provide monitors for and to manage data for our on-going clinical programs. We and the CROs conducting clinical trials for our electroporation equipment and product candidates are required to comply with current good clinical practices, or GCPs, regulations and guidelines enforced by the FDA for all of our products in clinical development. The FDA enforces GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or the CROs conducting clinical trials of our product candidates fail to comply with applicable GCPs, the clinical data generated in the clinical trials may be deemed unreliable and the FDA may require additional clinical trials before approving any marketing applications.

If any relationships with CROs terminate, we or our collaborators may not be able to enter into arrangements with alternative CROs. In addition, these third-party CROs are not our employees, and we cannot control whether or not they devote sufficient time and resources to our on-going clinical programs or perform trials efficiently. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development activities, which could harm our competitive position. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. Cost overruns by or disputes with our CROs may significantly increase our expenses.

Even if our products receive regulatory approval, they may still face future development and regulatory difficulties.

Even if United States regulatory approval is obtained, the FDA may still impose significant restrictions on a product's indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies. This governmental oversight may be particularly strict with respect to gene based therapies. Our products will also be subject to ongoing FDA requirements governing the labeling, packaging, storage, advertising, promotion, record keeping and submission of safety and other post-market information. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with current good manufacturing practices, or cGMP, regulations. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturer or us, including requiring withdrawal of the product from the market or suspension of manufacturing. If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may:


•	issue Warning Letters or untitled letters;


•	impose civil or criminal penalties;


•	suspend regulatory approval;


•	suspend any ongoing clinical trials;


•	refuse to approve pending applications or supplements to applications filed by us;


•	impose restrictions on operations, including costly new manufacturing requirements; or


•	seize or detain products or require us to initiate a product recall.

Even if our products receive regulatory approval in the United States, we may never receive approval or commercialize our products outside of the United States.

In order to market any electroporation equipment and product candidates outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among countries and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries might differ from that required to obtain FDA approval. The regulatory approval process in other countries may include all of the risks detailed above regarding FDA approval in the United States as well as other risks. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. Failure to obtain regulatory approval in other countries or any delay or setback in obtaining such approval could have the same adverse effects detailed above regarding FDA approval in the United States. Such effects include the risks that our product candidates may not be approved for all indications requested, which could limit the uses of our product candidates and have an adverse effect on their commercial potential or require costly, post-marketing follow-up studies.

We face potential product liability exposure and, if successful claims are brought against us, we may incur substantial liability.

The use of our electroporation equipment and synthetic vaccine candidates in clinical trials and the sale of any products for which we obtain marketing approval expose us to the risk of product liability claims. Product liability claims might be brought against us by consumers, health care providers, pharmaceutical companies or others selling or otherwise coming into contact with our products. For example, pharmaceutical companies have been subject to claims that the use of some pediatric vaccines has caused personal injuries, including brain damage, central nervous system damage and autism, and these companies have incurred material costs to defend these claims. If we cannot successfully defend ourselves against product liability claims, we could incur substantial liabilities. In addition, regardless of merit or eventual outcome, product liability claims may result in:


•	decreased demand for our product candidates;


•	impairment of our business reputation;


•	withdrawal of clinical trial participants;


•	costs of related litigation;


•	distraction of management's attention from our primary business;


•	substantial monetary awards to patients or other claimants;


•	loss of revenues; and


•	inability to commercialize our products.

We have obtained product liability insurance coverage for our clinical trials, but our insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. On occasion, large judgments have been awarded in class action lawsuits based on products that had unanticipated side effects. A successful product liability claim or series of claims brought against us could cause our stock price to decline and, if judgments exceed our insurance coverage, could adversely affect our business.

We currently have no marketing and sales organization. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenues.

We currently do not have a sales organization for the marketing, sales and distribution of our electroporation equipment and product candidates. In order to commercialize any products, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. We contemplate establishing our own sales force or seeking third-party partners to sell our products. The establishment and development of our own sales force to market any products we may develop will be expensive and time consuming and could delay any product launch, and we may not be able to successfully develop this capability. We will also have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel. To the extent we rely on third parties to commercialize our approved products, if any, we will receive lower revenues than if we commercialized these products ourselves. In addition, we may have little or no control over the sales efforts of third parties involved in our commercialization efforts. In the event we are unable to develop our own marketing and sales force or collaborate with a third-party marketing and sales organization, we would not be able to commercialize our product candidates which would negatively impact our ability to generate product revenues.

If any of our products for which we receive regulatory approval does not achieve broad market acceptance, the revenues that we generate from their sales will be limited.

The commercial success of our electroporation equipment and product candidates for which we obtain marketing approval from the FDA or other regulatory authorities will depend upon the acceptance of these products by both the medical community and patient population. Coverage and reimbursement of our product candidates by third-party payors, including government payors, generally is also necessary for optimal commercial success. The degree of market acceptance of any of our approved products will depend on a number of factors, including:


•	our ability to provide acceptable evidence of safety and efficacy;


•	the relative convenience and ease of administration;


•


•	the prevalence and severity of any actual or perceived adverse side effects;


•	limitations or warnings contained in a product's FDA-approved labeling, including, for example, potential “black box” warnings


•	availability of alternative treatments;


•	pricing and cost effectiveness;


•	the effectiveness of our or any future collaborators' sales and marketing strategies;


•	our ability to obtain sufficient third-party coverage or reimbursement; and


•	the willingness of patients to pay out of pocket in the absence of third-party coverage.

If our electroporation equipment and product candidates are approved but do not achieve an adequate level of acceptance by physicians, health care payors and patients, we may not generate sufficient revenue from these products, and we may not become or remain profitable. In addition, our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful.

We are subject to uncertainty relating to reimbursement policies which, if not favorable to our product candidates, could hinder or prevent our products' commercial success.

Our ability to commercialize our electroporation equipment and product candidates successfully will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors establish appropriate coverage and reimbursement levels for our product candidates and related treatments. As a threshold for coverage and reimbursement, third-party payors generally require that drug products have been approved for marketing by the FDA. Third-party payors also are increasingly challenging the effectiveness of and prices charged for medical products and services. We may not be able to obtain third-party coverage or reimbursement for our products in whole or in part.

Healthcare reform measures could hinder or prevent our products' commercial success.

In both the United States and certain foreign jurisdictions there have been, and we anticipate there will continue to be, a number of legislative and regulatory changes to the healthcare system that could impact our ability to sell any of our products profitably. In the United States, the Federal government passed healthcare reform legislation, the Patient Protection and Affordable Care Act, or the ACA. The provisions of the ACA have become or will become effective on various dates. While many of the details regarding the implementation of the ACA are yet to be determined, we believe there will be continuing trends towards expanding coverage to more individuals, containing health care costs and improving quality. At the same time, the rebates, discounts, taxes and other costs associated with the ACA are expected to be a significant cost to the pharmaceutical industry.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to make and implement healthcare reforms may adversely affect:


•	our ability to set a price we believe is fair for our products;


•	our ability to generate revenues and achieve or maintain profitability;


•	the availability of capital; and


•	our ability to obtain timely approval of our products.

If we fail to comply with applicable healthcare regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

Certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients' rights may be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business, without limitation. The laws that may affect our ability to operate include:

•

the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, people from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;


•	federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;


•	the ACA expands the government's investigative and enforcement authority and increases the penalties for fraud and abuse, including amendments to both the False Claims Act and the Anti-Kickback Statute to make it easier to bring suit under those statutes;


•


•	the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;


•	the Federal Food, Drug, and Cosmetic Act, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and

•

state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Additionally, the compliance environment is changing, with more states, such as California and Massachusetts, mandating implementation of compliance programs, compliance with industry ethics codes, and spending limits, and other states, such as Vermont, Maine, and Minnesota requiring reporting to state governments of gifts, compensation, and other remuneration to physicians. Under the ACA, pharmaceutical companies are required to record any transfers of value made to doctors and teaching hospitals and to disclose such data to HHS. These laws all provide for penalties for non-compliance. The shifting regulatory environment, along with the requirement to comply with multiple jurisdictions with different compliance and/or reporting requirements, increases the possibility that a company may run afoul of one or more laws.

If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or

restructuring of our operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management's attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

If we and the contract manufacturers upon whom we rely fail to produce our systems and product candidates in the volumes that we require on a timely basis, or fail to comply with stringent regulations, we may face delays in the development and commercialization of our electroporation equipment and product candidates.

We manufacture some components of our electroporation systems and utilize the services of contract manufacturers to manufacture the remaining components of these systems and our product supplies for clinical trials. The manufacture of our systems and product supplies requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers often encounter difficulties in production, particularly in scaling up for commercial production. These problems include difficulties with production costs and yields, quality control, including stability of the equipment and product candidates and quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. If we or our manufacturers were to encounter any of these difficulties or our manufacturers otherwise fail to comply with their obligations to us, our ability to provide our electroporation equipment to our partners and products to patients in our clinical trials or to commercially launch a product would be jeopardized. Any delay or interruption in the supply of clinical trial supplies could delay the completion of our clinical trials, increase the costs associated with maintaining our clinical trial program and, depending upon the period of delay, require us to commence new trials at significant additional expense or terminate the trials completely.

In addition, all manufacturers of our products must comply with cGMP requirements enforced by the FDA through its facilities inspection program. These requirements include, among other things, quality control, quality assurance and the generation and maintenance of records and documentation. Manufacturers of our products may be unable to comply with these cGMP requirements and with other FDA, state and foreign regulatory requirements. We have little control over our manufacturers' compliance with these regulations and standards. A failure to comply with these requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure or recall, or withdrawal of product approval. If the safety of any product is compromised due to our or our manufacturers' failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for or successfully commercialize our products, and we may be held liable for any injuries sustained as a result. Any of these factors could cause a delay of clinical trials, regulatory submissions, approvals or commercialization of our products, entail higher costs or result in our being unable to effectively commercialize our products. Furthermore, if our manufacturers fail to deliver the required commercial quantities on a timely basis, pursuant to provided specifications and at commercially reasonable prices, we may be unable to meet demand for our products and would lose potential revenues.

Our failure to successfully acquire, develop and market additional product candidates or approved products would impair our ability to grow.

We may acquire, in-license, develop and/or market additional products and product candidates. The success of these actions depends partly upon our ability to identify, select and acquire promising product candidates and products.

The process of proposing, negotiating and implementing a license or acquisition of a product candidate or approved product is lengthy and complex. Other companies, including some with substantially greater financial, marketing and sales resources, may compete with us for the license or acquisition of product candidates and approved products. We have limited resources to identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into our current infrastructure. Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts. We may not be able to acquire the rights to additional product candidates on terms that we find acceptable, or at all.

In addition, future acquisitions may entail numerous operational and financial risks, including:


•	exposure to unknown liabilities;


•	disruption of our business and diversion of our management's time and attention to develop acquired products or technologies;


•	incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions;


•	higher than expected acquisition and integration costs;


•	increased amortization expenses;


•	difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;


•	impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and


•	inability to retain key employees of any acquired businesses.

Further, any product candidate that we acquire may require additional development efforts prior to commercial sale, including extensive clinical testing and approval by the FDA and applicable foreign regulatory authorities. All product candidates are prone to risks of failure typical of product development, including the possibility that a product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities.

Our business involves the use of hazardous materials and we and our third-party manufacturers must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our and our third-party manufacturers' activities involve the controlled storage, use and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds. We and our manufacturers are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. In the event of an accident, state or federal authorities may curtail the use of these materials and interrupt our business operations. If we are subject to any liability as a result of our or our third-party manufacturers' activities involving hazardous materials, our business and financial condition may be adversely affected.

We may be subject to stockholder litigation, which would harm our business and financial condition.

We may have actions brought against us by stockholders relating to past transactions, changes in our stock price or other matters. Any such actions could give rise to substantial damages, and thereby have a material adverse effect on our consolidated financial position, liquidity, or results of operations. Even if an action is not resolved against us, the uncertainty and expense associated with stockholder actions could harm our business, financial condition and reputation. Litigation can be costly, time-consuming and disruptive to business operations. The defense of lawsuits could also result in diversion of our management's time and attention away from business operations, which could harm our business.

Our results of operations and liquidity needs could be materially affected by market fluctuations and general economic conditions.

Our results of operations could be materially affected by economic conditions generally, both in the United States and elsewhere around the world. Concerns over inflation, energy costs, geopolitical issues and the availability and cost of credit have contributed to increased volatility and diminished expectations for the economy and the markets going forward. These factors, combined with volatile oil prices, declining business and consumer confidence and increased unemployment, have precipitated an economic recession. Domestic and international capital markets have also been experiencing heightened volatility and turmoil. These events and the continuing market upheavals may have an adverse effect on us. In the event of a continuing market downturn, our results of operations could be adversely affected. Our future cost of equity or debt capital and access to the capital markets could be adversely affected, and our stock price could decline. There may be disruption in or delay in the performance of our third-party contractors and suppliers. If our contractors, suppliers and partners are unable to satisfy their contractual commitments, our business could suffer. In addition, we maintain significant amounts of cash and cash equivalents at one or more financial institutions that are in excess of federally insured limits. Given the current instability of financial institutions, we may experience losses on these deposits.

Risks Related to Our Intellectual Property

It is difficult and costly to generate and protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.

Our commercial success will depend in part on obtaining and maintaining patent, trademark, trade secret, and other intellectual property protection relating to our electroporation equipment and product candidates, as well as successfully defending these intellectual property rights against third-party challenges.

The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. The laws and regulations regarding the breadth of claims allowed in biotechnology patents has evolved over recent years and continues to undergo review and revision, both in the United States. The biotechnology patent situation outside the United States can be even more uncertain depending on the country. Changes in either the patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be allowed or

enforced in our licensed patents, our patents or in third-party patents, nor can we predict the likelihood of our patents surviving a patent validity challenge.

The degree of future protection for our intellectual property rights is uncertain, because legal decision-making can be unpredictable, thereby often times resulting in limited protection, which may not adequately protect our rights or permit us to gain or keep our competitive advantage, or resulting in an invalid or unenforceable patent. For example:


•	we, or the parties from whom we have acquired or licensed patent rights, may not have been the first to file the underlying patent applications or the first to make the inventions covered by such patents;


•	the named inventors or co-inventors of patents or patent applications that we have licensed or acquired may be incorrect, which may give rise to inventorship and ownership challenges;


•	others may develop similar or alternative technologies, or duplicate any of our products or technologies that may not be covered by our patents, including design-arounds;


•	pending patent applications may not result in issued patents;


•	the issued patents covering our products and technologies may not provide us with any competitive advantages or have any commercial value;


•	the issued patents may be challenged and invalidated, or rendered unenforceable;


•	the issued patents may be subject to reexamination, which could result in a narrowing of the scope of claims or cancellation of claims found unpatentable;


•	we may not develop or acquire additional proprietary technologies that are patentable;


•	our trademarks may be invalid or subject to a third party's prior use; or


•	our ability to enforce our patent rights will depend on our ability to detect infringement, and litigation to enforce patent rights may not be pursued due to significant financial costs, diversion of resources, and unpredictability of a favorable result or ruling.

We depend, in part, on our licensors and collaborators to protect a portion of our intellectual property rights. In such cases, our licensors and collaborators may be primarily or wholly responsible for the maintenance of patents and prosecution of patent applications relating to important areas of our business. If any of these parties fail to adequately protect these products with issued patents, our business and prospects would be harmed significantly.

We also may rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our trade secrets to competitors. Enforcing a claim that a third-party entity illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

If we or our licensors fail to obtain or maintain patent protection or trade secret protection for our product candidates or our technologies, third parties could use our proprietary information, which could impair our ability to compete in the market and adversely affect our ability to generate revenues and attain profitability.

From time to time, U.S. and other policymakers have proposed reforming the patent laws and regulations of their countries. In September 2011 the America Invents Act (the Act) was signed into law. The Act changed the current “first-to-invent” system to a system that awards a patent to the “first-inventor-to-file” for an application for a patentable invention. The Act also created a procedure to challenge newly issued patents in the patent office via post-grant proceedings and new inter parties reexamination proceedings. These changes may make it easier for competitors to challenge our patents, which could result in increased competition and have a material adverse effect on our product sales, business and results of operations. The changes may also make it harder to challenge third-party patents and place greater importance on being the first inventor to file a patent application on an invention.

If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.

Other companies may have or may acquire intellectual property rights that could be enforced against us. If they do so, we may be required to alter our technologies, pay licensing fees or cease activities. If our products or technologies infringe the intellectual property rights of others, they could bring legal action against us or our licensors or collaborators claiming damages and seeking to enjoin any activities that they believe infringe their intellectual property rights.

Because patent applications can take many years to issue, and there is a period when the application remains undisclosed to the public, there may be currently pending applications unknown to us or reissue applications that may later result in issued patents upon which our products or technologies may infringe. There could also be existing patents of which we are unaware that our products or technologies may infringe. In addition, if third parties file patent applications or obtain patents claiming products or technologies also claimed by us in pending applications or issued patents, we may have to participate in interference or derivation proceedings in the United States Patent and Trademark Office to determine priority or derivation of the invention. If third parties file oppositions in foreign countries, we may also have to participate in opposition proceedings in foreign tribunals to defend the patentability of our filed foreign patent applications.

If a third party claims that we infringe its intellectual property rights, it could cause our business to suffer in a number of ways, including:


•	we may become involved in time-consuming and expensive litigation, even if the claim is without merit, the third party's patent is invalid or we have not infringed;


•	we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a third party's patent;


•	we may be enjoined by a court to stop making, selling or licensing our products or technologies without a license from a patent holder, which may not be available on commercially acceptable terms, if at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; and


•	we may have to redesign our products so that they do not infringe upon others' patent rights, which may not be possible or could require substantial investment or time.

If any of these events occur, our business could suffer and the market price of our common stock may decline.

Risks Related to Our Common Stock

The price of our common stock is expected to be volatile and an investment in our common stock could decline substantially in value.

In light of our small size and limited resources, as well as the uncertainties and risks that can affect our business and industry, our stock price is expected to be highly volatile and can be subject to substantial drops, with or even in the absence of news affecting our business. Period to period comparisons are not indicative of future performance. The following factors, in addition to the other risk factors described in this annual report, and the potentially low volume of trades in our common stock, may have a significant impact on the market price of our common stock, some of which are beyond our control:


•	developments concerning any research and development, clinical trials, manufacturing, and marketing efforts or collaborations;


•	fluctuating public or scientific interest in the potential for influenza pandemic or other applications for our vaccine or other product candidates;


•	our announcement of significant acquisitions, strategic collaborations, joint ventures or capital commitments;


•	fluctuations in our operating results


•	announcements of technological innovations;


•	new products or services that we or our competitors offer;


•	the initiation, conduct and/or outcome of intellectual property and/or litigation matters;


•	changes in financial or other estimates by securities analysts or other reviewers or evaluators of our business;


•	conditions or trends in bio-pharmaceutical or other healthcare industries;


•	regulatory developments in the United States and other countries;


•	negative perception of gene based therapy;


•	changes in the economic performance and/or market valuations of other biotechnology and medical device companies;


•	additions or departures of key personnel;


•	sales or other transactions involving our common stock;


•	changes in our capital structure;


•	sales or other transactions by executive officers or directors involving our common stock;


•	changes in accounting principles;


•	global unrest, terrorist activities, and economic and other external factors; and


•	catastrophic weather and/or global disease pandemics.

The stock market in general has recently experienced relatively large price and volume fluctuations. In particular, the market prices of securities of smaller biotechnology and medical device companies have experienced dramatic fluctuations that often have been unrelated or disproportionate to the operating results of these companies. Continued market fluctuations could result in extreme volatility in the price of the common stock, which could cause a decline in the value of the common stock. In addition, price volatility may increase if the trading volume of our common stock remains limited or declines.

Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control which could limit the market price of our common stock.

Our amended and restated certificate of incorporation contains provisions that could delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider favorable. Some of these provisions include:


•	the authority of our board of directors to issue shares of undesignated preferred stock and to determine the rights, preferences and privileges of these shares, without stockholder approval;


•	all stockholder actions must be effected at a duly called meeting of stockholders and not by written consent; and


•	the elimination of cumulative voting.

In addition, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors, including to delay or impede a merger, tender offer or proxy contest involving our company. Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.

We have never paid cash dividends on our common stock and we do not anticipate paying dividends in the foreseeable future.

We have paid no cash dividends on our common stock to date, and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of any future debt or credit facility may preclude or limit our ability to pay any dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of potential gain for the foreseeable future.

The market price for our shares may not maintain their pre-reverse stock split market price.

On June 5, 2014, we effectuated a 4-for-1 reverse split of the Company's outstanding common stock. We cannot be certain that the reverse split will have a long-term positive effect on the market price of our common stock, or increase our ability to consummate financing arrangements in the future. The market price of our common stock is based on factors that may be unrelated to the number of shares outstanding. These factors include our performance, general economic and market conditions and other factors, many of which are beyond our control. The market price for our post-reverse stock split shares may not rise or remain constant in proportion to the reduction in the number of pre-split shares outstanding before the reverse split. Accordingly, the total market capitalization of our common stock after the reverse split may be lower than the total market capitalization before the reverse split.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Description of the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan

The Company’s wholly owned subsidiary, GENEOS Therapeutics, Inc. (“GTI”), has adopted the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (the “GTI Plan”) and related forms of stock option agreements. The purpose of the GTI Plan is to encourage participants to contribute materially to the growth of GTI, thereby benefiting its stockholders, and to align the economic interests of participants in the GTI Plan with those of its stockholders.

The GTI board of directors administers the GTI Plan, which may delegate authority to a committee consisting of members of the GTI board of directors. Generally, all employees, directors and consultants of GTI or of any present or future parent or subsidiary corporations of GTI are eligible to participate in the GTI Plan. Any person eligible under the GTI Plan may be granted a nonqualified stock option. However, only employees may be granted incentive stock options. The GTI board of directors or the committee of the board will specify when options granted under the GTI Plan will become exercisable and vested. Shares of GTI common stock subject to options generally vest and become exercisable in installments, subject to the optionee’s continued employment or service or achievement of specified milestones.

The GTI Plan provides for the grant of incentive stock options under the Internal Revenue Code, nonqualified stock options and stock awards. The maximum number of shares of GTI common stock available for issuance over the term of the GTI Plan may not exceed 2,000,000 shares, all of which may be granted as incentive stock options. If GTI effects a public offering, the maximum aggregate number of shares of GTI common stock that may be subject to grants to any individual during any calendar year will be 1,000,000 shares.

If there is any change in the number or kind of shares of GTI common stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation, (iii) by reason of a reclassification or change in par value, or (iv) by reason of any other extraordinary or unusual event affecting the outstanding GTI common stock as a class without GTI’s receipt of consideration, or if the value of outstanding shares of GTI common stock is substantially reduced as a result of a spinoff or GTI’s payment of an extraordinary dividend or distribution, the maximum number of shares of GTI common stock available for grants, the maximum number of shares of GTI common stock that any individual participating in GTI Plan may be granted in any year, the number of shares covered by outstanding grants, the kind of shares issued under the GTI Plan, and the price per share of such grants will be appropriately adjusted by the GTI board of directors to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of GTI common stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under such grants.

Each award granted under the GTI Plan will be evidenced by a written agreement between GTI and the participant specifying the number of shares subject to the award and the other terms and conditions of the award, consistent with the requirements of the GTI Plan. The purchase price per share subject to an option must equal at least the fair market value of a share of GTI’s common stock on the date of grant. The purchase price of any incentive stock option granted to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of GTI or any parent or subsidiary corporation of GTI, referred to as a 10% Stockholder, must be at least 110% of the fair market value of a share of GTI’s common stock on the date of grant. The term of any award under the GTI Plan may not be for more than ten years or five years in the case of incentive stock options awarded to any 10% Stockholder. To the extent that the aggregate fair market value of shares of GTI’s common stock subject to options designated as incentive stock options that become exercisable for the first time by a participant during any calendar year exceeds $100,000, such excess options shall be treated as nonqualified stock options.

Generally, an option’s purchase price may be paid in cash, by check, or in cash equivalent, by tender of shares of GTI’s common stock owned by the optionee having a fair market value not less than the exercise price, or by any lawful method approved by the GTI board of directors or by any combination of these.

The shares of GTI common stock issuable under the GTI Plan are subject to a right of first refusal if the participant desires to transfer any such shares, and GTI has the right to repurchase at fair market value any shares of GTI common stock distributed to a participant if the participant ceases to be employed by, or provide service to, GTI.

Upon a change of control, as defined in the GTI Plan, where GTI is not the surviving corporation, unless the GTI board of directors determines otherwise, all outstanding options will be assumed by or replaced with comparable options by the surviving corporation and outstanding stock awards will be converted into stock awards of the surviving corporation, or the GTI board of directors may take any of the other actions specified in the GTI Plan.

Unless sooner terminated, no awards may be granted under the GTI Plan after August 17, 2026. The GTI board of directors may terminate or amend the GTI Plan at any time, but, no amendment may adversely affect an outstanding award without the consent of the participant.

A copy of the GTI Plan is being filed as an exhibit to this Form 10-Q report, and the foregoing summary of the GTI Plan does not purport to be complete and is qualified in its entirety by reference to such exhibit.

ITEM 6. EXHIBITS

(a) Exhibits



Exhibit Number		Description of Document

10.1		Office Lease Agreement dated October 10, 2016 by and between 6759 Mesa Ridge Road Holdings, LLC and Inovio Pharmaceuticals, Inc. (filed herewith).

10.2		GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (filed herewith).

10.3		Form of Incentive Stock Option Agreement under the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (filed herewith).

10.4		Form of Employee Non-Qualified Stock Option Agreement under the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (filed herewith).

10.5		Form of Outside Director Non-Qualified Stock Option Agreement under the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (filed herewith).

10.6		Form of Restricted Stock Agreement under the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (filed herewith).

31.1		Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

Table of Contents



*	This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

INOVIO PHARMACEUTICALS, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		Inovio Pharmaceuticals, Inc.

Date:	November 8, 2016	By	/s/ J. J OSEPH K IM
			J. Joseph Kim President, Chief Executive Officer and Director (Principal Executive Officer)

Date:	November 8, 2016	By	/s/ PETER KIES
			Peter Kies Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 10.1

OFFICE LEASE AGREEMENT

SUMMIT RIDGE BUSINESS PARK
6759, 6769 and 6779 Mesa Ridge Road

San Diego, California 92121

TABLE OF CONTENTS



ARTICLE 1. SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND EXHIBITS	1
ARTICLE 2. PREMISES/RIGHT TO USE COMMON AREAS	4
ARTICLE 3. TERM	5
ARTICLE 4. MINIMUM MONTHLY RENT	5
ARTICLE 5. ADDITIONAL RENT	6
ARTICLE 6. PARKING	7
ARTICLE 7. RENT TAX AND PERSONAL PROPERTY TAXES	7
ARTICLE 8. PAYMENT OF RENT/LATE CHARGES/INTEREST ON PAST-DUE OBLIGATIONS	8
ARTICLE 9. SECURITY DEPOSIT	8
ARTICLE 10. CONSTRUCTION OF THE PREMISES	8
ARTICLE 11. ALTERATIONS	9
ARTICLE 12. PERSONAL PROPERTY/SURRENDER OF PREMISES	11
ARTICLE 13. LIENS	11
ARTICLE 14. USE OF PREMISES/RULES AND REGULATIONS	11
ARTICLE 15. RIGHTS RESERVED BY LANDLORD	13
ARTICLE 16. QUIET ENJOYMENT	13
ARTICLE 17. MAINTENANCE AND REPAIR	13
ARTICLE 18. UTILITIES AND JANITORIAL SERVICES	14
ARTICLE 19. ENTRY AND INSPECTION	15
ARTICLE 20. ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE	15
ARTICLE 21. CASUALTY INSURANCE	16
ARTICLE 22. DAMAGE AND DESTRUCTION OF PREMISES	16
ARTICLE 23. EMINENT DOMAIN	17
ARTICLE 24. ASSIGNMENT AND SUBLETTING	18
ARTICLE 25. SALE OF PREMISES BY LANDLORD	19
ARTICLE 26. SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT	19
ARTICLE 27. LANDLORD'S DEFAULT AND RIGHT TO CURE	19
ARTICLE 28. ESTOPPEL CERTIFICATES	19
ARTICLE 29. TENANT'S DEFAULT AND LANDLORD'S REMEDIES	20
ARTICLE 30. TENANT'S RECOURSE	23
ARTICLE 31. HOLDING OVER	23
ARTICLE 32. GENERAL PROVISIONS	23
ARTICLE 33. NOTICES	26
ARTICLE 34. BROKER'S COMMISSIONS	26
ARTICLE 35. INDEMNIFICATION/WAIVER OF SUBROGATION	26
ARTICLE 36. WAIVERS	27
ARTICLE 37. DISCLOSURE REGARDING PREMISES	28
ARTICLE 38. COMPLIANCE WITH ADA	28
ARTICLE 39. SECURITY SYSTEM	28

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC.

EXHIBITS :



(A)	LAND
(A-1)	PREMISES
(B)	RULES AND REGULATIONS
(C)	PARKING RULES AND REGULATIONS
(D)	TENANT IMPROVEMENTS
(E)	CONFIRMATION OF COMMENCEMENT DATE
(F)	MOISTURE AND MOLD CONTROL INSTRUCTIONS
(G)	RENEWAL OPTION
(H)	EARLY TERMINATION OPTION
(I)	ROOF ACCESS; COMMUNICATIONS EQUIPMENT
(J)	OPERATING COST EXCLUSIONS

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC.

OFFICE LEASE AGREEMENT

__________________________________

SUMMIT RIDGE BUSINESS PARK

6759, 6769 and 6779 Mesa Ridge Road

San Diego, California 92121

__________________________________

THIS OFFICE LEASE AGREEMENT , dated as of October 10, 2016 (the “ Effective Date ”), is made and entered into by and between 6759 MESA RIDGE ROAD HOLDINGS, LLC , a Maryland limited liability company, a Maryland limited liability company (" Landlord "), and INOVIO PHARMACEUTICALS, INC. , a Delaware corporation (" Tenant "). In consideration of the mutual promises and representations set forth in this Lease, Landlord and Tenant agree as follows:

Article 1. SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND EXHIBITS


1.1	The following terms and provisions of this Lease, as modified by other terms and provisions hereof, are included in this Section 1.1 for summary and definitional purposes only. If there is any conflict or inconsistency between any term or provision in this Section 1.1 and any other term or provision of this Lease, the other term or provision of this Lease shall control:


(a)	Address of Landlord for Notices : c/o CWCapital Asset Management LLC

5215 North O'Connor Blvd., Suite 350
Irving, Texas 75039

Attention: Thomas Shearer


(b)	Address of Tenant for Notices : Prior to the Commencement Date:

Inovio Pharmaceuticals, Inc.
660 W. Germantown Pike, Suite 110

Plymouth Meeting, Pennsylvania 19462

Attention: Thomas Kim

After the Commencement Date:

The Premises

(c)

Lease Term : One hundred twenty (120) months, plus the remainder of any partial calendar month in which the Lease Term commences, commencing on the earlier of (i) June 1, 2017, or (ii) the date Tenant opens for business in the Premises (the " Commencement Date "), and expiring at midnight on the date that is one hundred twenty (120) full calendar months from the Commencement Date (the “ Expiration Date ”).


(d)	Building : The office building located at 6769 Mesa Ridge Road, San Diego, California (the " Building ") upon the land more particularly described on Exhibit A attached hereto (the “ Land ”).

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 1

(e)

Premises : The entire Building, consisting of approximately 34,896 Rentable Square Feet on the first (1 ^st ) floor of the Building (the “ First Floor Space ”) and approximately 16,124 Rentable Square Feet on the second (2 ^nd ) floor of the Building (the “ Second Floor Space ”), for a total of 51,020 Rentable Square Feet depicted on Exhibit A-1 attached hereto. Landlord agrees that, within thirty (30) days after the Effective Date, Tenant may engage a certified architect mutually acceptable to Landlord and Tenant to confirm and certify to Landlord and Tenant the square footage of the First Floor Space, the Second Floor Space and the Building in accordance with the American National Standard Method of Measuring Floor Area in Industrial Buildings, ANSI Z65.2-2012, published by the Building Owners and Managers Association International (BOMA Standards). Such measurement shall be binding upon the parties, and if the measurement of the Building is other than 51,020 Rentable Square Feet, Minimum Rent, Tenant’s Share, the First Floor Allowance, and the Second Floor Allowance will be adjusted accordingly by written amendment between Landlord and Tenant. Tenant shall pay Landlord’s legal fees and expenses with respect to any such amendment.


(f)	Minimum Monthly Rent :

First Floor Space:



MONTHS OF LEASE TERM	MONTHLY RENT RATE PSF	MINIMUM MONTHLY RENT
1	$1.40	$48,854.40
2 – 7	Abated	Abated*
8 – 12	$1.40	$48,854.40
13 – 24	$1.45	$50,599.20
25 – 36	$1.49	$51,995.04
37 – 48	$1.54	$53,739.84
49 – 60	$1.59	$55,484.64
61 – 72	$1.64	$57,229.44
73 – 84	$1.70	$59,323.20
85 – 96	$1.75	$61,068.00
97 – 108	$1.81	$63,161.76
109 - 120	$1.87	$65,255.52

(plus any applicable Rent Tax for each full calendar month of the Lease Term)

*Minimum Monthly Rent only for the First Floor Space is abated during the Months 2 – 7 months of the Lease Term as shown above (the “ First Floor Abatement ”), which First Floor Abatement is valued at $293,126.40. The First Floor Abatement is conditioned upon Tenant’s full and timely performance of all of its obligations under the Lease. If at any time during the Lease Term a

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 2

monetary Event of Default by Tenant occurs, then the First Floor Abatement shall automatically be deemed void effective as of the Effective Date, and Tenant shall promptly pay to Landlord, in addition to all other amounts due to Landlord under the Lease (and without waiver of Landlord’s other rights and remedies for a monetary default under the Lease), the full amount of the First Floor Abatement received by Tenant plus interest at the rate of ten percent (10%) per annum (or if less, the highest rate permitted by applicable law). The First Floor Abatement shall automatically be deemed as terminated one (1) day prior to the filing of a petition by or against Tenant: (1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal debtor relief law; or (3) for the appointment of a liquidator or receiver for all or substantially all of Tenant’s property or for Tenant’s interest in the Lease.

Second Floor Space:



MONTHS OF LEASE TERM	MONTHLY RENT RATE PSF	MINIMUM MONTHLY RENT
1 – 24	Abated	Abated*
25 – 36	$1.49	$24,024.76
37 – 48	$1.54	$24,830.96
49 – 60	$1.59	$25,637.16
61 – 72	$1.64	$26,443.36
73 – 84	$1.70	$27,410.80
85 – 96	$1.75	$28,217.00
97 – 108	$1.81	$29,184.44
109 - 120	$1.87	$30,151.88

(plus any applicable Rent Tax for each full calendar month of the Lease Term)

*Minimum Monthly Rent only for the Second Floor Space is abated during the Months 1 – 24 months of the Lease Term as shown above (the “ Second Floor Abatement ”), which Second Floor Abatement is valued at $551,440.80. The Second Floor Abatement is conditioned upon Tenant’s full and timely performance of all of its obligations under the Lease. If at any time during the Lease Term a monetary Event of Default by Tenant occurs, then the Second Floor Abatement shall automatically be deemed void effective as of the Effective Date, and Tenant shall promptly pay to Landlord, in addition to all other amounts due to Landlord under the Lease (and without waiver of Landlord’s other rights and remedies for a monetary default under the Lease), the full amount of the Second Floor Abatement received by Tenant plus interest at the rate of ten percent (10%) per annum (or if less, the highest rate permitted by applicable law). The Second Floor Abatement shall automatically be deemed as terminated one (1) day prior to the filing of a petition by or against Tenant: (1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal debtor relief law; or (3) for the appointment of a liquidator or receiver for all or substantially all of Tenant’s property or for Tenant’s interest in the Lease.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 3


(g)	Security Deposit : A Security Deposit of $95,407.40 is required and shall be deposited with Landlord at the time this Lease is signed by Tenant.


(h)	Parking : Landlord shall provide Tenant with a parking ratio of 3.2 unreserved parking stalls per 1,000 Rentable Square Footage of the Premises (111 parking stalls), free of charge for the initial Lease Term. Parking for such stalls shall be on a first-come, first-served basis.


1.2	The following exhibits (the " Exhibits ") and addenda are attached hereto and incorporated herein by this reference:


Exhibit A	Land


Exhibit A-1	Premises


Exhibit B	Rules and Regulations


Exhibit C	Parking Rules and Regulations


Exhibit D	Tenant Improvements


Exhibit E	Confirmation of Commencement Date


Exhibit F	Moisture and Mold Control Instructions


Exhibit G	Renewal Option


Exhibit H	Early Termination Option


Exhibit I	Roof Access; Communications Equipment


Exhibit J	Operating Cost Exclusions

This Office Lease Agreement and the Exhibits are collectively referred to herein as this " Lease ."

ARTICLE 2. PREMISES/RIGHT TO USE COMMON AREAS

2.1

Landlord leases to Tenant and Tenant leases from Landlord the Premises, for and subject to the terms and provisions set forth in this Lease. This Lease is subject to all liens, encumbrances, parking and access easements, restrictions, covenants, and all other matters of record, the Rules and Regulations described in Article 14 and the Parking Rules and Regulations described in Article 6 . Tenant and Tenant's agents, contractors, customers, directors, employees, invitees, officers, and patrons (collectively, " Tenant's Permittees " and individually, a “ Tenant Permittee ”) have a non-exclusive privilege and license, during the Lease Term, to use the non-restricted Common Areas in common with all other authorized users thereof. Tenant shall have access to the Premises at all times, twenty-four (24) hours per day, every day of the year, subject to force majeure, such after-normal business hour security procedures as Landlord may reasonably require.


2.2	For purposes of this Lease, the following terms have the definitions set forth below:


(a)	" Automobile Parking Areas " means all areas designated by Landlord for automobile parking upon the Land. Automobile Parking Areas are Common Areas, but certain parking areas are restricted. (See Parking Rules & Regulations).

(b)

" Common Areas " means any part of the Project intended for the common use of all tenants, including parking areas, private streets and alleys, landscaping, curbs, loading areas, lighting facilities, public toilets, and the like. Landlord reserves the right to change from time to time the dimensions and location of the Common Area, as well as the dimensions, identities, locations and types of any buildings, signs or other improvements in the Project, provided Tenant’s access to and use of the Premises are not materially impaired by any such change.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 4


(c)	" Project " means the buildings located at 6759, 6769 and 6779 Mesa Ridge Road, San Diego, California and the parcel(s) of land containing said buildings, all known collectively as Summit Ridge Business Park.


(d)	" Rentable Square Footage " or “ Rentable Square Feet ” means, with respect to the Building, the sum of the total area of the Building, computed by measuring to the exterior surface of permanent outside walls.

ARTICLE 3. TERM

The Lease Term and the Commencement Date shall be as specified in Section 1.1 . Landlord agrees to permit Tenant to occupy of the Premises after the full execution of this Lease (" Early Occupancy ") for construction purposes in accordance with the terms of Exhibit D attached hereto so long as Tenant does not interfere with any work being performed by Landlord and provided that Landlord has received the Security Deposit, Advance Rental and proof that Tenant has obtained all insurance required under this Lease. The Early Occupancy shall be subject to all of the provisions of this Lease, except the payment of Minimum Monthly Rent and additional rent. By occupying the Premises, Tenant shall be deemed to have accepted the Premises in their condition as of the date of such occupancy, subject to the parties’ respective rights and obligations under Article 10 hereof. Prior to commencing to conduct business upon the Premises, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit E hereto confirming: (1) the Commencement Date (as defined in the Basic Lease Information) and the expiration date of the initial Term (as defined in the Basic Lease Information); (2) that Tenant has accepted the Premises; and (3) that Landlord has performed all of its obligations with respect to the Premises, if any; however, the failure of the parties to execute such letter shall not defer the Commencement Date or otherwise invalidate this Lease. Tenant's failure to execute such document within ten (10) days of receipt thereof from Landlord shall be a default by Tenant under this Lease and shall be deemed to constitute Tenant's agreement to the contents of such document.

Notwithstanding the foregoing, this Lease is contingent upon Tenant’s receipt of a Phase I Environmental Site Assessment (the “ Phase I ”) acceptable to Tenant. Within thirty (30) days after the Effective Date, Tenant shall engage EBI Consulting to prepare an updated Phase I for the Building. If Tenant is not satisfied with the results of the Phase I, then Tenant may terminate this Lease by providing Landlord written notice thereof on or before the thirtieth (30 ^th ) day after the Effective Date. In the event this Lease is so terminated, Landlord shall promptly refund any amounts paid by Tenant to Landlord. If Tenant does not terminate this Lease as provided above, this Lease shall continue with full force and effect. Landlord agrees to reimburse Tenant for the cost of the Phase I within thirty (30) days after receipt of Tenant's paid invoice therefor.

ARTICLE 4. MINIMUM MONTHLY RENT

Tenant shall pay to Landlord, without deduction, setoff, prior notice, or demand, the Minimum Monthly Rent, payable in advance on the first day of each calendar month during the Lease Term. If the Lease Term commences on a date other than the first day of a calendar month, the Minimum Monthly Rent for that month shall be prorated on a per diem basis and be paid to Landlord on or before the Commencement Date.

Concurrently with the execution of this Lease, Tenant shall pay to Landlord the first month’s rent for the First Floor Space in an amount equal to Forty-Eight Thousand Eight Hundred Fifty-Four and 40/100 Dollars (48,854.40) as “ Advance Rental .”

ARTICLE 5. ADDITIONAL RENT

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 5

Tenant shall pay as additional rent each year the amount of Tenant's Share of Operating Costs during each Operating Year of the Lease Term. “ Tenant’s Share ” means an amount equal to the product of the Rentable Square Footage of the Premises multiplied by the actual per square foot Operating Costs during the applicable Operating Year of the Lease Term. If the Lease Term begins or ends anytime other than the first or last day of an Operating Year, Operating Costs and the Tenant's Share thereof shall be prorated. Prior to the end of each Operating Year, Landlord shall provide Tenant with a written statement of Landlord's estimate of Operating Costs and the estimate of Tenant's Share (the “ Estimated Share ”) for the next succeeding Operating Year. Tenant shall pay Landlord, concurrently with each payment of the Minimum Monthly Rent for the next Operating Year, an amount equal to one-twelfth (1/12) of the amount of the Estimated Share. Landlord may, at any time, reasonably revise the Estimated Share and adjust the required monthly payment accordingly. Within ninety (90) days after the end of each Operating Year, or as soon thereafter as reasonably possible, Landlord shall provide Tenant with a statement showing Tenant's Share of the actual Operating Costs for the preceding Operating Year, together with reasonably detailed supporting calculations and background information related to the same (the " Actual Share "). If the Actual Share exceeds the Estimated Share paid by Tenant during that Operating Year, Tenant shall pay the excess at the time the next succeeding payment of Minimum Monthly Rent is payable (or within ten (10) days if the Lease Term has expired or been terminated). If the Actual Share is less than the Estimated Share paid by Tenant, Landlord shall apply such excess to payments next falling due under this Article (or refund the same to Tenant or credit amounts due from Tenant if the Lease Term has expired or been terminated). In the event the Building is not fully occupied during any Operating Year, an adjustment shall be made by Landlord in calculating the Operating Costs for such Operating Year so that the Operating Costs shall be adjusted to the amount that would have been incurred had the Building been fully occupied during such Operating Year. For purposes of this Lease (a) " Operating Costs " means and includes all costs of management, maintenance, and operation of the Project, including but not limited to the costs of cleaning, repairs, utilities, air conditioning, heating, plumbing, elevator, parking, landscaping, insurance, property taxes and special assessments, and all other costs which can properly be considered operating expenses but excluding the costs and expenses set forth in Exhibit J attached hereto; and (b) " Operating Year " means a year beginning January 1 and ending December 31. Tenants with leases expiring or terminating prior to the end of the Operating Year shall be responsible for their portion of Operating Costs based on Landlord's estimate of Operating Costs.

Notwithstanding the foregoing, for purposes of calculating the amount payable by Tenant under this Article 6 during the initial Lease Term only (excluding any renewal options), the Operating Costs (with the exception of Uncontrollable Expenses (defined below)) shall not exceed for any calendar year during the Lease Term, other than the first calendar year, the amount of Operating Costs for the preceding calendar year plus five percent (5.0%) (cumulative and compounded annually, in that any increases in the Operating Costs not recovered by Landlord due to the foregoing limitation shall be carried forward into all succeeding calendar years during the Lease Term (subject to the foregoing limitation) until fully recouped by Landlord). The term “ Uncontrollable Expenses ” means all taxes, all insurance costs, all expenses relating to the cost of utilities and other uncontrollable expenses as determined by Landlord in its commercially reasonable discretion.

Within sixty (60) days (the “ Audit Election Period ”) after Landlord furnishes to Tenant its Actual Share of Operating Costs for the preceding Operating Year, Tenant may, at its expense during Landlord’s normal business hours, elect to audit Landlord’s Operating Costs for the immediately preceding Operating Year only, subject to the following conditions: (1) there is no uncured Event of Default under this Lease; (2) the audit shall be prepared by an independent certified public accounting firm of recognized national standing; (3) in no event shall any audit be performed by a firm retained on a “contingency fee” basis; (4) the audit shall commence within thirty (30) days after Landlord makes Landlord’s books and records available to Tenant’s auditor and shall conclude within sixty (60) days after commencement; (5) the audit shall be conducted

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 6

where Landlord maintains its books and records and shall not unreasonably interfere with the conduct of Landlord’s business; and (6) Tenant and its accounting firm shall treat any audit in a confidential manner and shall each execute Landlord’s confidentiality agreement for Landlord’s benefit prior to commencing the audit. Tenant shall deliver a copy of such audit to Landlord within five (5) business days of receipt by Tenant. Notwithstanding the foregoing, Tenant shall have no right to conduct an audit if Landlord furnishes to Tenant an audit report for the Operating Year in question prepared by an independent certified public accounting firm of recognized national standing (whether originally prepared for Landlord or another party). This paragraph shall not be construed to limit, suspend, or abate Tenant’s obligation to pay all rent when due, including Tenant’s Estimated Share of Operating Costs. After verification, Landlord shall credit any overpayment determined by the audit report against the next rent due and owing by Tenant or, if no further rent is due, refund such overpayment directly to Tenant within thirty (30) days of determination. Likewise, Tenant shall pay Landlord any underpayment determined by the audit report within thirty (30) days of determination. The foregoing obligations shall survive the expiration or earlier termination of the Lease. If Tenant does not give written notice of its election to audit during the Audit Election Period, Landlord’s Operating Costs for the applicable Operating Year shall be deemed approved for all purposes, and Tenant shall have no further right to review or contest the same. If the audit proves that Landlord's calculation of Operating Costs for the Operating Year under inspection was overstated by more than five percent (5%) in the aggregate, then, after verification, Landlord shall pay Tenant's actual reasonable out-of-pocket audit and inspection fees applicable to the review of said Operating Year statement within thirty (30) days after receipt of Tenant's invoice therefor, not to exceed $1,000.00.

ARTICLE 6. PARKING

Tenant shall have the right to use the parking spaces identified in Section 1(h) hereof, which use shall be free of charge during the initial Lease Term. Nothing contained herein shall be deemed to create liability upon Landlord for any damage to motor vehicles of Tenant or Tenant's Permittees, or from loss of property from within such motor vehicles while parked in the Automobile Parking Areas. Landlord has the right to establish and to enforce against all users of the Automobile Parking Areas, reasonable rules and regulations (the " Parking Rules and Regulations ").

ARTICLE 7. RENT TAX AND PERSONAL PROPERTY TAXES

Tenant shall pay to Landlord, in addition to, and simultaneously with, any other amounts payable to Landlord under this Lease, a sum equal to the aggregate of any municipal, county, state, or federal excise, sales, use, or transaction privilege taxes now or hereafter legally levied or imposed against, or on account of, any amounts payable under this Lease by Tenant or the receipt thereof by Landlord (collectively, " Rent Tax "); provided, however, as of the Effective Date, no Rent Tax is being imposed by any governmental entity. Tenant shall pay, prior to delinquency, all taxes levied upon fixtures, furnishings, equipment, and personal property placed on the Premises by Tenant.

ARTICLE 8. PAYMENT OF RENT/LATE CHARGES/INTEREST ON PAST-DUE OBLIGATIONS

Tenant shall pay the rent and all other charges specified in this Lease to Landlord at the address set forth on Section 1.1 of this Lease, or to another person and at another address as Landlord from time to time designates in writing. All monetary obligations of Tenant, including Minimum Monthly Rent, additional rent, or other charges payable by Tenant to Landlord under the terms of this Lease shall be deemed " Rent ", and any Rent not received within ten (10) days after the due date (the " Delinquency Date ") thereof shall incur a late charge of five percent (5%) of the delinquent amount. Except as otherwise provided herein, any Rent due to Landlord not paid by the Delinquency Date shall bear interest, from the date due, at the maximum rate then allowable by law or judgments. Any such late charge and interest shall be payable as additional rent under this Lease,

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 7

shall not be considered a waiver by Landlord of any default by Tenant hereunder, and shall be payable immediately on demand; provided, however, that interest shall not be payable on late charges incurred by Tenant.

ARTICLE 9. SECURITY DEPOSIT

Tenant shall, upon execution of this Lease, deposit with Landlord the Security Deposit, as security for the performance of terms and provisions of this Lease by Tenant, which shall be returned to Tenant within the time period required by law if it has discharged its obligations to Landlord in full. The Security Deposit shall not be used to pay the last month's lease payment. Tenant hereby waives the protections of Section 1950.7(c) of the California Civil Code, as it may hereafter be amended, or similar laws of like import.

ARTICLE 10. CONSTRUCTION OF THE PREMISES

Tenant acknowledges that the Premises is located in an existing building. Except as otherwise set forth herein, Landlord makes no warranty or representation to Tenant concerning the condition of the Building, and Landlord shall promptly repair any defects in the Building provided Landlord is notified within six (6) months of the Delivery Date of any such defects). Except for defects as set forth in the immediately preceding sentence and the Systems Delivery set forth in the paragraph below, Tenant accepts the Premises in their current “AS-IS” condition and Landlord has no obligation to perform any work therein (including demolition of any improvements existing therein or construction of any tenant finish-work or other improvements therein). Furthermore, Landlord shall not be obligated to reimburse Tenant or provide an allowance for any costs related to the demolition or construction of improvements therein, except as expressly set forth in Exhibit D attached hereto.

Notwithstanding the foregoing, Landlord shall deliver (the “ Systems Delivery ”) the heating and air conditioning systems and equipment serving the Premises (the “ HVAC ”), plumbing, lighting, life safety and electrical systems serving the Premises in good working order and condition on the date Landlord delivers possession of the Premises to Tenant (the “ Delivery Date ”). If Tenant claims that such systems were not in good working order on the Delivery Date, Tenant must deliver written notice of such claim (the “ Failure Notice ”) to Landlord within ninety (90) days of the Delivery Date, time being of the essence in the giving of such notice, and Tenant’s sole remedy for such failure shall be that Landlord shall cause such systems to be placed in good working order at Landlord’s sole cost and expense. If Tenant fails to timely deliver a Failure Notice to Landlord, Landlord shall have no further obligations with respect to this provision. Notwithstanding anything to the contrary contained herein, Landlord shall have no obligation to repair the HVAC, plumbing, mechanical or electrical systems in the event the need for such repair is caused by Tenant or if Tenant fails to comply with Section 17.2 herein regarding Tenant’s obligation to maintain a HVAC maintenance contract.

Upon delivery of possession of the Premises by Landlord, Tenant will proceed with due diligence, at its own expense, to perform all work and supply all installations described as Tenant’s Work in Exhibit D (including without limitation obtaining any necessary permits for such Tenant’s Work), and to fully equip the Premises with all trade fixtures, lighting fixtures, furniture, furnishings, floor and wall coverings, exterior signs, and special equipment and other items of construction and personal property necessary for the completion of the Premises and the proper operation of Tenant’s business therein. Tenant’s Work shall be performed with materials of good quality and in a proper workmanlike manner, and, unless the Landlord gives its prior written consent otherwise, all items installed by Tenant in the Premises shall be new. Tenant shall not do any construction work or alterations, nor shall Tenant install any equipment other than trade fixtures and personal property without first obtaining Landlord’s written approval of the plans and specifications therefor in accordance with Exhibit D . The approval by Landlord of such plans and specifications shall not constitute

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the assumption of any liability on the part of the Landlord for their accuracy or their conformity with requirements of any building code, or other municipal or governmental regulation or ordinance, and Tenant shall be solely responsible for such plans and specifications and compliance of Tenant’s Work with all governmental requirements. Prior to commencement of any work upon the Premises by Tenant, Tenant shall deliver to Landlord a certificate of public liability and property damage insurance of a type and with the limits as shall be reasonably acceptable to Landlord, naming Landlord as additional insured, and evidence of Workman’s Compensation and Builder’s Risk coverage in such amounts as are required by law and are acceptable to Landlord. From and after the date of delivery of possession of the Premises, (i) Tenant shall observe and perform all of its obligations under this Lease, including without limitation, payment of all utility charges, but excluding its obligations to pay Minimum Monthly Rent and additional rent, which are payable from and after the Commencement Date, (ii) any entry by Tenant or work performed by Tenant or any fixtures or personal property moved onto the Premises shall be at Tenant's own risk, and (iii) neither Landlord nor Landlord's agents or contractors shall be responsible to Tenant for damage or destruction of Tenant's property unless such damage arises from the wrongful acts or omissions of Landlord, its employees, agents, consultants or contractors.

ARTICLE 11. ALTERATIONS

After completion of Tenant’s Work under Article 10 , Tenant shall not make or cause to be made any further additions, alterations, improvements, Utility Installations or repairs (collectively, “ Alterations ”) in, on or about the Premises, the Building or the Project without the prior written consent of Landlord, which shall not be unreasonably withheld or delayed. As used in this Article, the term " Utility Installation " shall mean carpeting, window and wall coverings, power panels, electrical distribution systems, lighting fixtures, air conditioning, plumbing, and telephone and telecommunication wiring and equipment. Notwithstanding the above, Tenant may, upon written notice to Landlord, at its own expense, make non-structural, interior changes to the Premises without Landlord’s prior approval, provided that such changes do not exceed $25,000.00 per Alteration. At the expiration of the Lease Term, Landlord may require the removal of any additions, alterations, improvements or Utility Installations made by Tenant without Landlord’s consent or, with regard to any additions, alterations, improvements or Utility Installations made after Tenant’s Work is complete, which Landlord designated as being required to be removed in writing in which Landlord granted its consent, and Tenant shall repair any damage caused by such removal, at Tenant's expense. Should Landlord permit Tenant to make its own additions, alterations, improvements or Utility Installations, Tenant may only use such contractor as has been expressly approved by Landlord, and Landlord may require Tenant, if commercially reasonable under the circumstances, to provide Landlord, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such improvements, to insure Landlord against any liability for mechanic's and materialmen's liens and to insure completion of the work. Should Tenant make any additions, alterations, improvements or Utility Installations without the prior approval of Landlord, or use a contractor not expressly approved by Landlord, Landlord may, at any time during the Lease Term, without limitation of any other remedy available to Landlord, require that Tenant remove any part or all of the same. All additions, alterations, improvements and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Tenant), which may be made to the Premises by Tenant, including but not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings, sound attenuation, and lighting and telephone or communication systems, conduit, wiring and outlets, shall be made and done in a good and workmanlike manner in compliance with all applicable laws and ordinances and of good and sufficient quality and materials and shall be the property of Landlord and remain upon and be surrendered with the Premises at the expiration of the Lease Term, unless Landlord requires their removal as described above. Provided Tenant is not in default, notwithstanding the provisions of this Article, Tenant's personal property and equipment, other than that which is affixed to the Premises so that it cannot be removed without material damage to the Premises or Building or Project, and other than Utility Installations, shall remain the property of Tenant and may be removed by Tenant as provided herein.

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Tenant shall provide Landlord with as-built plans and specifications for any additions, alterations, improvements or Utility Installations requiring Landlord’s prior consent. All voice, data, video, audio and other low voltage control transport system cabling and/or cable bundles installed in the Building by Tenant or its contractor shall be (A) plenum rated and/or have a composition makeup suited for its environmental use in accordance with NFPA 70/National Electrical Code; (B) labeled every 3 meters with the Tenant’s name and origination and destination points; (C) installed in accordance with all EIA/TIA standards and the National Electric Code; (D) installed and routed in accordance with a routing plan showing “as built” or “as installed” configurations of cable pathways, outlet identification numbers, locations of all wall, ceiling and floor penetrations, riser cable routing and conduit routing (if applicable), and such other information as Landlord may request. The routing plan shall be available to Landlord and its agents at the Building upon request.

Notwithstanding anything in this Lease to the contrary, Landlord agrees to accept the Premises upon the expiration or earlier termination of this Lease with Tenant’s Work intact, which Tenant’s Work shall thereafter become Landlord's property, and Tenant shall not be required to restore the Premises at the end of the Lease Term to the condition existing prior to the making of such Tenant’s Work; provided, however, Tenant shall, at Tenant’s expense, remove all data cabling (other than unexposed conduit) installed in the Premises by Tenant in connection with Tenant’s Work and shall repair any damage caused by such removal.

During the initial Lease Term, Tenant shall have the right to place its name on the entry door to the Premises and shall have the exclusive right to place its signage at the top of the Building in accordance with this paragraph (the “ Signage ”). The Signage shall be installed and maintained at Tenant's sole cost and expense throughout the Lease Term. The rights of Tenant under this paragraph: (i) are personal to Tenant and may not be assigned to any other party, including without limitation any assignee or subtenant; (ii) are terminable by Landlord following any monetary Event of Default by Tenant; and (iii) are terminable by Landlord if Tenant reduces the size of the Premises, notwithstanding the consent of Landlord thereto. The location, size, material and design of the Signage shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld or delayed, and Tenant shall be responsible for compliance with all applicable laws, ordinances and regulations. Upon the expiration or earlier termination of this Lease or the termination of Tenant’s sign rights as set forth herein, Tenant shall remove the Signage, at Tenant's sole cost and expense, and restore the Building to its condition immediately prior to the installation of the Signage. If Tenant fails to timely remove the Signage, then the Signage shall conclusively be deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without further notice to Tenant or any other person and without obligation to account therefor. Tenant shall reimburse Landlord for all reasonable costs incurred by Landlord in connection therewith within thirty (30) days of Landlord’s invoice. The provisions of this paragraph shall survive the expiration or earlier termination of the Lease.

ARTICLE 12. PERSONAL PROPERTY/SURRENDER OF PREMISES

All of Tenant’s personal property located in the Premises shall remain the property of Tenant and may be removed by Tenant not later than the Expiration Date or the earlier termination of the Lease Term. Tenant shall promptly repair, at its own expense, any damage resulting from such removal. All cabinetry, built-in appliances, wall coverings, floor coverings, window coverings, electrical fixtures, plumbing fixtures, conduits, lighting, and other special fixtures that may be placed upon, installed in, or attached to the Premises by Tenant shall, at the termination of this Lease be the property of Landlord unless Landlord requires its removal as set forth in Article 11 . At the Expiration Date or upon the earlier termination of the Lease Term, Tenant shall surrender the Premises in good condition, reasonable wear and tear excepted, and shall deliver all keys to Landlord.

ARTICLE 13. LIENS

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Tenant shall keep the Premises, Building, and the Project free from any liens arising out of work performed, material furnished, or obligations incurred due to the actions of Tenant or Tenant's Permittees or the failure of Tenant to comply with any law. In the event any such lien does attach against the Premises, Building, or Project, and Tenant does not discharge the lien or post bond (which under law would prevent foreclosure or execution under the lien) within thirty (30) days after demand by Landlord, such event shall be a default by Tenant under this Lease and, in addition to Landlord's other rights and remedies, Landlord may take any action necessary to discharge the lien at Tenant’s expense.

ARTICLE 14. USE OF PREMISES/RULES AND REGULATIONS

14.1

Tenant shall not use the Premises for any use other than for general office, research and development, product testing, laboratory, product manufacturing, storage and ancillary uses related thereto (the “ Permitted Use ”), and Tenant agrees that it will use the Premises in such manner as to not interfere with or infringe on the rights of other tenants in the Building or Project. Tenant agrees to comply with all applicable laws, ordinances and regulations in connection with its use of the Premises, agrees to keep the Premises in a clean and sanitary condition, and agrees not to perform any act in the Building (other than in conjunction with the Permitted Use) which would increase any insurance premiums related to the Building or Project or would cause the cancellation of any insurance policies related to the Building or Project.

14.2

Except for (i) general office supplies typically used in an office area in the ordinary course of business, such as copier toner, liquid paper, glue, ink, and cleaning solvents, but only to the extent the same are used by Tenant in the manner for which they were designed and in compliance with all applicable laws, and (ii) customary materials, wastes and substances used for the Permitted Use (A) which are used in such amounts as may be normal for the business operations conducted by Tenant on the Premises, and (B) which are handled and disposed of by Tenant (as opposed to by Landlord) in accordance with all applicable governmental laws, rules and regulations, and in accordance with the applicable provisions of this Lease (and in no event in any Building waste container), Tenant shall not use, generate, manufacture, store, or dispose of, in, under or about the Premises, the Building, or the Project or transport to or from the Premises, the Building, or the Project, any Hazardous Materials. For purposes of this Lease, " Hazardous Materials " includes, but is not limited to: (i) flammable, explosive, or radioactive materials, hazardous wastes, toxic substances, or related materials; (ii) all substances defined as "hazardous substances," "hazardous materials," "toxic substances," or "hazardous chemical substances or mixtures" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq., as amended by Superfund Amendments and Re-authorization Act of 1986; the Hazardous Materials Transportation Act, 49 U.S.C. § 1901, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; (iii) those substances listed in the United States Department of Transportation Table (49 CFR 172.10 and amendments thereto) or by the Environmental Protection Agency (or any successor agent) as hazardous substances (40 CFR Part 302 and amendments thereto); (iv) any material, waste, or substance which is (A) petroleum, (B) asbestos, (C) polychlorinated biphenyl's, (D) designated as a "hazardous substance" pursuant to § 311 of the Clean Water Act, 33 U.S.C. S 1251 et seq. (33 U.S.C. § 1321) or listed pursuant to the Clean Water Act (33 U.S.C. § 1317); (E) flammable explosives; or (F) radioactive materials; and (v) all substances defined as "hazardous wastes" in the statutes of the state in which the Premises are located (the “ State ”). Tenant shall, at its sole cost, expense, risk and liability, remove or cause to be removed from the Premises, the Building and the Project and properly disposed of, all bio-hazardous medical or infectious waste, including, but without limitation, all syringes, needles and any materials contaminated with bodily fluids of any type, character or description of whatsoever nature, any waste, substance or material (solid, liquid or gaseous) generated, produced or resulting from the diagnosis, treatment or immunization of human beings, or any research pertaining thereto, or the

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production or testing of biological agents, including without limitation, any substance defined or referred to in 29 CFR Part 1910.1930, in accordance with all applicable law. Tenant shall not dispose of any such infectious waste materials in any receptacles provided by Landlord for disposal of normal refuse, and Tenant specifically recognizes and acknowledges that Landlord shall not be responsible for removal or disposal of any such infectious waste materials. If Tenant uses, generates, stores or disposes of any Hazardous Materials in or about the Premises, Tenant shall obtain all necessary permits and comply with all statutes, regulations, and rules applicable to such activity. Furthermore, Landlord shall have the right to require that Tenant deliver periodic environmental audits of the Premises evidencing that no violations have occurred. Tenant shall indemnify, defend and hold Landlord harmless from and against all liability ( including, without, limitation strict liability ), cost, claim, penalty, expense and fees (including court costs and attorneys’ fees) arising from Tenant’s use, generation, storage or disposal of Hazardous Materials in or about the Premises, the Building, or the Project. This section and the indemnity set forth herein shall survive the expiration or earlier termination of this Lease.

14.3

Tenant shall comply with the rules and regulations of the Building which are attached hereto as Exhibit B . Landlord may, from time to time, change such rules and regulations for the safety, care, or cleanliness of the Building and related facilities, provided that such changes are reasonable and applicable to all tenants of the Building, will not unreasonably interfere with Tenant’s Permitted Use of the Premises and are enforced by Landlord in a non-discriminatory manner. Tenant shall be responsible for the compliance with such rules and regulations by any assignees claiming by, through, or under Tenant; any subtenants or invitees claiming by, through, or under Tenant; and any of their respective agents, contractors, employees, and invitees.

ARTICLE 15. RIGHTS RESERVED BY LANDLORD

In addition to all other rights, Landlord has the following rights, exercisable without notice to Tenant and without effecting an eviction, constructive or actual, and without giving right to any claim for set off or abatement of rent: (a) to decorate and to make repairs, alterations, additions, changes, or improvements in and about the Building; (b) to approve the weight, size, and location of heavy objects in and about the Premises and the Building, and to require all such items to be moved into and out of the Building and Premises in such manner as Landlord shall direct in writing; (c) to prohibit the placing of vending machines in or about the Premises without the prior written consent of Landlord; (d) to take all such reasonable measures for the security of the Building and its occupants (provided that Landlord shall have no obligation to provide any such security unless required by law); and (e) to temporarily block off parking spaces for maintenance or construction purposes; provided, however, Landlord’s exercise of the foregoing rights shall not materially impair Tenant’s access to or use of the Premises.

ARTICLE 16. QUIET ENJOYMENT

Landlord agrees that, provided an Event of Default by Tenant has not occurred, Landlord will do nothing that will prevent Tenant from quietly enjoying and occupying the Premises during the Lease Term. Tenant agrees this Lease is subordinate to the Rules and Regulations described in Article 14 , and the Parking Rules and Regulations described in Article 6 .

ARTICLE 17. MAINTENANCE AND REPAIR

17.1

Landlord shall, subject to reimbursement for Operating Costs, keep and maintain in good repair and working order, subject to reasonable wear and tear, and replace if reasonably necessary: (1) structural elements of the Building, including foundations and exterior walls; (2) water and sewer lines from the point of origin to the Building; (2) Common Areas; (3) the roof and roof covering of the Building; and (4) exterior windows, plate glass and curtain walls of the Building. Tenant waives all rights to make repairs at the expense of Landlord. If Landlord would be required to perform any maintenance or make

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any repairs because of: (a) modifications to the roof, walls, foundation, and floor of the Building from that set forth in any Landlord's plans and specifications which are required by Tenant's design for improvements, alterations and additions; (b) installation of Tenant's improvements, fixtures, or equipment; (c) a negligent or wrongful act of Tenant or Tenant's Permittees; or, (d) Tenant's failure to perform any of Tenant's obligations under this Lease, Landlord may perform the maintenance or repairs and Tenant shall pay Landlord the cost thereof. To the extent allowed by law, Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect., including, without limitation, under Sections 1941 and 1942 of the California Civil Code, and the right to terminate the Lease under Section 1932(1) of the California Civil Code, and any other laws, statutes or ordinances now or hereafter in effect of like import.

17.2

Except as expressly set forth as Landlord’s responsibility in Section 17.1 above or elsewhere in this Lease, Tenant shall keep and maintain in good repair and working order all portions of the Premises, at Tenant’s sole cost. Tenant agrees to: (a) repair or replace all ceiling and wall finishes and floor or window coverings which require repair or replacement during the Lease Term, at Tenant's sole cost; (b) at Tenant's sole cost, maintain and repair interior partitions; doors; electronic, phone and data cabling and related equipment that is installed by or for the benefit of Tenant and located in the Premises or other portions of the Building or Project; (c) at Tenant’s sole cost, maintain and repair (i) all air conditioning units, private showers and kitchens, including hot water heaters, plumbing, dishwashers, ice machines and similar facilities serving Tenant exclusively, (ii) phone rooms used exclusively by Tenant, (iii) alterations performed by contractors retained by or on behalf of Tenant, and (iv) all of Tenant's furnishings, trade fixtures, equipment and inventory; and (d) adopt and implement the moisture and mold control guidelines set forth on Exhibit F attached hereto. Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive maintenance/service contract (the “ Service Contract ”) with a maintenance contractor for servicing the HVAC. The maintenance contractor and the contract must be approved by Landlord, which approval shall not be unreasonably withheld or delayed. The Service Contract must include all services suggested by the equipment manufacturer within the operation/maintenance manual and must become effective (and a copy thereof delivered to Landlord) within thirty (30) days of the date Tenant takes possession of the Premises. Tenant shall provide Landlord a copy of such Service Contract and from time to time upon request furnish proof reasonably satisfactory to Landlord that all such systems and equipment are being serviced in accordance with the Service Contract.


17.3	Notwithstanding anything in this Lease to the contrary, to the extent the terms and provisions of Article 22 conflict with, or are inconsistent with, the terms and provisions of this Article 17 , the terms and provisions of Article 22 shall control. Tenant shall take all reasonable precautions to insure that the Premises are not subjected to excessive wear and tear.

ARTICLE 18. UTILITIES AND JANITORIAL SERVICES

18.1

Other than Landlord’s maintenance obligations expressly set forth in this Lease, Landlord shall not be obligated to provide any services to Tenant. Tenant shall obtain regular janitorial services for the Premises at Tenant’s sole cost and expense. Tenant shall obtain all water, electricity, sewerage, gas, telephone and other utilities for the Premises directly from the public utility company furnishing same. The cost of water provided to tenants of the Building is included in Operating Costs. Tenant shall pay all utility deposits and fees, and all monthly service charges for water, electricity, sewage, gas, telephone and any other utility services furnished to the Premises during the Lease Term. In the event any such utilities are not separately metered on the Commencement Date, then until such time as such services are separately metered, Tenant shall pay Landlord Tenant’s equitable share of the cost of such services, as determined by Landlord and confirmed in a written notice to Tenant with reasonable background

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information relating to such costs. Anything to the contrary notwithstanding, Tenant shall remain obligated for the payment of Tenant’s Share of any utilities or services furnished to the Common Areas. LANDLORD SHALL NOT BE LIABLE FOR DAMAGES NOR SHALL RENT OR OTHER CHARGES ABATE IN THE EVENT OF ANY FAILURE OR INTERRUPTION OF ANY UTILITY OR SERVICE SUPPLIED TO THE PREMISES, BUILDING OR PROJECT BY A REGULATED UTILITY OR MUNICIPALITY, OR ANY FAILURE OF A BUILDING SYSTEM SUPPLYING ANY SUCH SERVICE TO THE PREMISES AND NO SUCH FAILURE OR INTERRUPTION SHALL ENTITLE TENANT TO ABATE RENT OR TERMINATE THIS LEASE OR RELIEVE TENANT OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE. LANDLORD SHALL USE REASONABLE EFFORTS TO RESTORE ANY SUCH INTERRUPTED SERVICES AS SOON AS REASONABLY POSSIBLE TO MITIGATE THE ADVERSE IMPACT OF THE SAME UPON TENANT AND ITS OPERATIONS ON THE PREMISES.

18.2

Landlord hereby grants Tenant the right, at Tenant’s sole cost and expense, to install one (1) emergency generator (the “ Generator ”) for use in connection with the Premises in a location approved by Landlord in its sole and absolute discretion, subject to the following provisions: (a) The Generator must be professionally installed in accordance with (i) Landlord’s rules and regulations and (ii) any and all applicable governmental laws, ordinances, and regulations; (b) Tenant, at its sole cost and expense, shall maintain the Generator in good condition and repair; (c) Tenant hereby waives any and all claims against Landlord in connection with the Generator; (d) Tenant hereby acknowledges that the Generator may need to be installed in the parking area of the Building over one or more of the parking spaces. In such event, such parking spaces shall be included as part of Tenant’s Proportionate Share of the total parking spaces; and (e) at the end of the Lease Term or any renewal of the Lease Term or other sooner termination of this Lease, Tenant shall, at Tenant’s sole cost and expense, remove the Generator and repair all damage resulting from such removal to return the area on which the Generator was located to the condition that existed prior to the installation of the Generator; provided, however, in the event Tenant desires to leave the Generator at the Building, Landlord may, at Landlord sole election, retain the Generator. In the event Landlord elects to retain the Generator, (i) Tenant shall peaceably deliver up to Landlord possession of the Generator in good condition and repair, excepting ordinary wear and tear and damage by fire or other casualty, (ii) the Generator shall become a part of the realty and shall belong to Landlord without compensation, and (iii) title shall pass to Landlord under this Lease as by a bill of sale. In the event that Landlord elects not to retain the Generator, Tenant shall be required to remove the Generator as provided above.

ARTICLE 19. ENTRY AND INSPECTION

Landlord shall have the right, after twenty-four (24) hours’ advance notice to Tenant (except in the case of emergency when no notice is required), to enter into the Premises at reasonable times for the purpose of inspecting the Premises and reserves the right, during the last six (6) months of the Lease Term, to show the Premises at reasonable times to prospective tenants upon at least twenty-four (24) hours’ advance notice to Tenant. Landlord shall be accompanied by a representative of Tenant at all times during any such entry, except in the case of an emergency. Tenant’s failure to make its representative available at the time of Landlord’s entry of which Landlord has previously notified Tenant shall not prevent Landlord, its agents or representatives from entering the Premises. Landlord shall be permitted to take any action under this Article without causing any abatement of rent or liability to Tenant for any loss of occupation or quiet enjoyment of the Premises, nor shall such action by Landlord be deemed an actual or constructive eviction.

ARTICLE 20. ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE


20.1	All personal property and fixtures belonging to Tenant shall be placed and remain on the Premises at Tenant's sole risk. Upon taking possession of the Premises and thereafter during the Lease Term, the

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Tenant shall, at Tenant's sole cost and expense, maintain insurance coverage with limits not less than the following: (a) Worker's Compensation Insurance, minimum limit as defined by applicable laws; (b) Employer's Liability Insurance, minimum limit $1,000,000; (c) Commercial General Liability Insurance, Bodily Injury/Property, Damage Insurance (including the following coverages: Premises/Operations, Independent Contractors, Broad Form Contractual in support of the indemnification obligations of Tenant under this Lease, and Bodily and Personal Injury Liability), minimum combined single limit $1,000,000; and (d) Automobile Liability Insurance, minimum limit $1,000,000. All such policies shall include a waiver of subrogation in favor of Landlord and shall name Landlord and such other party or parties as Landlord may require as additional insureds. Tenant's insurance shall be primary, with any insurance maintained by Landlord to be considered excess. Tenant's insurance shall be maintained with an insurance company qualified to do business in the State and having a current A.M. Best manual rating of at least A-X or better. Before entry into the Premises and before expiration of any policy, evidence of these coverages represented by Certificates of Insurance issued by the insurance carrier must be furnished to Landlord. Certificates of Insurance should specify the additional insured status, the waiver of subrogation, and that such insurance is primary, and any insurance by Landlord is excess. The Certificate of Insurance shall state that Landlord will be notified in writing thirty (30) days before cancellation, material change, or non-renewal of insurance.


20.2	During the entire Lease Term, Landlord agrees to maintain public liability insurance in such forms and amounts as Landlord shall determine. The cost of the insurance obtained under this Section 20.2 shall be an Operating Cost under Article 5 of this Lease.

ARTICLE 21. CASUALTY INSURANCE


21.1	Tenant shall maintain fire and extended coverage insurance (full replacement value) with a business interruption and extra expense endorsements, on Tenant’s Work, Alterations, personal property and trade fixtures owned or used by Tenant.

21.2

Landlord shall maintain property insurance for the Building’s replacement value, less a commercially reasonable deductible if Landlord so chooses including endorsements as determined by Landlord throughout the Lease Term on the Building (excluding Tenant's trade fixtures and personal property). At Landlord's option, the policy of insurance may include a business interruption insurance endorsement for loss of rents. The cost of the insurance obtained under this Section 21.2 shall be an Operating Cost under Article 5 of this Lease.

ARTICLE 22. DAMAGE AND DESTRUCTION OF PREMISES


22.1	If the Premises or the Building are damaged by fire or other casualty (a " Casualty "), Landlord shall use good faith efforts to deliver to Tenant within sixty (60) days after such Casualty a good faith estimate (the " Damage Notice ") of the time needed to repair the damage caused by such Casualty.

22.2

If a material portion of the Premises is damaged by Casualty such that Tenant is prevented from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately before such Casualty and Landlord estimates that the damage caused thereby cannot be repaired within one hundred eighty (180) days after the commencement of repairs (the " Repair Period "), then Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant.


22.3	If a Casualty damages the Premises or a material portion of the Building and: (1) Landlord estimates that the damage to the Premises cannot be repaired within the Repair Period; (2) the damage to the Premises exceeds fifty percent (50%) of the replacement cost thereof (excluding foundations and footings), as estimated by Landlord, and such damage occurs during the final one (1) year period of the

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Lease Term; (3) regardless of the extent of damage to the Premises, Landlord makes a good faith determination that restoring the Building would be uneconomical; or (4) Landlord is required to pay any insurance proceeds arising out of the Casualty to a Landlord's Mortgagee, then Landlord may terminate this Lease by giving written notice of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant.

22.4

If neither party elects to terminate this Lease following a Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same condition as they existed immediately before such Casualty; however, other than building standard leasehold improvements Landlord shall not be required to repair or replace Tenant’s Work, any Alterations or betterments within the Premises (which shall be promptly and with due diligence repaired and restored by Tenant at Tenant's sole cost and expense) or any furniture, equipment, trade fixtures or personal property of Tenant or others in the Premises or the Building, and Landlord's obligation to repair or restore the Premises shall be limited to the extent of the insurance proceeds actually received by Landlord for the Casualty in question. If this Lease is terminated under the provisions of this Article 22 , Landlord shall be entitled to the full proceeds of the insurance policies providing coverage for all alterations, improvements and betterments in the Premises (and, if Tenant has failed to maintain insurance on such items as required by this Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord would have received had Tenant maintained insurance on such items as required by this Lease).

22.5

If the Premises are damaged by Casualty but Tenant is reasonably able to conduct its business operations upon the Premises despite such damage, Rent for the portion of the Premises rendered untenantable by the damage shall be abated on a reasonable basis from the date of damage until the completion of Landlord's repairs (or until the date of termination of this Lease by Landlord or Tenant as provided above, as the case may be), unless Tenant or a Tenant Permittee caused such damage, in which case, Tenant shall continue to pay Minimum Monthly Rent and all other rent without abatement and Tenant shall be liable to Landlord for the cost and expense of the repair and restoration of the Premises or the Building caused thereby to the extent that costs and expense are not covered by insurance proceeds.


22.6	The rights contained in this Article 22 shall be Tenant’s sole and exclusive remedy in the event of a casualty. Tenant hereby waives the provisions of Sections 1932(2) and 1933(4) of the California Civil Code and the provisions of any successor or other law of like import.

ARTICLE 23. EMINENT DOMAIN


23.1	If the entire Building or Premises are taken by right of eminent domain or conveyed in lieu thereof (a " Taking "), this Lease shall terminate as of the date of the Taking.

23.2

If any part of the Building or the Common Area becomes subject to a Taking and such Taking will prevent Tenant from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately before such Taking for a period of more than one hundred eighty (180) days, then Tenant may terminate this Lease as of the date of such Taking by giving written notice to Landlord within thirty (30) days after the Taking, and Rent shall be apportioned as of the date of such Taking. If Tenant does not terminate this Lease, then Rent shall be abated on a reasonable basis as to that portion of the Premises rendered untenantable by the Taking.

23.3

If any material portion, but less than all, of the Building becomes subject to a Taking, or if Landlord is required to pay any of the proceeds arising from a Taking to a Landlord's Mortgagee, then Landlord may terminate this Lease by delivering written notice thereof to Tenant within thirty (30) days after such Taking, and Rent shall be apportioned as of the date of such Taking. If Landlord does not so

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terminate this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall abate as provided in Section 22.5 .

23.4

If any Taking occurs, then Landlord shall receive the entire award or other compensation for the Land, the Building, and other improvements taken; however, Tenant may separately pursue a claim (to the extent it will not reduce Landlord's award) against the condemnor for the value of Tenant's personal property which Tenant is entitled to remove under this Lease, moving costs, loss of business, and other claims it may have.


23.5	The rights contained in this Article 23 shall be Tenant’s sole and exclusive remedy in the event of a taking or condemnation. Landlord and Tenant each waives the provisions of Section 1265.130 and 1265.150 of the California Code of Civil Procedure and the provisions of any successor or other law of like import.

ARTICLE 24. ASSIGNMENT AND SUBLETTING

Tenant agrees not to assign, mortgage, or pledge this Lease, and shall not sublet the Premises without Landlord's prior written consent, which shall not be unreasonably withheld if Landlord does not elect to terminate this Lease as provided herein. Without limitation, it is agreed that Landlord's consent shall not be considered unreasonably withheld if: (1) the proposed transferee's financial condition does not meet the criteria Landlord uses to select Building tenants having similar leasehold obligations; (2) the proposed transferee's use is not suitable for the Building considering the business of the other tenants and the Building's prestige, or would result in a violation of another tenant's rights; (3) the proposed transferee is a governmental agency or occupant of the Project; (4) a monetary Event of Default by Tenant has occurred and is continuing; or (5) any portion of the Premises or Building would likely become subject to additional or different laws as a consequence of the proposed assignment or subletting. Tenant shall not be entitled to receive any monetary damages based upon a claim that Landlord unreasonably withheld its consent to a proposed sublease or assignment and Tenant's sole remedy shall be an action to enforce any provision through specific performance or declaratory judgment. Any attempted sublease or assignment in violation of this Article shall, at Landlord's option, be void. Consent by Landlord to one or more subleases or assignments shall not operate as a waiver of Landlord's rights to approve any subsequent subleases or assignments. Any assignment or subletting hereunder shall not release or discharge Tenant of or from any liability under this Lease, and Tenant shall continue to be fully liable thereunder. As part of its request for Landlord's consent to a sublease or assignment, Tenant shall provide Landlord with financial statements for the proposed transferee, a complete copy of the proposed sublease, assignment and other contractual documents and such other information as Landlord may reasonably request. Landlord shall, by written notice to Tenant within thirty (30) days of its receipt of the required information and documentation, either consent to the sublease or assignment by the execution of a consent agreement in a form reasonably designated by Landlord or reasonably refuse to consent to the sublease or assignment in writing. If Tenant shall assign or sublet the Lease or request the consent of Landlord to any assignment or subletting or if Tenant shall request the consent of Landlord for any act Tenant proposes to do, then Tenant shall pay Landlord's reasonable and actual out-of-pocket costs and expenses incurred in connection therewith, including attorneys', architects', engineers' or other consultants' fees, up to a maximum total sum of $2,500.00. Consent by Landlord to one assignment, subletting, occupation, or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation, or use by another person. Tenant shall pay fifty percent (50%) of all rent which Tenant receives as a result of a sublease or assignment that is in excess of the Rent payable to Landlord hereunder for the portion of the Premises and Lease Term covered by the sublease or assignment, excluding all reasonable and customary expenses directly incurred by Tenant attributable to the sublease or assignment (other than Landlord's costs and expenses), including brokerage fees, legal fees and construction costs. Tenant shall pay Landlord for Landlord's share of any such excess within thirty (30) days after Tenant's receipt of such excess rent. If Tenant

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is a corporation, an unincorporated association or a partnership, unless listed on a national stock exchange, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate in excess of fifty percent (50%) shall be deemed an assignment of this Lease. Tenant agrees to immediately notify Landlord of any change in its ownership. Tenant hereby waives any suretyship defenses it may now or hereafter have to an action brought by Landlord including those contained in Sections 2787 through 2856, inclusive, 2899 and 3433 of the California Civil Code, as now or hereafter amended, or similar laws of like import.

ARTICLE 25. SALE OF PREMISES BY LANDLORD

In the event of any sale of the Premises or any assignment of this Lease by Landlord (or a successor in title), the assignee or purchaser shall be deemed, without any further agreement between the parties, to have assumed and agreed to carry out any and all of the covenants and obligations of Landlord under this Lease, and shall be substituted as Landlord for all purposes from and after the sale or assignment, and Landlord (or such successor) shall automatically be entirely freed and relieved of all liability under any and all of Landlord's covenants and obligations contained in this Lease or arising out of any act, occurrence, or omission occurring after such sale or assignment. Landlord shall deliver to its successor any Security Deposit and prepaid Rent received from Tenant under this Lease.

ARTICLE 26. SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT

Tenant's interest under this Lease is subordinate to all terms of and all liens and interests arising under any ground lease, deed of trust, or mortgage (each, as renewed, modified and/or extended from time to time) now or hereafter placed on the Landlord's interest in the Premises, the Building, or the Project. Tenant consents to an assignment of Landlord's interest in this Lease to Landlord's lender as required under such financing. If the Premises or the Building is sold as a result of a default under the mortgage, or pursuant to a transfer in lieu of foreclosure, Tenant shall, at the mortgagee's, purchaser's or ground lessor's sole election, attorn to the mortgagee or purchaser. This Article is self-operative provided that any subordination is contingent on the lender’s agreement (“ Non-disturbance Agreement ”) not to disturb Tenant’s rights under the Lease provided Tenant is not in default of the Lease beyond any applicable cure period. However, Tenant agrees to execute and deliver, if Landlord, any deed of trust holder, mortgagee, or purchaser should so request, such further instruments necessary to subordinate this Lease to a lien of any mortgage or deed of trust (provided that said agreement includes a Non-disturbance Agreement), to acknowledge the consent to assignment and to affirm the attornment provisions set forth herein.

ARTICLE 27. LANDLORD'S DEFAULT AND RIGHT TO CURE

Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently pursues the same to completion.

ARTICLE 28. ESTOPPEL CERTIFICATES

Tenant agrees at any time and from time to time upon request by Landlord, to execute, acknowledge, and deliver to Landlord, within ten (10) Business Days after Tenant’s receipt (or deemed receipt pursuant to Article 33 hereof) of demand by Landlord, a statement in writing certifying (a) that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating such modifications), (b) the dates to which the Minimum Monthly Rent and other rent

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and charges have been paid in advance, if any, (c) Tenant's acceptance and possession of the Premises, (d) the commencement of the Lease Term, (e) the rent provided under the Lease, (f) that Landlord is not in default under this Lease (or if Tenant claims such default, the nature thereof), (g) that Tenant claims no offsets against the rent, and (h) such other information as may be reasonably requested with respect to the provisions of this Lease or the tenancy created by this Lease. Tenant's failure to deliver such statement within such time shall be conclusive upon Tenant (i) that this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord's performance, and (iii) that not more than one month's rent has been paid in advance.

ARTICLE 29. TENANT'S DEFAULT AND LANDLORD'S REMEDIES


29.1	Tenant will be in default under the Lease if any of the following occurs, and same shall be deemed an “ Event of Default ”:

(a)

If Tenant fails to pay the Minimum Monthly Rent or make any other payment required by the Lease within three (3) Business Days after Tenant’s receipt (or deemed receipt pursuant to Article 33 hereof) of written notice or demand for payment from Landlord, provided that if any such notice is given two (2) times in any calendar year, any subsequent failure to pay on or before the first Business Day of the month or any other payment on or before the date it is due shall be an Event of Default, without notice. “ Business Day ” shall mean Monday through Friday of each week, exclusive of holidays.


(b)	If Tenant assigns the Lease or mortgages its interest in the Lease or sublets any part of the Premises without first obtaining Landlord's written consent, as required by Article 24 .

(c)

If Tenant abandons the Premises, or ceases to operate its business on the Premises (if either is accompanied by Tenant’s failure to pay Rent or other sums required under this Lease or failure to otherwise comply with the terms of this Lease, including Tenant’s maintenance obligations hereunder), or becomes bankrupt or insolvent, or makes any general assignment of all or a substantial part of its property for the benefit of creditors, or if a receiver is appointed to operate Tenant's business or to take possession of all or a substantial part of Tenant's property.

(d)

If a lien attaches to the Lease or to Tenant's interest in the Premises, and Tenant fails to post a bond or other security or to have the lien released within ten (10) days of its notification thereof, or if a mortgagee institutes proceedings to foreclose its mortgage against Tenant's leasehold interest or other property and Tenant fails to have the foreclosure proceedings dismissed within ten (10) calendar days after the entry of any judgment or order declaring the mortgage to be valid and Tenant to be in default on the obligation secured thereby, or directing enforcement of the mortgage.


(e)	If Tenant fails to maintain any of the insurance as required by the Lease.

(f)

If Tenant breaches any other provision of the Lease and fails to cure the breach within fifteen (15) days after Tenant’s receipt (or deemed receipt pursuant to Article 33 hereof) of written notice of the breach from Landlord, or if the breach cannot be cured within fifteen (15) days, then if Tenant does not proceed with reasonable diligence to cure the breach within such additional time as may be reasonably necessary under the circumstances, not to exceed sixty (60) days, which notice shall be in lieu of, and not in addition to, any notice required under Section 1161 et seq. of the California Code of Civil Procedure.

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29.2	If Tenant is in default, then Landlord may, in addition to all other rights and remedies afforded Landlord hereunder or by law or equity, take any one or more of the following actions:


(a)	Terminate this Lease by giving Tenant written notice thereof, in which event Tenant shall immediately surrender the Premises to Landlord. In the event that Landlord shall elect to so terminate this Lease, then Landlord may recover from Tenant:

(i) The worth at the time of award of any unpaid Rent which had been earned at the time of such termination; plus

(ii) The worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss Tenant proves reasonably could have been avoided; plus

(iii) The worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant proves reasonably could be avoided; plus

(iv) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course would be likely to result therefrom, including all amounts due under Section 29.2(f) ; plus

(v) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law.

As used in subparagraphs (i) and (ii) above, the “worth at the time of award” is computed by allowing interest at the Default Rate. As used in subparagraph (iii) above, the “worth at the time of award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

Forbearance by Landlord to enforce one or more of the remedies herein provided upon an Event of Default shall not be deemed or construed to constitute a waiver of such default. Tenant hereby waives for Tenant and for all those claiming under Tenant all rights now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any termination of this Lease.

(b)

Terminate Tenant’s right to possess the Premises without terminating this Lease by giving written notice thereof to Tenant, in which event Tenant shall pay to Landlord: (1) all Rent and other amounts accrued hereunder to the date of termination of possession; (2) all amounts due from time to time under Section 29.2(f) ; and (3) all Rent and other net sums required hereunder to be paid by Tenant during the remainder of the Term, diminished by any net sums thereafter received by Landlord through reletting the Premises during such period, after deducting all costs incurred by Landlord in reletting the Premises. Any sums due under the foregoing Section 29.2(b)(3) shall be calculated and due monthly. If Landlord elects to proceed under this Section 29.2(b) , Landlord may remove all of Tenant’s property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming liable for any loss or damage which may be occasioned thereby. If and to the extent required by applicable law, Landlord shall use commercially reasonable efforts to relet the Premises on such terms as Landlord in its sole discretion

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may determine (including a term different from the Term, rental concessions, and alterations to, and improvement of, the Premises); however, Landlord shall not be obligated to expend funds in connection with reletting the Premises, nor to relet the Premises before leasing other portions of the Project, as applicable, and Landlord shall not be obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all of Landlord’s leasing criteria. Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises or to collect rent due for such reletting. Tenant shall not be entitled to the excess of any consideration obtained by reletting over the Rent due hereunder. Reentry by Landlord in the Premises shall not affect Tenant’s obligations hereunder for the unexpired Term; rather, Landlord may, from time to time, bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord’s waiting until the expiration of the Term. Unless Landlord delivers written notice to Tenant expressly stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to be taken under this Section 29.2(b) . If Landlord elects to proceed under this Section 29.2(b) , it may at any time elect to terminate this Lease under Section 29.2(a) .

(c)

Perform any act Tenant is obligated to perform under the terms of this Lease (and enter upon the Premises in connection therewith if necessary) in Tenant’s name and on Tenant’s behalf, without being liable for any claim for damages therefor, and Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease (including, but not limited to, collection costs and legal expense, plus interest thereon at the Default Rate.


(d)	Additionally, with or without notice, and to the extent permitted by Law, Landlord may alter locks or other access control devices at the Premises to deprive Tenant of access thereto, and Landlord shall not be required to provide a new key or right of access to Tenants).


(e)	In addition to all other rights and remedies provided Landlord in this Lease and by Law, Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord may continue the Lease in effect after Tenant’s breach and abandonment and recover Rents as they become due if Tenant has the right to sublet or assign the Lease, subject to reasonable limitations).

(f)

Upon any Event of Default, Tenant shall pay to Landlord all costs incurred by Landlord (including court costs and reasonable attorneys’ fees and expenses) in: (1) obtaining possession of the Premises; (2) removing and storing Tenant’s or any other occupant’s property; (3) repairing, restoring, altering, remodeling, or otherwise putting the Premises into condition acceptable to a new tenant; (4) if Tenant is dispossessed of the Premises and this Lease is not terminated, reletting all or any part of the Premises (including brokerage commissions, cost of tenant finish work, and other costs incidental to such reletting); (5) performing Tenant’s obligations which Tenant failed to perform; and (6) enforcing, or advising Landlord of, its rights, remedies, and recourses arising out of the Event of Default. To the full extent permitted by Law, Landlord and Tenant agree the federal and state courts of the state in which the Premises are located shall have exclusive jurisdiction over any matter relating to or arising from this Lease and the parties’ rights and obligations under this Lease.


(g)	Any action taken by Landlord under this Section 29 shall not operate as a waiver of any right which Landlord would otherwise have against Tenant for rent hereby or otherwise, and Tenant shall remain

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responsible to Landlord for any loss and/or damage suffered by Landlord by reason of Tenant’s default or breach. The words “re-enter” and “re-entry” as used in this Lease are not restricted to their technical legal meaning.

(h)

The various rights and remedies herein granted to Landlord shall be cumulative and in addition to any other Landlord may be entitled to by law or in equity, and the exercise of one or more rights or remedies shall not impair Landlord’s right to exercise any other right or remedy. In all events, Landlord shall have the right upon notice to Tenant to cure any breach by Tenant at Tenant’s sole cost and expense, and Tenant shall reimburse Landlord for such actual out-of-pocket expenses upon demand.


29.3	Intentionally deleted.


29.4	If Tenant is in arrears in payment of Rent, Tenant waives its right, if any, to designate the items to which any payments made by Tenant are to be credited, and Landlord may apply any payments made by Tenant to such items as Landlord sees fit, irrespective of any designation or request by Tenant as to the items to which any such payments shall be credited.


29.5	Tenant shall not interpose any counterclaim (other than a compulsory counterclaim) in any summary proceeding commenced by Landlord to recover possession of the Premises and shall not seek to consolidate such proceeding with any action which may have been or will be brought by Tenant or any other person or entity.

ARTICLE 30. TENANT'S RECOURSE

Anything in this Lease to the contrary notwithstanding, Tenant agrees to look solely to the estate and property of Landlord in the Premises, subject to prior rights of any ground lessor, mortgagee, or deed of trust of the Premises or any part thereof, for the collection of any judgment requiring the payment of money by Landlord in the event of any default by Landlord under this Lease. Tenant agrees that it is prohibited from using any other procedures for the satisfaction of Tenants' remedies. Neither Landlord nor any of its respective officers, directors, employees, heirs, successors, or assigns, shall have any personal liability of any kind or nature, directly or indirectly, under or in connection with this Lease.

ARTICLE 31. HOLDING OVER

Subject to prior written consent by Landlord, if Tenant holds over after the Expiration Date, or any extension thereof, Tenant shall be a tenant at sufferance, the Minimum Monthly Rent shall be increased to: (a) during the first three months of such holdover, 125% of Tenant's lease rate at the time the Lease expired, and (b) thereafter, 150% of Tenant’s lease rate at the time the Lease expired; plus any amounts due under Article 5 , which shall be payable in advance on the first day of such holdover period and on the first day of each month thereafter. Tenant will be considered to be on a month-to-month basis during any holdover period.

ARTICLE 32. GENERAL PROVISIONS


32.1	This Lease is construed in accordance with the laws of the State.


32.2	If Tenant is composed of more than one person or entity, then the obligations of such entities or parties are joint and several.


32.3	If any term, condition, covenant, or provision of this Lease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, conditions, covenants, and provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

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32.4	The various headings and numbers herein and the grouping of the provisions of this Lease into separate articles and sections are for the purpose of convenience only and are not be considered a part hereof.


32.5	Time is of the essence of this Lease.

32.6

Other than for Tenant's obligations under this Lease that can be performed by the payment of money (e.g., payment of Rent and maintenance of insurance, and Tenant’s obligations pursuant to Exhibit D attached hereto), whenever a period of time is herein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war (declared or undeclared), acts of terrorism, governmental laws, regulations, or restrictions, or any other causes of any kind whatsoever which are beyond the control of such party.

32.7

If either Landlord or Tenant brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, or appeal thereon, shall be entitled to its reasonable attorneys’ fees and court costs to be paid by the losing party as fixed by the court in the same or separate suit, and whether or not such action is pursued to decision or judgment. The attorneys’ fee award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees and court costs reasonably incurred. Landlord shall be entitled to reasonable attorneys’ fees and all other costs and expenses incurred in the preparation and service of notices of default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such default.


32.8	This Lease, and any Exhibit or Addendum attached hereto, sets forth all the terms, conditions, covenants, provisions, promises, agreements, and undertakings, either oral or written, between the Landlord and Tenant. No subsequent alteration, amendment, change, or addition to this Lease is binding upon Landlord or Tenant unless reduced to writing and signed by both parties.


32.9	Subject to Article 24 , the covenants herein contained shall apply to and bind the heirs, successors, executors, personal representatives, legal representatives, administrators, and assigns of all the parties hereto.

32.10

No term, condition, covenant, or provision of this Lease shall be waived except by written waiver of Landlord, and the forbearance or indulgence by Landlord in any regard whatsoever shall not constitute a waiver of the term, condition, covenant, or provision to be performed by Tenant to which the same shall apply, and until complete performance by Tenant of such term, condition, covenant, or provision, Landlord shall be entitled to invoke any remedy available under this Lease or by law despite such forbearance or indulgence. The waiver by Landlord of any breach or term, condition, covenant, or provision hereof shall apply to and be limited to the specific instance involved and shall not be deemed to apply to any other instance or to any subsequent breach of the same or any other term, condition, covenant, or provision hereof. Acceptance of rent by Landlord during a period in which Tenant is in default in any respect other than payment of rent shall not be deemed a waiver of the other default. Any payment made in arrears shall be credited to the oldest amount outstanding and no contrary application will waive this right.


32.11	The use of a singular term in this Lease shall include the plural and the use of the masculine, feminine, or neuter genders shall include all others.


32.12	Landlord's submission of a copy of this Lease form to any person, including Tenant, shall not be deemed to be an offer to lease or the creation of a lease unless and until this Lease has been fully signed and delivered by Landlord.

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32.13	Every term, condition, covenant, and provision of this Lease, having been negotiated in detail and at arm's length by both parties, shall be construed simply according to its fair meaning and not strictly for or against Landlord or Tenant.


32.14	If the time for the performance of any obligation under this Lease expires on a Saturday, Sunday, or legal holiday, the time for performance shall be extended to the next succeeding day which is not a Saturday, Sunday, or legal holiday.


32.15	If requested by Landlord, Tenant shall execute written documentation with signatures acknowledged by a notary public, to evidence when and if Landlord or Tenant has met certain obligations under this Lease.

32.16

Within fifteen (15) days after Landlord’s request, but no more frequently than once per year, Tenant will furnish Tenant’s most recent audited financial statements (including any notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (and notes to them) as may have been prepared by an independent certified public accountant or, failing those, Tenant’s internally prepared financial statements.


32.17	This Lease may be executed in counterparts, each of which when executed and delivered is an original, but all of which together shall constitute one document. Delivery of an executed counterpart of this Lease by facsimile or in an electronic (i.e., “pdf” or “tif”) format shall be effective as an original.


32.18	Tenant represents and warrants as follows:

(i)

Tenant represents and warrants to, and covenants with, Landlord that neither Tenant nor any of its respective constituent owners or affiliates currently are, or shall be at any time during the Lease Term hereof, in violation of any laws relating to terrorism or money laundering (collectively, the “ Anti-Terrorism Laws ”), including without limitation Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “ Executive Order ”) and/or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “ USA Patriot Act ”).

(ii)

Tenant represents and warrants to, and covenants with Landlord that neither Tenant nor any of its respective constituent owners or affiliates is or shall be during the Term hereof a “ Prohibited Person ,” which is defined as follows: (A) a person or entity that is listed in the Annex to, or is otherwise subject to, the provisions of the Executive Order; (B) a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (C) a person or entity with whom Landlord is prohibited from dealing with or otherwise engaging in any transaction by any Anti-Terrorism Law, including without limitation the Executive Order and the USA Patriot Act; (D) a person or entity who commits, threatens or conspires to commit or support “terrorism” as defined in Section 3(d) of the Executive Order; (E) a person or entity that is named as a “specially designated national and blocked person” on the then-most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, https://www.treasury.gov/resource-center/sanctions/SDN-List , or at any replacement website or other replacement official publication of such list; and (F) a person or entity who is affiliated with a person or entity listed in items (A) through (E), above.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 24


(iii)	At any time during the Lease Term, but no more frequently than once per year, Tenant shall deliver to Landlord, within ten (10) days after receipt of a written request therefor, a written certification or such other evidence reasonably acceptable to Landlord evidencing and confirming Tenant’s compliance with this Section 32.17 .

ARTICLE 33. NOTICES

Wherever in this Lease it is required or permitted that notice or demand be given or served by either party to or on the other, such notice or demand shall be in writing and shall be given or served and shall not be deemed to have been duly given or served unless (a) in writing; (b) either (1) delivered personally, (2) deposited with the United States Postal Service, as registered or certified mail, return receipt requested, bearing adequate postage, or (3) sent by overnight express courier (including, without limitation, Federal Express, DHL Worldwide Express, Airborne Express, United States Postal Service Express Mail) with a request that the addressee sign a receipt evidencing delivery; and (c) addressed to the party at its address in Section 1.1 . Either party may change such address by written notice to the other. Service of any notice or demand shall be deemed completed forty-eight (48) hours after deposit thereof, if deposited with the United States Postal Service, or upon receipt if delivered by overnight courier or in person.

ARTICLE 34. BROKER'S COMMISSIONS

Each of the parties to this Lease represents and warrants to the other party that there are no claims for brokerage commissions or finder's fees in connection with this Lease (excepting to Voit Real Estate Services, representing Landlord, and Jones Lang LaSalle, representing Tenant). Each party shall indemnify, defend and hold the other party harmless for, from and against all costs, expenses, attorneys' fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through or under the indemnifying party. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.

ARTICLE 35. INDEMNIFICATION/WAIVER OF SUBROGATION

35.1

Tenant shall indemnify, defend, and hold Landlord and any lender of Landlord, and their respective partners, trustees, officers, directors, shareholders, beneficiaries, agents and employees, harmless against all Claims (as defined below) and costs incurred by Landlord arising from: (a) any act or omission of Tenant or Tenant's Permittees which results in personal injury, loss of life, or property damage sustained in and about the Premises, the Building, or the Project; (b) attachment or discharge of a lien upon the Premises, the Building, or the Project; (c) Tenant's and/or Tenant's Permittees' use, generation, storage, release, threatened release, discharge or disposal of Hazardous Materials on, under, or about the Premises, the Building, or the Project; and (d) any default of Tenant under this Lease. The foregoing indemnity shall survive the expiration or earlier termination of this Lease. As used in this Lease, " Claims " means any claim, suit, proceeding, action, cause of action, responsibility, demand, judgment and execution, and attorneys' fees and costs related thereto or arising therefrom. Tenant further releases Landlord and any lender of Landlord, and their respective partners, trustees, officers, directors, shareholders, beneficiaries, agents and employees, from liability for any damages sustained by Tenant or any other person claiming by, through or under Tenant due to the Premises, or any part thereof or any appurtenances thereto becoming out of repair, or due to the happening of any accident, including but not limited to any damage caused by water, snow, windstorm, tornado, gas, steam, electrical wiring, sprinkler system, plumbing, heating and air conditioning apparatus and from any acts or omissions of co-tenants or other occupants of the Project. To the maximum extent permitted by law, Tenant agrees to use and occupy the Premises and to use such other portions of the Building as Tenant is herein given the right to use, at Tenant’s own risk. Notwithstanding the foregoing, Tenant shall not be required to

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 25

indemnify Landlord under this Section 35.1 to the extent of the gross negligence or willful misconduct of Landlord or its employees, agents, representatives or contractors.

35.2

Tenant hereby releases, discharges, and waives any right of recovery from Landlord and Landlord's agents, directors, officers, and employees, and Landlord hereby releases, discharges, and waives any right of recovery from Tenant and Tenant's Permittees, from all Claims, liabilities, losses, damages, expenses, or attorneys' fees and costs incurred arising from or caused by any peril required to be covered by insurance obtained by Landlord or Tenant under this Lease, or covered by insurance in connection with (a) property on the Premises, the Building, or the Project; (b) activities conducted on the Premises, the Building, or the Project; and (c) obligations to indemnify under this Lease, regardless of the cause of the damage or loss. Landlord and Tenant shall give their respective insurance carriers notice of these waivers and shall secure an endorsement from each carrier to the effect that the waivers given in this Article 35 shall not adversely affect or impair the policies of insurance or prejudice the right of the named insured on the policy to recover thereunder. These waivers apply only to the extent such Claims, liabilities, losses, damages, expenses, or attorneys' fees are covered by insurance required pursuant to this Lease. THE WAIVER CONTAINED IN THIS SECTION 35.2 WILL APPLY EVEN IF THE DAMAGE OR LOSS IS CAUSED BY THE NEGLIGENCE OR STRICT LIABILITY OF THE APPLICABLE PARTY, BUT NOT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PARTY.


35.3	Notwithstanding anything in this Lease to the contrary, Landlord shall not be responsible or liable to Tenant for any Claims for loss or damage caused by the acts or omissions of any persons occupying any space elsewhere in the Building.

ARTICLE 36. WAIVERS

36.1 LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THE PREMISES AND/OR THE PROJECT (INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS LEASE OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD TO ENTER INTO AND ACCEPT THIS LEASE. Landlord and Tenant agree and intend that this paragraph constitutes a written consent to waiver of trial by jury within the meaning of California Code of Civil Procedure Section 631(d)(2). Each party hereby authorizes and empowers the other to file this Section 36.1 and this Lease with the clerk or judge of any court of competent jurisdiction as a written consent to waiver of jury trial.

36.2 TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TENANT HEREBY WAIVES THE BENEFIT OF ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PREMISES INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR ANY PARTICULAR PURPOSE. LANDLORD HAS MADE NO REPRESENTATIONS, COVENANTS OR WARRANTIES WITH RESPECT TO THE PREMISES EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE.

36.3 TENANT, ON BEHALF OF ITSELF AND ANY AND ALL PERSONS CLAIMING THROUGH OR UNDER TENANT, DOES HEREBY WAIVE AND SURRENDER ALL RIGHT AND PRIVILEGE WHICH IT, THEY OR ANY OF THEM MIGHT HAVE UNDER OR BY REASON OF ANY PRESENT OR FUTURE

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 26

LAW, TO REDEEM THE PREMISES OR TO HAVE A CONTINUANCE OF THIS LEASE AFTER BEING DISPOSSESSED OR EJECTED THEREFROM BY PROCESS OF LAW OR UNDER THE TERMS OF THIS LEASE OR AFTER THE TERMINATION OF THIS LEASE.

ARTICLE 37. DISCLOSURE REGARDING PREMISES

As of the Effective Date, the Premises has not been inspected by a Certified Access Specialist.

ARTICLE 38. COMPLIANCE WITH ADA

Landlord and Tenant acknowledge that responsibility for compliance with the terms and conditions of Title III of the Americans with Disabilities Act (“ ADA ”) may be allocated between Landlord and Tenant. Notwithstanding anything to the contrary contained in the Lease, Landlord and Tenant agree that the responsibility for compliance with the ADA shall be allocated as follows: (i) Tenant shall be responsible for compliance with the provisions of Title III of the ADA with respect to the construction by Tenant of Tenant's Work, if any, and Tenant’s Alterations within the Premises, (ii) Landlord shall be responsible for compliance with the provisions of Title III of the ADA in providing all of Landlord’s Work required under this Lease, if any, and with respect to any structural matters within the Premises, provided that the same is not required as a result of Tenant’s specific use or Tenant’s Work, and (iii) Landlord shall be responsible for compliance with the provisions of Title III of the ADA with respect to the parking areas, sidewalks and walkways, together with all other Common Areas of the Building not included within the Premises and not otherwise part of or required as a result of Tenant’s Work or Tenant’s Alterations. Landlord and Tenant each agree that the allocation of responsibility for ADA compliance shall not require Landlord or Tenant to supervise, monitor, or otherwise review the compliance activities of the other with respect to its assumed responsibilities for ADA compliance as set forth herein. The allocation of responsibility for ADA compliance between Landlord and Tenant, and the obligations of Landlord and Tenant established by such allocations, shall supersede any other provisions of the Lease that may contradict or otherwise differ from the requirements of this section.

ARTICLE 39. SECURITY SYSTEM

Tenant shall have the right, at its election and its own cost and expense, to install a security system for the Premises.

[Signature pages follow]

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 27

IN WITNESS WHEREOF , the parties have duly executed this Lease as of the day and year first above written.



LANDLORD: 6759 MESA RIDGE ROAD HOLDINGS, LLC , a Maryland limited liability company By: U.S. Bank National Association, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee, successor to Wells Fargo Bank, N.A., as Trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-C25 (the “ Trust ”), its sole member By: CWCapital Asset Management LLC, solely in its capacity as Special Servicer to the Trust By: /s/THOMAS SHEARER Name: Thomas Shearer Title: Senior Vice President

[Signatures continue on following page]

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 28

TENANT:

INOVIO PHARMACEUTICALS, INC. ,

a Delaware corporation

By: /s/ PETER KIES

Name: Peter Kies

Title: CFO

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 29

EXHIBIT "A"

LAND

Parcel 1:

Lot 1 and Lot 2 of Carroll Mesa Business Park, in the City of San Diego, County of San Diego, State of California, according to Map thereof No. 13379, filed in the Office of the County Recorder of San Diego County, on December 11, 1996.

Parcel 2:

An exclusive easement to use fifty-five (55) reserved single parking spaces solely for the parking of motor vehicles, including a twenty-four (24) hour a day non-exclusive easement for pedestrian and vehicular ingress and egress to, from and within the Parking Easement Parcel over paths, roadways and driveways leading to and from the parking area, including an easement over all other areas of the IMSD Parcel necessary for vehicular and pedestrian ingress and egress to and from the Parking Easement Parcel, recorded July 30, 1998 as Filer No. 1998-0477054 of Official Records.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 30

EXHIBIT “A-1”

PREMISES

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 31

EXHIBIT "B"

RULES AND REGULATIONS

Tenant will refer all contractors, contractor's representatives and installation technicians rendering any service to Tenant, to Landlord for Landlord's supervision, approval and control before performance of any contractual service. This provision shall apply to all work performed in the Building including installations of telephones, telegraph equipment, electrical devices and attachments, and installations of any nature affecting doors, walls, woodwork, trim, windows, ceilings, equipment or any other physical portion of Building.


2.	No additional locks or bolts of any kind shall be placed upon any of the doors or windows by any Tenant nor shall any changes be made in existing locks or the mechanism thereof without consulting the Landlord.

Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of any merchandise or materials which require use of stairways, elevators or movement through Building entrance or lobby shall be restricted to hours designated by Landlord. All such movement shall be under supervision of Landlord and in the manner agreed between Tenant and Landlord by pre-arrangement before performance. Such pre-arrangement initiated by Tenant will include determination by Landlord and subject to its decision and control, as to the concerns which may prohibit any article, equipment or any other item from being brought into the Building. Tenant is to assume all risk as to damage to articles moved and injury to persons or public engaged or not engaged in such movement, including equipment, property, and personnel or Landlord if damaged or injured as a result of acts in connection with carrying out this service for Tenant from time of entering property to completion of work; and Landlord shall not be liable for acts of any person engaged in, or any damage or loss to any of said property or persons resulting from, any act in connection with such service performed for Tenant. Any hand trucks, carryalls or similar appliances used for the delivery or receipt of merchandise or equipment shall be equipped with rubber tires, side guards and such other safeguards as the Building shall reasonably require.

No signs, advertisements or notices shall be painted or affixed on or to any windows or doors, or other parts of the Building, except of such color, size and style and in such places, as shall be first approved in writing by Landlord. No part of the Building shall be defaced by Tenant. Building standard suite entrance signs to Premises shall be placed thereon by a contractor designated by Landlord at Landlord's expense.


5.	Landlord will not be responsible for lost or stolen personal property, equipment, money or jewelry from the Building, the Premises, or any other area on or about the Project, regardless of whether such loss occurs when these areas were locked against entry or not.

No birds or animals shall be brought into or kept in or about the Building except for purposes directly related to the Permitted Use and in accordance with all applicable laws. Tenant shall notify Landlord in writing if any animals in excess of 15 pounds will be housed in the Building, which notice shall include the type of animal, the method of containment, and the period of time such animal will be kept in the Building.


7.	Employees of Landlord shall not receive or carry messages for or to Tenant or other person, nor contract with or render free or paid services to Tenant or Tenant's agents, employees, or invitees.


8.	Landlord will not permit entrance to Tenant's offices by use of pass keys controlled by Landlord to any person at any time without written permission by Tenant, except employees, contractors, or service personnel directly supervised by Landlord.


9.	The entries, passages, doors, elevators and elevator doors (if provided), hallways or stairways shall not be blocked or obstructed; no rubbish, litter, trash, or material of any nature shall be placed,

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 32

emptied or thrown into these areas, and such areas shall not be used at any time except for ingress or egress by Tenant, Tenant's agents, employees or invitees to or from the Premises.


10.	Plumbing fixtures and appliances shall be used only for purposes for which constructed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed therein. Damage resulting to any such fixtures or appliances from misuse by Tenant, its employees, agents, visitors or licensees shall be paid by Tenant, and Landlord shall not in any case be responsible therefor.

11.

The Landlord desires to maintain the highest standards of environmental comfort and convenience for all Tenants. It will be appreciated if any undesirable conditions or lack of courtesy or attention are reported directly to the management. Tenant shall give immediate notice to the Landlord in case of accidents in the Premises or in the Common Areas or of defects therein or in any fixtures or equipment, or of any known emergency in the Building.


12.	No tenant shall make, or permit to be made, any noises disturbing to other tenants, interfere with occupants of this or neighboring buildings or premises, or those having business with them, whether by the use of any device, musical instrument, radio, unmusical noise, whistling, singing, or in any other way interfering with others' quiet enjoyment of the Building.

13.

Landlord shall have the right to make such other and further reasonable rules and regulations as in the judgment of Landlord may from time to time be needful for the safety, appearance, care and cleanliness of the Building and for the preservation of good order therein. Landlord shall not be responsible to Tenant for any violations of rules and regulations by other tenants, but Landlord shall use reasonable efforts to enforce such rules and regulations.


14.	All Tenants shall adhere to and obey all such parking control measures as may be placed into effect by the Landlord through the use of signs, identifying decals or other instructions. No bicycles or other vehicles of any kind shall be brought into or kept on the Premises except in designated areas specified for parking of such vehicles.

15.

No safes or other objects, larger or heavier than the Building is limited to carry, shall be brought into or installed on the Premises. The Landlord shall have the power to prescribe the weight and position of such safes or other objects which shall, if considered necessary by the Landlord, be required to be supported by such additional materials placed on the floor as the Landlord may direct, and at the expense of the Tenant.


16.	Landlord shall have no obligation to clean, repair, re-stretch, or replace carpeting.


17.	Names to be replaced on or removed from directories should be furnished to the manager in writing on Tenant's letterhead. All replacement directory strips will be at the expense of the Tenant. Landlord will determine size and uniformity of strips.

18.

All Tenants shall see that doors of their premises are closed and securely locked before leaving the Building and must observe strict care not to leave such doors open and exposed to the weather or other elements. Tenant shall exercise extraordinary care and caution that all water faucets or water apparatus are entirely shut off before the Tenant or the Tenant's employees leave the Building so as to prevent waste or damage, where controlled by Tenant.


19.	Canvassing, soliciting and peddling in the Building are prohibited. All Tenants shall cooperate to prevent the same.


20.	All holiday decorations and other temporary or special decorations must be flame-retardant. No live Christmas trees or candles are to be used throughout the Building. No decorations should be hung on the exterior windows or on exterior suite doors.


21.	There shall be no smoking permitted in the Building.


22.	The Premises shall not be used for any use that is disreputable or may draw protests.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 33

EXHIBIT "C"

PARKING RULES AND REGULATIONS

The parking rules & regulations are designed to assure our tenants and visitors safe use and enjoyment of the facilities. Please remove or hide any personal items of value from plain sight to avoid temptation leading to vandalism of vehicles. Please exercise added caution when using parking lot at night. Please keep vehicle locked at all times. Please report violations of these rules to the Landlord immediately. Please report any lights out or other possibly dangerous situations to the Landlord as soon as possible.

Restrictions


•	Damage caused by vehicles is the responsibility of vehicle owner.


•	Landlord is not responsible for theft or damage to any vehicle.


•	Landlord is not responsible for water damage from leaks in the garage or any surface parking area.

• Landlord is not responsible for damage due to height limitations of garage.


•	Vehicles not to exceed 2 miles per hour speed limit in the garage.

• Vehicles that leak excessive fluids will be required to protect parking surface.


•	Mechanical repairs to vehicles are not permitted on property.

• Large or oversize vehicles such as motor homes, boats or trailers are not permitted.

• No parking in fire lanes, loading zones or any other areas not designated as a parking space.

• Landlord, at Landlord's sole discretion, may add or modify the parking rules.

Violations of rules & regulations may result in towing from the Project. Towing from the Project can only be ordered by Landlord or Landlord's property manager. Charges for towing are to be paid by vehicle owner.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 34

EXHIBIT "D"

TENANT IMPROVEMENTS

1. Acceptance of Premises . Tenant accepts the Premises in their “AS-IS” condition on the date that this Lease is entered into, except as otherwise provided in Article 10 . Tenant agrees to accept the Premises, and Tenant shall complete the construction of the Premises to final form, including all utility connections (collectively, the “ Tenant’s Work ”) in accordance with the provisions of this Exhibit.

2. Space Plans .

(a) Preparation and Delivery . If Tenant intends to make alterations in the Premises, then, on or before the twentieth (20 ^th ) day following the Effective Date (the “ Space Plans Delivery Deadline ”), Tenant shall deliver to Landlord a space plan prepared by McFarlane Architects, Inc. (the “ Architect ”) depicting improvements to be installed in the Premises (the “ Space Plans ”). Landlord approves Burger Construction, Inc. as Tenant’s general contractor.

(b) Approval Process . Landlord shall notify Tenant whether it approves of the submitted Space Plans within five (5) Business Days after receipt. If Landlord disapproves of such Space Plans, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within three (3) Business Days after such notice, revise such Space Plans in accordance with Landlord’s objections and submit same to Landlord for its review and approval. Landlord shall notify Tenant in writing whether it approves of the resubmitted Space Plans within three (3) Business Days after its receipt thereof. This process shall be repeated until the Space Plans have been finally approved by Landlord and Tenant.

3. Working Drawings .

(a) Preparation and Delivery . On or before the one hundred fiftieth (150 ^th ) day following the date on which the Space Plans are approved by Landlord and Tenant, Tenant shall provide to Landlord for its approval final working drawings, prepared by the Architect, of all improvements that Tenant proposes to install in the Premises; such working drawings shall include the partition layout, ceiling plan, electrical outlets and switches, telephone outlets, drawings for any modifications to the mechanical and plumbing systems of the building, and detailed plans and specifications for the construction of the improvements called for under this Exhibit in accordance with all applicable laws (the “ Working Drawings ”).

(b) Approval Process . Landlord shall notify Tenant whether it approves of the submitted Working Drawings within five (5) Business Days after Tenant’s submission thereof. If Landlord disapproves of such Working Drawings, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within three (3) Business Days after such notice, revise such Working Drawings in accordance with Landlord’s objections and submit the revised Working Drawings to Landlord for its review and approval. Landlord shall notify Tenant in writing whether it approves of the resubmitted Working Drawings within five (5) Business Days after its receipt thereof. This process shall be repeated until the Working Drawings have been finally approved by Tenant and Landlord. Tenant will be responsible for the design, function and maintenance of all improvements, whether or not approved by Landlord. Landlord’s approval of the Working Drawings shall not constitute any representation or warranty as to the adequacy, efficiency, performance or desirability of the improvements reflected therein.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 35

Once the Working Drawings have been approved, Tenant shall cause the Tenant’s Work to be performed in accordance with the Working Drawings and applicable laws.

Landlord and Tenant acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor,” “owner-agent” or other similar relationships). Accordingly, all materialmen, contractors, artisans, mechanics, laborers and any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant or any other Tenant Party for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises, at any time from the date hereof until the end of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same.

4. Change Orders . Tenant may initiate changes in the Tenant’s Work. Each such change must receive the prior written approval of Landlord, such approval not to be unreasonably withheld or delayed; however: (1) if such requested change would adversely affect (in the reasonable discretion of Landlord) (a) the Building’s structure or the Building’s mechanical, electrical or plumbing systems or (b) the exterior appearance of the Building; or (2) if any such requested change might delay the Commencement Date, Landlord may withhold its consent in its sole and absolute discretion. Tenant shall, upon completion of the Tenant’s Work, furnish Landlord with an accurate architectural “as-built” plan of Work as constructed, which plan shall be incorporated into this Exhibit by this reference for all purposes. If Tenant requests any changes to Tenant’s Work described in the Space Plans or the Working Drawings, then such increased costs and any additional design costs incurred in connection therewith as the result of any such change shall be added to the Total First Floor Construction Costs or Total Second Floor Construction Costs, as the case may be (as such terms are defined below).

5. First Floor Costs . The entire cost of performing the Tenant’s Work in the First Floor Space (including design of the Work and preparation of the Working Drawings, costs of construction labor and materials, electrical usage during construction, additional janitorial services, general tenant signage, and related taxes and insurance costs, all of which costs are herein collectively called the “ Total First Floor Construction Costs ”) shall be paid by Tenant. Landlord shall reimburse Tenant for a portion of the Total First Floor Construction Costs: (i) limited to the lesser of (A) actual construction costs incurred by third parties on behalf of Tenant in its construction of Tenant’s Work in the First Floor Space; and (B) an amount up to, but not exceeding, $45.00 per rentable square foot of the First Floor Space ($1,570,320.00, the “ First Floor Allowance ”); and (ii) conditioned upon Landlord’s receipt of written notice from Tenant that Tenant’s Work in the First Floor Space has been completed and accepted by Tenant. Landlord shall make payment of the First Floor Allowance (limited as described above) within thirty (30) days following the later of the Commencement Date and Tenant’s delivery to Landlord of: (a) third-party invoices for costs incurred by Tenant in constructing Tenant’s Work in the First Floor Space; (b) evidence that Tenant has paid the invoices for such costs; (c) lien waivers from any contractor or subcontractor who has constructed any portion of Tenant’s Work in the First Floor Space or any materialman who has supplied materials used or incorporated into any portion of such Tenant’s Work; (d) the first monthly rental payment; (e) the Certificate of Occupancy for the Premises; and (f) an executed Certification of Commencement Date in the form attached to the Lease as Exhibit E .

Landlord will allow Tenant to use a portion of the First Floor Allowance, not to exceed $174,480.00, for reimbursement of Tenant’s actual expenses for furniture, fixtures and equipment for the Premises and for actual expenses of moving into the Premises (“ Furniture and Moving Expenses ”) and for no other purpose. Any such portion of the First Floor Allowance shall be paid by Landlord within thirty (30) days after the receipt of (i) third-party invoices from Tenant evidencing the actual costs incurred by Tenant for Furniture

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 36

and Moving Expenses, and (ii) evidence that Tenant has paid such invoices. All Furniture and Moving Expenses in excess of $174,480.00 shall be at Tenant’s sole cost and expense.

All bills for Tenant’s Work in the First Floor Space and for Furniture and Moving Expenses must be submitted within twelve (12) months after the Effective Date, and Landlord will make no further payments related thereto after such twelve-month period. Tenant shall reimburse Landlord for the construction management fee Landlord pays its property manager in connection with the oversight of the construction of the Tenant’s Work in the First Floor Space in the amount of 1.5% of the First Floor Allowance. Such fee shall be deducted by Landlord from the First Floor Allowance.

6. Stairwell Allowance . Landlord shall contribute an additional amount up to, but not exceeding, $100,000.00 to fund the actual construction costs incurred by third parties on behalf of Tenant to install an internal stairwell connecting the first and second floors of the Premises (the “ Stairwell Allowance ”). Installation of the stairwell shall be considered part of Tenant’s Work, and payment of the Stairwell Allowance, as limited above, shall be paid along with the First Floor Allowance, subject to satisfaction of the conditions set forth in Section 5 hereof. If the costs to complete the stairwell are less than $100,000.00, Tenant may apply the remaining Stairwell Allowance to other improvements to the Premises, subject to the preceding paragraph requiring all bills to be submitted within twelve (12) months after the Effective Date. Tenant shall reimburse Landlord for the construction management fee Landlord pays its property manager in connection with the oversight of the construction of the internal stairwell in the amount of $1,500.00. Such fee shall be deducted by Landlord from the Stairwell Allowance.

7. Second Floor Costs . The entire cost of performing the Tenant’s Work in the Second Floor Space (including design of the Work and preparation of the Working Drawings, costs of construction labor and materials, electrical usage during construction, additional janitorial services, general tenant signage, and related taxes and insurance costs, all of which costs are herein collectively called the “ Total Second Floor Construction Costs ”) shall be paid by Tenant. Landlord shall reimburse Tenant for a portion of the Total Second Floor Construction Costs: (i) limited to the lesser of (A) actual construction costs incurred by third parties on behalf of Tenant in its construction of Tenant’s Work in the Second Floor Space; and (B) an amount up to, but not exceeding, $30.00 per rentable square foot of the Second Floor Space ($483,720.00, the “ Second Floor Allowance ”); and (ii) conditioned upon Landlord’s receipt of written notice from Tenant that Tenant’s Work in the Second Floor Space has been completed and accepted by Tenant. Landlord shall make payment of the Second Floor Allowance (limited as described above) within thirty (30) days following the later of (a) the last day of the twenty-fourth (24) full calendar month after the Commencement Date, and (b) Tenant’s delivery to Landlord of: (a) third-party invoices for costs incurred by Tenant in constructing Tenant’s Work in the Second Floor Space; (b) evidence that Tenant has paid the invoices for such costs; (c) lien waivers from any contractor or subcontractor who has constructed any portion of Tenant’s Work in the Second Floor Space or any materialman who has supplied materials used or incorporated into any portion such Tenant’s Work; and (d) the Certificate of Occupancy for the Second Floor Space (collectively, the “ Allowance Conditions ”). All bills for Tenant’s Work in the Second Floor Space must be submitted within twenty-four (24) months after the Effective Date, and Landlord will make no further payments related to Tenant’s Work in the Second Floor Space after such 24-month period. Tenant shall reimburse Landlord for the construction management fee Landlord pays its property manager in connection with the oversight of the construction of the Tenant’s Work in the Second Floor Space in the amount of 1.5% of the Second Floor Allowance. Such fee shall be deducted by Landlord from the Second Floor Allowance.

In the event that all Allowance Conditions have been fully satisfied and (i) Landlord fails to reimburse Tenant for the Second Floor Allowance without just cause and within thirty (30) days after Tenant’s written

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 37

request or demand therefor (the “ First Notice ”), (ii) Tenant gives Landlord a second written notice (the “ Second Notice ”) and request or demand for payment of the Second Floor Allowance following the expiration of thirty (30) days after the date of the First Notice, and (iii) Landlord fails to reimburse Tenant for the Second Floor Allowance without just cause and within thirty (30) days following the Second Notice, then Tenant may offset from Tenant’s rental obligations under the Lease an amount not to exceed 50% of the then-current Monthly Minimum Rental (the “ Offset Amount ”) and apply such Offset Amount to the unpaid balance of the Second Floor Allowance until paid in full.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 38

EXHIBIT "E"

CONFIRMATION OF COMMENCEMENT DATE

______________, 20__

INOVIO PHARMACEUTICALS, INC.

__________________________


Re:	Lease Agreement (the " Lease ") dated October ___, 2016, between 6759 MESA RIDGE ROAD HOLDINGS, LLC , a Maryland limited liability company (" Landlord "), and INOVIO PHARMACEUTICALS, INC. , a Delaware corporation (" Tenant "). Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Lease.

Ladies and Gentlemen:

Landlord and Tenant agree as follows:

1. Condition of Premises . Tenant has accepted possession of the Premises pursuant to the Lease in its “as-is, where-is” condition, and Tenant acknowledges that the Premises are suitable for the Permitted Use.

2. Commencement Date . The Commencement Date of the Lease is __________, 20__.

3. Expiration Date . The Lease Term is scheduled to expire on the last day of the 120 ^th full calendar month of the Lease Term, which date is ______________, 20__.

4. Contact Person . Tenant's contact person in the Premises is:

Attention:

Telephone:

Telecopy:

5. Ratification . Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, and (b) Tenant has no claims, counterclaims, set-offs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.

6. Binding Effect; Governing Law . Except as modified hereby, the Lease shall remain in full effect and this letter shall be binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between the terms of this letter and the terms of the Lease, the

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 39

terms of this letter shall prevail. This letter shall be governed by the laws of the state in which the Premises are located.

Please indicate your agreement to the above matters by signing this letter in the space indicated below and returning an executed original to us.



Agreed and accepted: INOVIO PHARMACEUTICALS, INC. , a Delaware corporation By: Name: Title:	Sincerely, _________________ a _________________ By: Name: Title:

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 40

EXHIBIT "F"

MOISTURE AND MOLD CONTROL INSTRUCTIONS

Because exercising proper ventilation and moisture control precautions will help maintain Tenant’s comfort and prevent mold growth in the Premises, Tenant agrees to adopt and implement the following guidelines, to avoid enveloping excessive moisture or mold growth:

1. Report any maintenance problems involving water, moist conditions, or mold to the Property Manager promptly and conduct its required activities in a manner that prevents unusual moisture conditions or mold growth.

2. Do not block or inhibit the flow of return or make up air into the HVAC system. Maintain the Premises at a consistent temperature and humidity level in accordance with the Property Manager’s instructions.

3. Regularly conduct janitorial activities, especially in bathrooms, kitchens, and janitorial spaces, to remove mildew and prevent or correct moist conditions.

4. Maintain water in all drain taps at all times.

Dated: October 10, 2016

TENANT:

INOVIO PHARMACEUTICALS, INC. ,

a Delaware corporation

By: /s/PETER KIES

Name:Peter Kies

Title:CFO

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 41

EXHIBIT "G"

RENEWAL OPTION

If: (i) Tenant is not in default past applicable notice and cure periods at the time of exercising the renewal option and at the commencement of the renewal term; and (ii) the original Tenant has not assigned the Lease or sublet the Premises; at the time of such election and at the commencement of the renewal term, then Tenant may renew this Lease for two (2) additional consecutive periods of five (5) years each, by delivering written notice of the exercise thereof (the “ Renewal Notice ”) to Landlord not earlier than twelve (12) months nor later than nine (9) months before the expiration of the then-current term. The Minimum Monthly Rent payable for each month during such extended Lease Term shall be the prevailing rental rate at the commencement of such extended Lease Term for renewals of space in the Building of equivalent quality, size, utility and location, with the length of the extended Lease Term and the credit standing of Tenant to be taken into account (the “ Prevailing Rental Rate ”). Within thirty (30) days after receipt of Tenant’s Renewal Notice, Landlord shall deliver to Tenant written notice of the Prevailing Rental Rate and shall advise Tenant of the required adjustment to Minimum Monthly Rent, if any, and the other terms and conditions offered. Tenant shall, within ten (10) days after receipt of Landlord’s notice, notify Landlord in writing whether Tenant accepts or rejects Landlord’s determination of the Prevailing Rental Rate. If Tenant and Landlord are unable to agree on a mutually acceptable Prevailing Rental Rate not later than sixty (60) days prior to the expiration of the then-current term, then Landlord and Tenant shall each appoint a qualified broker doing business in the area, in turn those two independent brokers shall appoint a third broker and the Prevailing Rental Rate for the Premises as of the expiration of the then-current term shall be the rate in the middle of the rates as determined by the three (3) brokers. Landlord and Tenant shall equally share in the expense of this appraisal. Tenant shall, within five (5) Business Days of such determination of the Prevailing Rental Rate, notify Landlord in writing whether Tenant elects to renew the Lease. In the event Tenant timely elects to renew the Lease, on or before the commencement date of the applicable extended Lease Term, Landlord and Tenant shall execute an amendment to this Lease extending the Lease Term on the same terms provided in this Lease, except as follows:

1. Minimum Monthly Rent shall be adjusted to the Prevailing Rental Rate for each year of the extended Lease Term;

2. After the second renewal term described above, Tenant shall have no further renewal options unless expressly granted by Landlord in writing; and

3. Landlord shall lease to Tenant the Premises in their then-current condition, and Landlord shall not provide to Tenant any allowances (e.g., moving allowance, construction allowance, and the like) or other tenant inducements.

If Tenant fails to timely notify Landlord in writing that Tenant accepts or rejects Landlord’s determination of the Prevailing Rental Rate, time being of the essence with respect thereto, Tenant’s rights under this Exhibit shall terminate and Tenant shall have no right to renew this Lease.

Tenant’s rights under this Exhibit shall terminate if: (1) this Lease or Tenant’s right to possession of the Premises is terminated; (2) Tenant assigns any of its interest in this Lease or sublets any portion of the Premises; (3) Tenant fails to timely exercise its option under this Exhibit, time being of the essence with respect to Tenant’s exercise thereof; or (4) Tenant commits a monetary Event of Default under the Lease.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 42

EXHIBIT "H"

EARLY TERMINATION OPTION

Tenant shall have a one-time option to terminate this Lease (the “ Termination Option ”) effective as of November 30, 2023 (such date being referred to as the “ Early Termination Date ”), provided Tenant gives notice thereof to Landlord not less than nine (9) months prior to the Early Termination Date and provided no monetary Event of Default by Tenant exists at the time of the giving of such notice nor on the Early Termination Date. Additionally, Tenant’s right to terminate hereunder is conditioned upon: (a) the payment in full by Tenant of all Rent through and including the Early Termination Date; and (b) at the time Tenant delivers notice to Landlord that it is exercising its Termination Option hereunder, Tenant shall pay Landlord the cash sum equal to: (i) two (2) months of Minimum Monthly Rent at the rate in effect on the Early Termination Date; plus (ii) the unamortized First Floor Allowance, Stairwell Allowance, Second Floor Allowance and leasing commissions paid by Landlord in connection with this Lease (collectively, the “ Termination Payment ”). If Tenant has timely exercised its Termination Option, then after Landlord’s receipt of the Termination Payment, and so long as Tenant has surrendered the Premises in the condition required under this Lease, neither party shall have any rights, liabilities or obligations under this Lease for the period accruing after the Early Termination Date, except those which, by the provisions of this Lease, expressly survive the termination of this Lease. If Tenant fails to timely exercise its Termination Option or fails to timely pay the Termination Payment, time being of the essence, then Tenant’s rights under this Exhibit shall be null and void.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 43

EXHIBIT "I”

ROOF ACCESS; COMMUNICATIONS EQUIPMENT

During the Lease Term, Tenant shall have the right to install, maintain and operate a satellite dish and related communications equipment and/or supplemental HVAC equipment (the “ Equipment ”) on the roof of the Premises, subject to the following terms and conditions:

Tenant shall provide Landlord such information as Landlord shall reasonably request regarding the Equipment, including plans and specifications of the Equipment and the proposed installation and placement of the Equipment. The Equipment and the proposed installation and placement shall be subject to Landlord’s approval and to the availability of space on the roof for such Equipment, and in no event shall the Equipment or the installation thereof require any structural reinforcement of the Building or the roof, interfere with mechanical, electrical, or plumbing systems serving the Building, or interfere with other antennas or communications equipment or other equipment or structures now or hereafter located on the roof of the Building.


b.	If Landlord approves the information set forth in (a) above, Landlord shall provide Tenant with written notice of its approval or disapproval of the installation within fifteen (15) days of Tenant’s request.


c.	The Equipment shall be installed by a contractor approved in advance by Landlord and which contractor will obtain such insurance as may reasonably be required by Landlord. Failure of the contractor to obtain and maintain such insurance shall be an Event of Default under this Lease. Landlord shall have the right to inspect the installation and any maintenance of the Equipment.

If the installation of the Equipment damages the roof or any other portion of the Building in any manner, Tenant shall be responsible for repairing such damage at its cost and expense. Tenant hereby agrees to indemnify, defend and hold Landlord harmless from any loss, damage, liability or cause of action resulting from Tenant’s installation, maintenance and operation of the Equipment. The foregoing indemnity shall survive the expiration or earlier termination of the Lease.


e.	The installation, maintenance and operation of the Equipment shall be pursuant to all of the terms and conditions of this Lease. Tenant shall obtain and maintain any additional insurance that Landlord may reasonably require with respect to the installation and operation of the Equipment and furnish Landlord with copies of such insurance policies.

Any additional electrical usage required by the installation, maintenance or operation of the Equipment shall be paid by Tenant on demand. Landlord shall have the right at Tenant’s expense to install a separate meter to measure such electrical usage. The operation of the Equipment on the roof of the Building shall be subject to the rights of any existing or future use of the roof of the Building, including other antennas or communications equipment. Landlord shall have the right to cause Tenant to relocate the Equipment in the event that in Landlord’s reasonable determination the operation of such Equipment interferes with the use of any other Equipment now or hereafter installed on the roof of the Building or if required by applicable Law. Landlord shall have the right to perform maintenance and repairs on the roof and shall use reasonable efforts to avoid disrupting Tenant’s operation of the Equipment. In the event Landlord or its agents, employees or contractors causes

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 44

damage to the Equipment as a result of its gross negligence or willful misconduct, Landlord shall promptly cause the Equipment to be repaired at its expense. All other repairs shall be at Tenant’s expense.

Tenant shall be responsible for compliance of the Equipment with all applicable laws, including regulations of the Federal Communication Commission, zoning laws, and Building insurance requirements. Tenant acknowledges that Landlord has made no representations or warranties to Tenant that the Equipment is permitted under applicable zoning ordinances. Upon Landlord’s written request, Tenant shall furnish evidence to Landlord of the compliance of the Equipment with the applicable zoning ordinances prior to and following installation.


h.	In the event the installation or maintenance of the Equipment adversely impacts other portions of the Building or Project, including Common Areas and space leased to other tenants, Landlord shall have the right to approve all such work and at its option to perform all such work at Tenant’s expense.

At the expiration or earlier termination of this Lease, Tenant shall remove the Equipment at its expense and repair the roof in a manner reasonably satisfactory to Landlord. At the time Tenant removes the Equipment from the roof, Tenant shall hire a contractor approved in advance in writing by Landlord to remove the Equipment. Tenant shall be responsible for repairing the roof and for all damages that may occur to the Building or property of other tenants due to such removal, at its own cost and expense, and hereby agrees to indemnify, defend and hold Landlord harmless for the same. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 45

EXHIBIT "J”

OPERATING COSTS EXCLUSIONS

Operating Costs shall not include the following:

(a) any leasing commissions;

(b) expenses that relate to preparation of rental space for a tenant including costs of improvements, renovations or alterations of tenants’ premises (including permit, license and inspection costs);

(c) expenses of initial development and construction, including grading, paving, landscaping and decorating (as distinguished from maintenance, repair and replacement of the foregoing);

(d) legal expenses relating to other tenants, including in negotiating and enforcing tenant leases or disputes with prospective tenants;

(e) costs of repairs to the extent actually reimbursed by payment of insurance proceeds or from a third party, including, without limitation, contractor’s warranties, received by Landlord;

(f) principal, fees, points, interest and amortization on mortgages or other debt instruments, or ground lease payments, if any (provided that interest upon a government assessment or improvement bond payable in installments shall constitute an Operating Cost;

(g) salaries of executive officers of Landlord;

(h) depreciation claimed by Landlord for tax purposes (provided that this exclusion of depreciation is not intended to delete from Operating Costs actual costs of repairs and replacements and reasonable reserves in regard thereto;

(i) income, excess profits, excise, franchise, estate, succession, inheritance, gift and transfer taxes;

(j) all items and services for which Tenant or any other tenant of the Building or the Project reimburses Landlord (other than through the pass-through of Operating Costs) or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;

(k) any costs of capital improvements, capital repairs, capital equipment or capital tools, all as determined, permitted and limited under generally accepted accounting principles, consistently applied, except the cost of any capital improvements or other costs (A) which are intended as a labor-saving device or to effect other economies in the operation or maintenance of the Project, (B) made to the Project after the Commencement Date that are required under any governmental law or regulation but which were not previously required, or (C) for the refurbishment or replacement of Project improvements or amenities; provided, however, that if any such cost described in (A), (B) or (C) above is a capital expenditure, such cost shall be amortized (including interest on the unamortized cost) over its useful life as Landlord shall reasonably determine;

(l) costs incurred by Landlord due to the violation by Landlord or any other tenant of the Building of the terms and conditions of any lease of space in the Building (provided, however, that in no event shall Landlord be required to provide Tenant with copies of any leases with other tenants);

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 46

(m) overhead and profit increments paid to Landlord or to subsidiaries or affiliates of Landlord for services in the Building to the extent the same exceeds the cost of such services rendered at the same level of service for comparable buildings by unaffiliated third parties on a competitive basis (such exclusion shall not be deemed to apply to property management fees);

(n) Landlord’s general corporate overhead and general administrative expenses;

(o) costs, fines, or fees incurred by Landlord due to violations of any federal, state or local law, statute or ordinance, or any rule, regulation, judgment or decree of any governmental rule or authority (provided, however that such exclusion shall not apply if such expense was due to Tenant’s default under this Lease);

(p) any costs incurred to remove or abate any Hazardous Materials existing in, on, under or about the Project or to otherwise comply with any laws, regulations, ordinances or orders imposed by any governmental authority relating to environmental conditions or remediation or Hazardous Materials and any restoration in connection therewith (but costs of general removal and/or cleanup of any mold found in the Complex shall not be excluded), to the extent such costs do not result from Tenant’s use or occupancy of the Premises;

(q) costs to remedy defects in the original design, materials or workmanship of the Building; and

(r) advertising expenditures.

SUMMIT RIDGE BUSINESS PARK/INOVIO PHARMACEUTICALS, INC. – PAGE 47

Exhibit 10.2

Effective Date: August 17, 2016

GENEOS THERAPEUTICS, INC.

2016 EQUITY INCENTIVE PLAN

The purpose of the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan is to provide (i) designated employees of GENEOS Therapeutics, Inc. (the “Company”) and its parents and subsidiaries, (ii) certain consultants and advisors who perform services for the Company or its parents or subsidiaries and (iii) non-employee members of the Board of Directors of the Company (the “Board”) with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards. The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefitting the Company’s stockholders, and will align the economic interests of the participants with those of the stockholders.

1. Administration .

(a) Committee . This Plan shall be administered and interpreted by the Board or by a committee consisting of members of the Board, which shall be appointed by the Board. After an initial public offering of the Company’s stock as described in Section 18(b) (a “Public Offering”), this Plan shall be administered by a committee of Board members, which may consist of “outside directors” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and related Treasury regulations, and “non-employee directors” as defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, the Board may ratify or approve any grants as it deems appropriate, and the Board shall approve and administer all grants made to non-employee directors. The committee may delegate authority to one or more subcommittees as it deems appropriate. To the extent that a committee or subcommittee administers this Plan, references in this Plan to the “Board” shall be deemed to refer to the committee or subcommittee.

(b) Board Authority . The Board shall have the sole authority to (i) determine the individuals to whom grants shall be made under this Plan, (ii) determine the type, size and terms of the grants to be made to each such individual, (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any previously issued grant, and (v) deal with any other matters arising under this Plan.

(c) Board Determinations . The Board shall have full power and authority to administer and interpret this Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing this Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Board’s interpretations of this Plan and all determinations made by the Board pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in this Plan or in any awards granted hereunder. All powers of the Board shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of this Plan and need not be uniform as to similarly situated individuals.

(d) Delegation to Officers . To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Options (as defined in Section 2 below) to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under this Plan as the Board may determine, provided that the Board shall fix the terms of the Options to be granted by such officers (including the exercise price of such Options, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to Options that the officers may grant; provided further, however, that no officer shall be authorized to grant Options to himself or herself.

2. Grants . Awards under this Plan may consist of grants of incentive stock options as described in Section 5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred to as “Options”) and stock awards as described in Section 6 (“Stock Awards”) (hereinafter collectively referred to as “Grants”). All Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Board deems appropriate and as are specified in writing by the Board to the individual in a grant instrument or an amendment to the grant instrument (the “Grant Instrument”). All Grants shall be made conditional upon the Grantee’s acknowledgement, in writing or by acceptance of the Grant, that all decisions and determinations of the Board shall be final and binding on the Grantee, his or her beneficiaries and any other person having or claiming an interest under such Grant. The Board shall approve the form and provisions of each Grant Instrument. Grants under a particular Section of this Plan need not be uniform as among the grantees.

3. Shares Subject to This Plan .

(a) Shares Authorized . Subject to adjustment as described below, the aggregate number of shares of common stock of the Company (“Company Stock”) that may be issued under this Plan is 2,000,000 shares, all of which may be granted as Incentive Stock Options. After a Public Offering, the maximum aggregate number of shares of Company Stock that shall be subject to Grants made under this Plan to any individual during any calendar year shall be 1,000,000 shares, subject to adjustment as described below. Shares issued under this Plan may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company on the open market for purposes of this Plan. If and to the extent Options granted under this Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised or if any Stock Awards (including restricted Stock Awards received upon the exercise of Options) are forfeited, the shares subject to such Grants shall again be available for purposes of this Plan.

(b) Adjustments . If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation, (iii) by reason of a reclassification or change in par value, or (iv) by reason of any other extraordinary or unusual event affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of Company Stock available for Grants, the maximum number of shares of Company Stock that any individual participating in this Plan may be granted in any year, the number of shares covered by outstanding Grants, the kind of shares issued under this Plan, and the price per share of such Grants shall be appropriately adjusted by the Board to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of Company Stock to preclude, to the extent practicable, the

enlargement or dilution of rights and benefits under such Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. Any adjustments determined by the Board shall be final, binding and conclusive.

4. Eligibility for Participation .

(a) Eligible Persons . All employees of the Company and its parents or subsidiaries (“Employees”), including Employees who are officers or members of the Board, and members of the Board who are not Employees (“Non-Employee Directors”) shall be eligible to participate in this Plan. Consultants and advisors who perform services for the Company or any of its parents or subsidiaries (“Key Advisors”) shall be eligible to participate in this Plan if the Key Advisors render bona fide services to the Company or its parents or subsidiaries, the services are not in connection with the offer and sale of securities in a capital-raising transaction, and the Key Advisors do not directly or indirectly promote or maintain a market for the Company’s securities.

(b) Selection of Grantees . The Board shall select the Employees, Non-Employee Directors and Key Advisors to receive Grants and shall determine the number of shares of Company Stock subject to a particular Grant in such manner as the Board determines. Employees, Key Advisors and Non-Employee Directors who receive Grants under this Plan shall hereinafter be referred to as “Grantees.”

5. Granting of Options .

(a) Number of Shares . The Board shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees, Non-Employee Directors and Key Advisors.

(b) Type of Option and Price .

(i) The Board may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock Options that are not intended so to qualify or any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein. Incentive Stock Options may be granted only to employees of the Company or its parents or subsidiaries, as defined in Section 424 of the Code. Nonqualified Stock Options may be granted to Employees, Non-Employee Directors and Key Advisors.

(ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be determined by the Board and may be equal to or greater than the Fair Market Value (as defined below) of a share of Company Stock on the date the Option is granted; provided, however, that (x) the Exercise Price of an Incentive Stock Option shall be equal to, or greater than, the Fair Market Value of a share of Company Stock on the date the Incentive Stock Option is granted and (y) an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the Fair Market Value of Company Stock on the date of grant.

(iii) If the Company Stock is publicly traded, then the Fair Market Value per share shall be determined as follows: (x) if the principal trading market for the Company Stock is a national securities exchange, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, or (y) if the Company Stock is not principally traded on such exchange or market, the mean between the last reported “bid” and “asked”

prices of Company Stock on the relevant date, as reported on Nasdaq or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Board determines. If the Company Stock is not publicly traded or, if publicly traded, is not subject to reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value per share shall be as determined by the Board.

(c) Option Term . The Board shall determine the term of each Option. The term of any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, or any parent or subsidiary of the Company, may not have a term that exceeds five years from the date of grant.

(d) Exercisability of Options .

(i) Options shall become exercisable in accordance with such terms and conditions, consistent with this Plan, as may be determined by the Board and specified in the Grant Instrument. The Board may accelerate the exercisability of any or all outstanding Options at any time for any reason.

(ii) The Board may provide in a Grant Instrument that the Grantee may elect to exercise part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall be restricted shares and shall be subject to a repurchase right in favor of the Company during a specified restriction period, with the repurchase price equal to the lesser of (i) the Exercise Price or (ii) the Fair Market Value of such shares at the time of repurchase, or such other restrictions as the Board deems appropriate.

(e) Grants to Non-Exempt Employees . Notwithstanding the foregoing, Options granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, shall have an Exercise Price not less than the Fair Market Value of the Company Stock on the date of grant, and may not be exercisable for at least six months after the date of grant (except that such Options may become exercisable, as determined by the Board, upon the Grantee’s death, Disability or retirement, or upon a Change of Control or other circumstances permitted by applicable regulations).

(f) Termination of Employment, Disability or Death .

(i) Except as provided below, an Option may only be exercised while the Grantee is employed by, or providing service to, the Employer (as defined below) as an Employee, Key Advisor or member of the Board. In the event that a Grantee ceases to be employed by, or provide service to, the Employer for any reason other than Disability, death, or termination for Cause, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90 days after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(ii) In the event the Grantee ceases to be employed by, or provide service to, the Employer on account of a termination for Cause by the Employer, any Option held by the Grantee shall terminate as of the date the Grantee ceases to be employed by, or provide service to, the Employer. In addition, notwithstanding any other provisions of this Section 5, if the Board determines that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is employed by, or providing

service to, the Employer or after the Grantee’s termination of employment or service, any Option held by the Grantee shall immediately terminate, and the Grantee shall automatically forfeit all shares underlying any exercised portion of an Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture.

(iii) In the event the Grantee ceases to be employed by, or provide service to, the Employer because the Grantee is Disabled, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options which are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(iv) If the Grantee dies while employed by, or providing service to, the Employer or within 90 days after the date on which the Grantee ceases to be employed or provide service on account of a termination specified in Section 5(f)(i) above (or within such other period of time as may be specified by the Board), any Option that is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(v) For purposes of this Section 5(f) and Section 6:

(A) The term “Employer” shall include the Company and its parent and subsidiary corporations or other entities, as appropriate and as determined by the Board.

(B) “Employed by, or provide service to, the Employer” shall mean employment or service as an Employee, Key Advisor or member of the Board (so that, for purposes of exercising Options and satisfying conditions with respect to Stock Awards, a Grantee shall not be considered to have terminated employment or service until the Grantee ceases to be an Employee, Key Advisor or member of the Board), unless the Board determines otherwise.

(C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of section 22(e)(3) of the Code, within the meaning of the Employer’s long-term disability plan applicable to the Grantee, or as otherwise determined by the Board.

(D) “Cause” shall mean, except to the extent specified otherwise by the Board, a finding by the Board that the Grantee (i) has breached his or her employment or service contract with the Employer, (ii) has engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (iii) has disclosed trade secrets or confidential information of the Employer to persons not entitled to receive such information, (iv) has breached any written noncompetition or nonsolicitation agreement between the Grantee and the Employer or (v) has engaged in such other behavior detrimental to the interests of the Employer as the Board determines.

(g) Exercise of Options . A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company with payment of the Exercise Price: provided, however, that the Committee shall have the power to permit: (i) the exercise of unvested Options, or portions thereof, for the purchase of shares of restricted Common Stock subject to a repurchase right in favor of the Company, with the repurchase price being equal to the lesser of (x) the original purchase price or (y) the Fair Market Value of the shares on the date of repurchase, or to any other restrictions as the Committee deems to be appropriate, and (ii) the acceleration of previously established exercise terms, in each case upon such circumstances and subject to such terms and conditions as the Committee shall determine. The Grantee shall pay the Exercise Price for an Option as specified by the Board (I) in cash, (II) with the approval of the Board, by delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in connection with the exercise of an Option, subject to such restrictions as the Board deems appropriate) and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by the Board) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the Exercise Price, (III) after a Public Offering, payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or (IV) by such other method as the Board may approve. The Board may authorize loans by the Company to Grantees in connection with the exercise of an Option, upon such terms and conditions as the Board, in its sole discretion, deems appropriate. Shares of Company Stock used to exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option. The Grantee shall pay the Exercise Price and the amount of any withholding tax due (pursuant to Section 7) at the time of exercise.

(h) Limits on Incentive Stock Options . Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under this Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or a parent or subsidiary (within the meaning of section 424(f) of the Code) of the Company.

6. Stock Awards . The Board may issue shares of Company Stock to an Employee, Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the Board deems appropriate. The following provisions are applicable to Stock Awards:

(a) General Requirements . Shares of Company Stock issued pursuant to Stock Awards may be issued for consideration or for no consideration, and subject to restrictions or no restrictions, as determined by the Board. The Board may establish conditions under which restrictions on Stock Awards shall lapse over a period of time or according to such other criteria as the Board deems appropriate. The period of time during which the Stock Award will remain subject to restrictions will be designated in the Grant Instrument as the “Restriction Period.”

(b) Number of Shares . The Board shall determine the number of shares of Company Stock to be issued pursuant to a Stock Award and the restrictions applicable to such shares.

(c) Requirement of Employment or Service . If the Grantee ceases to be employed by, or provide service to, the Employer (as defined in Section 5(f)) during a period designated in the Grant Instrument as the Restriction Period, or if other specified conditions are not met, the Stock Award shall terminate as to all shares covered by the award as to which the restrictions have not lapsed, and those

shares of Company Stock must be immediately returned to the Company. The Board may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(d) Restrictions on Transfer and Legend on Stock Certificate . During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of the Stock Award except to a successor under Section 8(a). Each certificate for Stock Awards shall contain a legend giving appropriate notice of the restrictions in the Grant. The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Board may determine that the Company will not issue certificates for Stock Awards until all restrictions on such shares have lapsed, or that the Company will retain possession of certificates for Stock Awards until all restrictions on such shares have lapsed.

(e) Right to Vote and to Receive Dividends . During the Restriction Period, the Grantee shall have the right to vote shares subject to Stock Awards and to receive any dividends or other distributions paid on such shares, subject to any restrictions deemed appropriate by the Board.

(f) Lapse of Restrictions . All restrictions imposed on Stock Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Board. The Board may determine, as to any or all Stock Awards, that the restrictions shall lapse without regard to any Restriction Period.

7. Withholding of Taxes .

(a) Required Withholding . All Grants under this Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The Employer may require that the Grantee or other person receiving or exercising Grants pay to the Employer the amount of any federal, state or local taxes that the Employer is required to withhold with respect to such Grants, or the Employer may deduct from other wages paid by the Employer the amount of any withholding taxes due with respect to such Grants.

(b) Election to Withhold Shares . If the Board so permits, a Grantee may elect to satisfy the Employer’s income tax withholding obligation with respect to a Grant by having shares withheld up to an amount that does not exceed the Grantee’s minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. The election must be in a form and manner prescribed by the Board and may be subject to the prior approval of the Board.

8. Transferability of Grants .

(a) Nontransferability of Grants . Except as provided below, only the Grantee may exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Grants other than Incentive Stock Options, if permitted in any specific case by the Board, pursuant to a domestic relations order or otherwise as permitted by the Board. When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and distribution.

(b) Transfer of Nonqualified Stock Options . Notwithstanding the foregoing, the Board may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent

with applicable securities laws, according to such terms as the Board may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

9. Right of First Refusal; Repurchase Right .

(a) Offer . Prior to a Public Offering, if at any time an individual desires to sell, encumber, or otherwise dispose of shares of Company Stock that were distributed to him or her under this Plan and that are transferable, the individual may do so only pursuant to a bona fide written offer, and the individual shall first offer the shares to the Company by giving the Company written notice disclosing: (i) the name of the proposed transferee of the Company Stock; (ii) the certificate number and number of shares of Company Stock proposed to be transferred or encumbered; (iii) the proposed price; (iv) all other terms of the proposed transfer; and (v) a written copy of the proposed offer. Within 60 days after receipt of such notice, the Company shall have the option to purchase all or part of such Company Stock at the price and on the terms described in the written notice; provided that the Company may pay such price in installments over a period not to exceed four years, at the discretion of the Board.

(b) Sale . In the event the Company (or a stockholder, as described below) does not exercise the option to purchase Company Stock, as provided above, the individual shall have the right to sell, encumber, or otherwise dispose of the shares of Company Stock described in subsection (a) at the price and on the terms of the transfer set forth in the written notice to the Company, provided such transfer is effected within 15 days after the expiration of the option period. If the transfer is not effected within such period, the Company must again be given an option to purchase, as provided above.

(c) Assignment of Rights . The Board, in its sole discretion, may waive the Company’s right of first refusal and repurchase right under this Section 9. If the Company’s right of first refusal or repurchase right is so waived, the Board may, in its sole discretion, assign such right to the remaining stockholders of the Company in the same proportion that each stockholder’s stock ownership bears to the stock ownership of all the stockholders of the Company, as determined by the Board. To the extent that a stockholder has been given such right and does not purchase his or her allotment, the other stockholders shall have the right to purchase such allotment on the same basis.

(d) Purchase by the Company . Prior to a Public Offering, if a Grantee ceases to be employed by, or provide service to, the Employer, the Company shall have the right to purchase all or part of any Company Stock distributed to him or her under this Plan at its then current Fair Market Value (as defined in Section 5(b)) (or at such other price as may be established in the Grant Instrument); provided, however, that such repurchase shall be made in accordance with applicable accounting rules to avoid adverse accounting treatment.

(e) Public Offering . On and after a Public Offering, the Company shall have no further right to purchase shares of Company Stock under this Section 9.

(f) Stockholders Agreement . Notwithstanding the provisions of this Section 9, if the Board requires that a Grantee execute a Stockholders Agreement (or other agreement containing first refusal or repurchase rights) with respect to any Company Stock distributed pursuant to this Plan, such Grantee shall execute such Stockholders Agreement (or other such agreement) as a condition to retaining his or her rights to such Company Stock. If such Stockholders Agreement (or other such agreement) contains a right of first refusal or repurchase right, the provisions of this Section 9 shall not apply to such Company

Stock for as long as those provisions of the Stockholders Agreement (or other agreement) are in effect, unless the Board determines otherwise.

10. Change of Control of the Company .

(a) Definitions .

As used in this Plan, a “Change of Control” shall mean:

(i) any merger or consolidation in which voting securities of the Company possessing more than 50% of the total combined voting power of the Company’s outstanding securities are Transferred to a person or persons different from the person holding those securities immediately prior to such transaction and the composition of the Board following such transaction is such that the directors of the Company prior to the transaction constitute less than 50% of the Board membership following the transaction;

(ii) any acquisition, directly or indirectly, by a person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership of voting securities of the Company possessing more than 50% of the total combined voting power of the Company’s outstanding securities; provided, however, that, no Change of Control shall be deemed to occur by reason of the acquisition of shares of the Company’s capital stock by an investor in the Company in a capital-raising transaction;

(iii) any acquisition, directly or indirectly, by a person or related group of persons of the right to appoint a majority of the directors of the Company or otherwise directly or indirectly control the management, affairs and business of the Company;

(iv) any sale transfer or other disposition of all or substantially all of the assets of the Company; or

(v) a complete liquidation or dissolution of the Company.

As used in this Section 10, “Transfer” shall include any sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of a security interest or other arrangement by which possession, legal title or beneficial ownership passes from one Person to another, or to the same Person in a different capacity, whether or not voluntarily and whether or not for value, and including without limitation any merger or amalgamation and any agreement to effect any of the foregoing.

(b) Assumption of Grants . Upon a Change of Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Board determines otherwise, all outstanding Options that are not exercised shall be assumed by, or replaced with comparable options by the surviving corporation (or a parent or subsidiary of the surviving corporation), and outstanding Stock Awards shall be converted to Stock Awards of the surviving corporation (or a parent or subsidiary of the surviving corporation).

(c) Other Alternatives . Notwithstanding the foregoing, in the event of a Change of Control, the Board may take any of the following actions with respect to any or all outstanding Grants: the Board may (i) determine that outstanding Options shall accelerate and become exercisable, in whole or in part, upon the Change of Control or upon such other event as the Board determines, (ii) determine that the restrictions and conditions on outstanding Stock Awards shall lapse, in whole or in part, upon the Change

of Control or upon such other event as the Board determines, (iii) require that Grantees surrender their outstanding Options in exchange for a payment by the Company, in cash or stock as determined by the Board, in an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock subject to the Grantee’s unexercised Options exceeds the Exercise Price of the Options or (iv) after giving Grantees an opportunity to exercise their outstanding Options, terminate any or all unexercised Options at such time as the Board deems appropriate. Such surrender or termination shall take place as of the date of the Change of Control or such other date as the Board may specify. The Board shall have no obligation to take any of the foregoing actions, and, in the absence of any such actions, outstanding Options and Stock Awards shall continue in effect according to their terms (subject to any assumption pursuant to subsection (b)).

11. Requirements for Issuance of Shares .

(a) Stockholders Agreement/Voting Agreement . The Board may require that a Grantee execute a stockholders agreement and/or a voting agreement, in each case, with such terms as the Board deems appropriate, with respect to any Company Stock issued pursuant to this Plan.

(b) Limitations on Issuance of Shares . No Company Stock shall be issued in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance of such Company Stock have been complied with to the satisfaction of the Board. The Board shall have the right to condition any Grant made to any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Company Stock as the Board shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions. Certificates representing shares of Company Stock issued under this Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.

(c) Lock-Up Period . If so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any underwritten offering of securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), a Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares or other securities of the Company during the 30-day period preceding and the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act for such underwriting (or such shorter period as may be requested by the Managing Underwriter and agreed to by the Company) (the “Market Standoff Period”). If so requested, the Grantee shall enter into a separate written agreement to such effect in form and substance requested by the Company or the Managing Underwriter. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period. Notwithstanding the foregoing, the Company may require that a Grantee execute a Stockholders Agreement or other agreement containing lock-up provisions. If such Stockholders Agreement or other agreement contains any lock-up or market standoff provisions that differ from the provisions of this Section 11(c), for as long as the provisions of such other agreement are in effect, the provisions of this Section 11(c) shall not apply to such Company Stock, unless the Board determines otherwise.

12. Amendment and Termination of This Plan .

(a) Amendment . The Board may amend or terminate this Plan at any time; provided, however, that the Board shall not amend this Plan without stockholder approval if such approval is

required in order to comply with the Code or other applicable laws, or, after a Public Offering, to comply with applicable stock exchange requirements.

(b) Termination of This Plan . This Plan shall terminate on the day immediately preceding the tenth anniversary of its effective date, unless this Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders.

(c) Termination and Amendment of Outstanding Grants . A termination or amendment of this Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Board acts under Section 18(b). The termination of this Plan shall not impair the power and authority of the Board with respect to an outstanding Grant. Whether or not this Plan has terminated, an outstanding Grant may be terminated or amended under Section 18(b) or may be amended by agreement of the Company and the Grantee consistent with this Plan.

(d) Governing Document . This Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend this Plan in any manner. This Plan shall be binding upon and enforceable against the Company and its successors and assigns.

13. Funding of This Plan . This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Grants under this Plan. In no event shall interest be paid or accrued on any Grant, including unpaid installments of Grants.

14. Rights of Participants . Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or other person to any claim or right to be granted a Grant under this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Employer or any other employment rights.

15. No Fractional Shares . No fractional shares of Company Stock shall be issued or delivered pursuant to this Plan or any Grant. The Board shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

16. Headings . Section headings are for reference only. In the event of a conflict between a title and the content of a Section, the content of the Section shall control.

17. Effective Date of This Plan .

(a) Effective Date . This Plan shall be effective on the date set forth on the first page above.

(b) Public Offering . The provisions of this Plan that refer to a Public Offering, or that refer to, or are applicable to persons subject to, section 16 of the Exchange Act or section 162(m) of the Code, shall be effective, if at all, upon the initial registration of the Company Stock under section 12(b) or 12(g) of the Exchange Act, and shall remain effective thereafter for as long as such stock is so registered.

18. Miscellaneous .

(a) Grants in Connection with Corporate Transactions and Otherwise . Nothing contained in this Plan shall be construed to (i) limit the right of the Board to make Grants under this Plan

in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other awards outside of this Plan. Without limiting the foregoing, the Board may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company, the Parent or any of their subsidiaries in substitution for a stock option or Stock Awards grant made by such corporation. The terms and conditions of the substitute grants may vary from the terms and conditions required by this Plan and from those of the substituted stock incentives. The Board shall prescribe the provisions of the substitute grants.

(b) Compliance with Law . This Plan, the exercise of Options and the obligations of the Company to issue shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. With respect to persons subject to section 16 of the Exchange Act, after a Public Offering it is the intent of the Company that this Plan and all transactions under this Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that this Plan and applicable Grants under this Plan comply with the applicable provisions of section 162(m) of the Code, after a Public Offering, and section 422 of the Code. To the extent that any legal requirement of section 16 of the Exchange Act or section 162(m) or 422 of the Code as set forth in this Plan ceases to be required under section 16 of the Exchange Act or section 162(m) or 422 of the Code, that Plan provision shall cease to apply. The Board may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation. The Board may also adopt rules regarding the withholding of taxes on payments to Grantees. The Board may, in its sole discretion, agree to limit its authority under this Section.

(c) Employees Subject to Taxation Outside the United States . With respect to Grantees who are subject to taxation in countries other than the United States, the Board may make Grants on such terms and conditions as the Board deems appropriate to comply with the laws of the applicable countries, and the Board may create such procedures, addenda and subplans and make such modifications as may be necessary or advisable to comply with such laws.

(d) Governing Law . The validity, construction, interpretation and effect of this Plan and Grant Instruments issued under this Plan shall be governed and construed by and determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof.

Exhibit 10.3

FORM OF INCENTIVE STOCK OPTION AGREEMENT

THIS AGREEMENT , effective as of _____________, 20__, is made by and between GENEOS Therapeutics, Inc. (the “Company”), a Delaware corporation, and «Name» (the “Employee”), an employee of the Company.

RECITALS :

WHEREAS , the Company wishes to afford the Employee the opportunity to purchase shares of the Company’s common stock (the “Common Stock”); and

WHEREAS , the Company wishes to carry out the Company’s 2016 Equity Incentive Plan (the “Plan”), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

WHEREAS , the Committee (as hereinafter defined) has determined that it would be in the best interest of the Company to grant the incentive stock option provided for herein to the Employee as an incentive for increased efforts during the Employee’s employment by the Company, subject to the execution and delivery of this Agreement;

NOW, THEREFORE , in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the meanings specified below:

“Act” shall mean the Securities Act of 1933, as amended.

“Cause” shall have the meaning set forth in Section 5(f)(v)(D) of the Plan.

“Change of Control” shall have the meaning set forth in Section 10(a) of the Plan.

“Code” shall mean the Internal Revenue Code of 1986, as it may be hereafter amended.

“Committee” shall mean the Committee established in accordance with Section 1(a) of the Plan, if one has been appointed, or the Board of Directors of the Company if no such committee has been appointed.

“Option” shall mean the incentive stock option granted under this Agreement.

“Plan” shall have the meaning set forth in the second Recital paragraph above.

“Stockholders Agreement” shall mean any stockholders agreement among the Company and its stockholders existing on the date the Option (or its respective portion) is exercised.

“Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

“Termination of Employment” shall mean the time when the employee-employer relationship between the Employee and the Company or a Subsidiary is terminated for any reason, including, but not limited to, a termination by resignation, discharge, death or retirement, but excluding any termination where there is a simultaneous reemployment by the Company or a Subsidiary. The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, but not limited to, the question of whether a Termination of Employment resulted from a discharge for cause, and all questions of whether a particular leave of absence constitutes a Termination of Employment; provided, however, that a leave of absence shall constitute a Termination of Employment if, and to the extent that, such leave of absence interrupts employment for purposes of Section 422(a)(2) of the Code and the then applicable Regulations and Revenue Rulings under said Section.

ARTICLE 2
GRANT OF OPTION

Section 2.1 - Grant of Option

Effective as of the date hereof the Company grants to the Employee the Option to purchase any part or all of a total of [________] shares of the Company’s Common Stock upon the terms and conditions set forth in this Agreement. The Option shall be subject in all respects to the provisions of this Agreement and of the Plan. The Employee acknowledges that the Employee has received and reviewed a copy of the Plan. The Option is intended to be an incentive stock option under Section 422 of the Code to the extent permitted by law.

Section 2.2 - Purchase Price

The purchase price of the shares of Common Stock covered by the Option shall be $[___] per share.

Section 2.3 - Adjustments in Option

The number of shares subject to issuance upon exercise of the Option and the purchase price thereof are subject to adjustment in accordance with Section 3(b) of the Plan.

ARTICLE 3
EXERCISABILITY OF OPTIONS

Section 3.1 - Commencement of Exercisability

(a) Subject to the provisions of this Article 3, the Option shall vest and become exercisable as follows: __________ shares shall vest and become exercisable on _________________ [one year] , and the remaining _________ shares shall vest and become exercisable in twelve substantially equal consecutive quarterly installments beginning on ___________, 201_ [one year and three months] and continue through ________, 201_, provided that the Employee continues to be employed by the Company on the applicable vesting date.

(b) No portion of the Option that is not exercisable at the time of the Employee’s Termination of Employment shall thereafter become exercisable.

Section 3.2 - Duration of Exercisability

Upon vesting, the installments provided for in Section 3.1 shall be cumulative. Each such installment that vests and becomes exercisable pursuant to Section 3.1 shall remain exercisable until it becomes unexercisable under Section 3.3.

Section 3.3 - Expiration of Option

The Option may not be exercised to any extent after the first to occur of the following events:

(a) The expiration of ten years from the date the Option was granted;

(b) The expiration of three months after the date of the Employee’s Termination of Employment unless such Termination of Employment results from the Employee’s retirement, death, disability (within the meaning of Section 22(e)(3) of the Code) or a termination for Cause;

(d) The expiration of one year from the date of the Employee’s Termination of Employment by reason of the Employee’s retirement, death or disability (within the meaning of Section 22(e)(3) of the Code).

Section 3.4 - Acceleration of Exercisability

If a Change of Control shall occur prior to the termination of the Option pursuant to Section 3.3, all of the shares purchasable upon the exercise of the Option that have not yet vested as of the effective date of the Change of Control shall vest and become immediately exercisable at that time, notwithstanding anything to the contrary set forth in Section 3.1.

ARTICLE 4
EXERCISE OF OPTION

Section 4.1 - Person Eligible to Exercise

During the lifetime of the Employee, only the Employee may exercise the Option or any portion thereof. After the death of the Employee, any portion of the Option that is exercisable on the date of the Employee’s death may, prior to the time when the Option may no longer be exercised pursuant to the provisions of Section 3.3, be exercised by the Employee’s personal representative or by any person empowered to do so under the Employee’s will or under the then applicable laws of descent and distribution.

Section 4.2 - Partial Exercise

Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised at any time prior to the time when the Option or portion thereof may no longer be exercised pursuant to the provisions of Article 3; provided, however, that each partial exercise shall be for whole shares only.

Section 4.3 - Manner of Exercise

The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company of all of the following prior to the time when the Option or such portion may no longer be exercised pursuant to the provisions of Article 3:

(a) Notice in writing signed by the Employee or the other person then entitled to exercise the Option, stating that the Option or a portion thereof is thereby exercised, such notice complying with all applicable rules established by the Committee;

(b) (i) Full payment (in cash or by check) for the shares with respect to which the Option or portion is exercised; or

(i) If the Committee shall so permit, shares of the Company’s Common Stock owned by the Employee duly endorsed for transfer to the Company with a fair market value on the date of delivery equal to the aggregate purchase price of the shares with respect to which such Option or portion is exercised; or

(ii) If the Committee shall so permit, a combination of the consideration provided in the foregoing Sections 4.3(b)(i) and 4.3(b)(ii);

(c) A bona fide written representation and agreement in a form satisfactory to the Committee, signed by the Employee or other person then entitled to exercise such Option or portion, stating that the shares of Common Stock are being acquired for the Employee’s own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Act and then applicable rules and regulations thereunder, and that the Employee or other person then entitled to exercise the Option or portion will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Committee may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance

with the Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of the shares acquired upon the exercise of the Option does not violate the Act and may issue stop-transfer orders covering such shares. Share certificates evidencing Common Stock issued upon the exercise of the Option shall bear an appropriate legend referring to the provisions of this Section 4.3(c) and Section 5.2 and the agreements herein and therein. The written representation and agreement referred to in the first sentence of this Section 4.3(c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Act and such registration is then effective in respect of such shares;

(d) A written Joinder to the Shareholders Agreement, as provided in Section 5.2 hereof; and

(e) In the event the Option or portion shall be exercised pursuant to Section 4.1 by any person other than the Employee, appropriate proof of the right of such person to exercise the Option.

Section 4.4 - Conditions to Issuance of Shares

The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or treasury shares. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue any shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:

(a) The admission of such shares to listing on all stock exchanges on which such class of stock shall then be listed;

(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable;

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and

(d) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience.

Section 4.5 - Rights as Stockholder

The holder of the Option shall not be, and shall not have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such part of the Option is exercised in accordance with its terms.

ARTICLE 5
TRANSFER OF OPTIONS AND SHARES

Section 5.1 - Options Not Transferable

Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Employee or the Employee’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition shall be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 5.1 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 5.2 - Right of First Refusal; Repurchase Right; Joinder to Stockholders Agreement

The provisions of Section 9 of the Plan shall be applicable to any shares of Common Stock issued under this Agreement. As a condition to the exercise of the Option or any portion thereof, the Employee or other person entitled to exercise the Option shall enter into a written joinder to the any Stockholders Agreement if required by the Committee.

ARTICLE 6
MISCELLANEOUS

Section 6.1 - Administration

The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Employee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option.

Section 6.2 - Withholding

All amounts that, under federal, state or local law, are required to be withheld from the amount payable with respect to any Option shall be withheld by the Company. Whenever the Company proposes or is required to issue or transfer shares of Common Stock, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares.

Section 6.3 - No Right of Continued Employment

Nothing contained in this Agreement or in the Plan shall confer upon the Employee any right to continue in the employ of the Company or any Subsidiary or shall interfere with or

restrict in any way the rights of the Company and any Subsidiary, which are hereby expressly reserved, to discharge the Employee at any time for any reason whatsoever, with or without cause.

Section 6.4 - Notices

Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Employee shall be addressed to the Employee at the address given beneath the Employee’s signature hereto. By a notice given pursuant to this Section 6.4, either party may hereafter designate a different address for notices to be given to such party. Any notice that is required to be given to the Employee shall, if the Employee is then deceased, be given to the Employee’s personal representative if such representative has previously informed the Company of his or her status and address by written notice under this Section 6.4. Any notice shall have been deemed duly given when addressed as aforesaid and deposited (with postage prepaid) in the United States mail or sent by overnight courier (with charges prepaid).

Section 6.5 - Survival

Each provision of this Agreement that, by its terms, is intended to survive beyond the exercise of the Option shall continue in effect thereafter until such time as such term shall no longer apply.

Section 6.6 - Titles

Each provision of this Agreement that, by its terms, is intended to survive beyond the exercise of the Option shall continue in effect thereafter until such time as such term shall no longer apply.

Section 6.7 - Entire Agreement

This Agreement and the Plan sets forth the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings between the parties regarding the Option.

Section 6.8 - Successors and Assigns

This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by the Employee.

Section 6.9 - Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

(Signature page follows.)

IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto.

GENEOS THERAPEUTICS, INC.

By:

Name:

Title:

Signature of Employee

Name of Employee

Address of Employee:

Employee’s Taxpayer

Identification Number:

Exhibit 10.4

FORM OF NONQUALIFIED STOCK OPTION AGREEMENT

RECITALS :

WHEREAS , the Company wishes to afford the Employee the opportunity to purchase shares of the Company’s common stock (the “Common Stock”); and

WHEREAS , the Company wishes to carry out the Company’s 2016 Equity Incentive Plan (the “Plan”), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

NOW, THEREFORE , in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the meanings specified below:

“Act” shall mean the Securities Act of 1933, as amended.

“Cause” shall have the meaning set forth in Section 5(f)(v)(D) of the Plan.

“Change of Control” shall have the meaning set forth in Section 10(a) of the Plan.

“Code” shall mean the Internal Revenue Code of 1986, as it may be hereafter amended.

“Option” shall mean the incentive stock option granted under this Agreement.

“Plan” shall have the meaning set forth in the second Recital paragraph above.

“Stockholders Agreement” shall mean any stockholders agreement among the Company and its stockholders existing on the date the Option (or its respective portion) is exercised.

ARTICLE 2
GRANT OF OPTION

Section 2.1 - Grant of Option

Effective as of the date hereof the Company grants to the Employee the Option to purchase any part or all of a total of [________] shares of the Company’s Common Stock upon the terms and conditions set forth in this Agreement. The Option shall be subject in all respects to the provisions of this Agreement and of the Plan. The Employee acknowledges that the Employee has received and reviewed a copy of the Plan. The Option is not intended to be an incentive stock option under Section 422 of the Code to the extent permitted by law.

Section 2.2 - Purchase Price

The purchase price of the shares of Common Stock covered by the Option shall be $[___] per share.

Section 2.3 - Adjustments in Option

The number of shares subject to issuance upon exercise of the Option and the purchase price thereof are subject to adjustment in accordance with Section 3(b) of the Plan.

ARTICLE 3
EXERCISABILITY OF OPTIONS

Section 3.1 - Commencement of Exercisability

___________, 201_ [one year and three months] and continue through ________, 201_, provided that the Employee continues to be employed by the Company on the applicable vesting date.

(b) No portion of the Option that is not exercisable at the time of the Employee’s Termination of Employment shall thereafter become exercisable.

Section 3.2 - Duration of Exercisability

Section 3.3 - Expiration of Option

The Option may not be exercised to any extent after the first to occur of the following events:

(a) The expiration of ten years from the date the Option was granted;

Section 3.4 - Acceleration of Exercisability

ARTICLE 4
EXERCISE OF OPTION

Section 4.1 - Person Eligible to Exercise

representative or by any person empowered to do so under the Employee’s will or under the then applicable laws of descent and distribution.

Section 4.2 - Partial Exercise

Section 4.3 - Manner of Exercise

(b) (i) Full payment (in cash or by check) for the shares with respect to which the Option or portion is exercised; or

(ii) If the Committee shall so permit, a combination of the consideration provided in the foregoing Sections 4.3(b)(i) and 4.3(b)(ii);

certificates evidencing Common Stock issued upon the exercise of the Option shall bear an appropriate legend referring to the provisions of this Section 4.3(c) and Section 5.2 and the agreements herein and therein. The written representation and agreement referred to in the first sentence of this Section 4.3(c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Act and such registration is then effective in respect of such shares;

(d) A written Joinder to the Shareholders Agreement, as provided in Section 5.2 hereof; and

(e) In the event the Option or portion shall be exercised pursuant to Section 4.1 by any person other than the Employee, appropriate proof of the right of such person to exercise the Option.

Section 4.4 - Conditions to Issuance of Shares

(a) The admission of such shares to listing on all stock exchanges on which such class of stock shall then be listed;

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and

(d) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience.

Section 4.5 - Rights as Stockholder

ARTICLE 5
TRANSFER OF OPTIONS AND SHARES

Section 5.1 - Options Not Transferable

Section 5.2 - Right of First Refusal; Repurchase Right; Joinder to Stockholders Agreement

ARTICLE 6
MISCELLANEOUS

Section 6.1 - Administration

Section 6.2 - Withholding

Section 6.3 - No Right of Continued Employment

Nothing contained in this Agreement or in the Plan shall confer upon the Employee any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which are hereby expressly reserved, to discharge the Employee at any time for any reason whatsoever, with or without cause.

Section 6.4 - Notices

Section 6.5 - Survival

Each provision of this Agreement that, by its terms, is intended to survive beyond the exercise of the Option shall continue in effect thereafter until such time as such term shall no longer apply.

Section 6.6 - Titles

Each provision of this Agreement that, by its terms, is intended to survive beyond the exercise of the Option shall continue in effect thereafter until such time as such term shall no longer apply.

Section 6.7 - Entire Agreement

Section 6.8 - Successors and Assigns

This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by the Employee.

Section 6.9 - Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

(Signature page follows.)

IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto.

GENEOS THERAPEUTICS, INC.

By:

Name:

Title:

Signature of Employee

Name of Employee

Address of Employee:

Employee’s Taxpayer

Identification Number:

Exhibit 10.5

NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT , effective as of __________, 20__, is made by and between GENEOS Therapeutics, Inc. (the “Company”), a Delaware corporation, and ___________ (the “Optionee”), an outside director the Company.

Recitals :

WHEREAS , the Company wishes to afford the Optionee the opportunity to purchase shares of the Company’s Common Stock; and

WHEREAS , the Company has established the Company’s 2016 Equity Incentive Plan (the “Plan”), the terms of which are hereby incorporated by this reference and made a part of this Agreement; and

WHEREAS , the Committee (as hereinafter defined) has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the nonqualified stock option provided for herein under the Plan to the Optionee in consideration of the Optionee’s agreement to serve as a director of the Company and as an incentive for increased efforts during such service;

NOW, THEREFORE , in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

Article 1
DEFINITIONS

Section 1.1 - Definitions

Whenever the following terms are used in this Agreement, they shall have the meanings specified below unless the context clearly indicates to the contrary.

“Act” shall mean the Federal Securities Act of 1933, as amended.

“Change of Control” shall have the meaning set forth in Section 10(a) of the Plan.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Committee established in accordance with Section 2(a) of the Plan, if one has been appointed, or the Board of Directors of the Company, if no Committee has been appointed.

“Common Stock” shall mean the $.0001 par value Common Stock of the Company.

“Option” shall mean the nonqualified stock option to purchase Common Stock granted under this Agreement.

“Plan” shall have the meaning set forth in the second Recital paragraph above.

“Stockholders Agreement” shall mean any stockholders agreement among the Company and its stockholders existing on the date the Option (or its respective portion) is exercised.

“Termination of Service” shall mean the time when the Optionee ceases to be a director of the Company for any reason.

ARTICLE 2
GRANT OF OPTION

Section 2.1 - Grant of Option

Effective as of the date hereof, the Company grants to the Optionee the Option to purchase any part or all of an aggregate of [_______] shares of Common Stock upon the terms and conditions set forth in this Agreement. The Option shall be subject in all respects to the provisions of this Agreement and of the Plan. The Option is not intended to be an incentive stock option under Section 422 of the Code.

Section 2.2 - Purchase Price

The purchase price of the shares of Common Stock covered by the Option shall be $[___] per share.

Section 2.3 - Adjustments in Option

The number of shares subject to issuance upon exercise of the Option and the purchase price thereof are subject to adjustment in accordance with Section 3(b) of the Plan.

ARTICLE 3
EXERCISABILITY OF OPTIONS

Section 3.1 - Exercisability

(a) Subject to the provisions of this Article 3, the Option shall vest and become exercisable vest in three consecutive annual installments of _____ shares each on _________, 201_, ___________, 201_ and ___________, 201_, respectively; provided that the Optionee continues to serve as a director of the Company on the applicable vesting date [Confirm vesting and acceleration.]

(b) No portion of the Option that is not exercisable at the time of the Optionee’s Termination of Service shall thereafter become exercisable.

Section 3.2 - Duration of Exercisability

Section 3.3 - Termination of Option

The Option may not be exercised to any extent after the first to occur of the following events:

(a) The expiration of ten years from the date the Option was granted; or

(b) The expiration of one year after the Optionee’s Termination of Service.

Section 3.4 - Acceleration of Exercisability

ARTICLE 4
EXERCISE OF OPTION

Section 4.1 - Person Eligible to Exercise

During the lifetime of the Optionee, only the Optionee may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by the Optionee’s personal representative or by any person empowered to do so under the Optionee’s will or under the then applicable laws of descent and distribution.

Section 4.2 - Partial Exercise

Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3; provided, however, that each partial exercise shall be for whole shares only.

Section 4.3 - Manner of Exercise

(a) Notice in writing signed by the Optionee or the other person then entitled to exercise the Option or any portion, stating that the Option or portion is thereby exercised, such notice complying with all applicable rules established by the Committee;

(b) ((1) Full payment (in cash or by check) for the shares with respect to which the Option or portion is exercised; or

(ii) If the Committee in its sole discretion shall so permit, shares of Common Stock owned by the Optionee duly endorsed for transfer to the Company with a fair market value on the date of delivery equal to the aggregate purchase price of the shares with respect to which the Option or portion is exercised; or

(iii) If the Committee in its sole discretion shall so permit, a combination of the consideration provided in the foregoing subsections 4.3(b)(i) and 4.3(b)(ii);

(c) A bona fide written representation and agreement in a form satisfactory to the Committee, signed by the Optionee or other person then entitled to exercise the Option or portion, stating that the shares of stock are being acquired for the Optionee’s own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Act, and then applicable rules and regulations thereunder, and that the Optionee or other person then entitled to exercise the Option or portion will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Committee may, in its absolute discretion, take whatever additional action it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on exercise of the Option shall bear an appropriate legend referring to the provisions of this subsection 4.3(c) and the agreements herein. The written representation and agreement referred to in the first sentence of this subsection 4.3(c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Act, and such registration is then effective in respect of such shares;

(d) A written joinder to the Stockholders Agreement, if a Stockholders Agreement shall be in effect, as provided in Section 5.2 hereof; and

(e) In the event the Option or portion shall be exercised pursuant to Section 4.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option.

Section 4.4 - Conditions to Issuance of Stock Certificates

The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares that have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:

(a) The admission of such shares to listing on all stock exchanges or stock markets on which such class of stock is then listed;

(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, that the Committee shall, in its absolute discretion, deem necessary or advisable;

(c) The obtaining of any approval or other clearance from any state or federal government agency that the Committee shall, in its absolute discretion, determine to be necessary or advisable; and

(d) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience.

Section 4.5 - Rights as Stockholder

The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such part of the Option is exercised in accordance with its terms.

ARTICLE 5
TRANSFER OF OPTIONS AND SHARES

Section 5.1 - Options Not Transferable

Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or the Optionee’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 5.1 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 5.2 - Right of First Refusal; Repurchase Right; Joinder to Stockholders Agreement

The provisions of Section 9 of the Plan shall be applicable to any shares of Common Stock issued under this Agreement. As a condition to the exercise of the Option or any portion thereof, the Optionee or other person entitled to exercise the Option shall enter into a written joinder to the any Stockholders Agreement if required by the Committee.

ARTICLE 6
MISCELLANEOUS

Section 6.1 - Administration

The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option.

Section 6.2 - Withholding

All amounts which, under federal, state or local law, are required to be withheld from the amount payable with respect to any Option shall be withheld by the Company. Whenever the Company proposes or is required to issue or transfer shares of Common Stock, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares.

Section 6.3 - No Right of Continued Service

Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue as a director of the Company, as the case may be, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to terminate the service of the Optionee at any time for any reason whatsoever, with or without cause.

Section 6.4 - Notices

Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed to the Optionee at the address given beneath the Optionee’s signature hereto. By a notice given pursuant to this Section 6.4, either party may hereafter designate a different address for notices to be given to such party. Any notice that is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal representative if such representative has previously informed the Company of the Optionee’s status and address by written notice under this Section 6.4. Any notice shall have been deemed duly given when sent by U.S. mail, postage prepaid; by an overnight delivery service, charges prepaid; or by confirmed facsimile.

Section 6.5 - Survival

Each provision of this Agreement that, by its terms, is intended to survive beyond the exercise of the Option shall continue in effect thereafter until such time as such term shall no longer apply.

Section 6.6 - Entire Agreement

This Agreement and the Plan set forth the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings between the parties regarding the Option.

Section 6.7 - Successors and Assigns

This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by the Optionee, except to the extent expressly permitted herein.

Section 6.8 - Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

(Signature page follows.)

IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto.

GENEOS THERAPEUTICS, INC.

By:

Name:

Title:

Signature of Optionee

Name of Optionee

Optionee’s Address:

Social Security Number:

Exhibit 10.6

GENEOS THERAPEUTICS, INC.

FORM OF RESTRICTED STOCK AGREEMENT

THIS AGREEMENT is effective as of _________, 20__, by and between GENEOS Therapeutics, Inc. (the “Company), a Delaware corporation, and ___________ (“Grantee”), a ____________ of the Company.

RECITALS :

The Company has established the GENEOS Therapeutics, Inc. 2016 Equity Incentive Plan (the “Plan”), the terms of which are hereby incorporated by this reference and made a part of this Agreement. The Company’s Board of Directors (the “Board’) has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the stock award provided for herein under the Plan to Grantee in consideration of Grantee’s services as a director of the Company and as an incentive for increased efforts during such service.

NOW, THEREFORE , in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereby agree as follows:

1. Grant of Stock Award. Subject to the terms and provisions of this Agreement and the Plan, the Company hereby grants to Grantee a stock award under the Plan for _________ shares of the Company’s Common Stock (the “Shares”), all of which shall initially be restricted shares subject to the terms and conditions of this Agreement. The Shares shall be registered on the Company’s books in the name of Grantee as of the date hereof and shall be held in escrow in accordance with Section 3 hereof.

2. Agreements Regarding Shares.

2.1 Restrictions on Transfer. Grantee shall not sell, transfer, pledge, hypothecate, assign or otherwise dispose of any of the Shares until all restrictions thereon shall lapse or be terminated in accordance with this Agreement and the Plan. Any attempted sale, transfer, pledge, hypothecation, assignment or other disposition of any Shares in violation of this Agreement shall be void and of no effect, and the Company shall have the right to disregard any such transfer on its books and records and to issue “stop transfer” instructions to its transfer agent, if any.

2.2 Vesting. The Shares shall vest, and thereby cease to be subject to forfeiture, as follows: ____________; provided that the Grantee continues to serve as a director of the Company on that date; and further provided that, upon the occurrence of a Change of Control of the Company (as defined in the Plan), all of the Shares shall become vested in full, provided that Grantee continues to serve as a director of the Company immediately prior to that time.

2.3 Forfeiture or Return of Nonvested Shares. In the event that Grantee’s service as a director of the Company shall terminate for any reason prior to the vesting in full of the

Shares, any Shares not then vested shall be forfeited to the Company and no longer held by Grantee, without any further action on the part of the Company or Grantee. Furthermore, Grantee may relinquish all rights to any or all unvested Shares at any time prior to the date on which those respective shares vest pursuant to Section 2.2 by giving written notice to the Company in accordance with Section 7.5 before the applicable vesting date, which notice shall specify the number of Shares to be forfeited. Any such relinquishment shall be irrevocable, and Grantee shall take all action requested by the Company to relinquish those Shares and to transfer them back to the Company.

2.4 Distributions, etc. In the event of any changes in the capital stock of the Company by reason of any stock dividends, split-ups or combinations of shares, reclassifications, mergers, consolidations, reorganizations or liquidations while any of the Shares shall be unvested and subject to forfeiture hereunder, any and all new, substituted or additional securities to which Grantee is entitled by reason of the ownership of such unvested Shares shall be subject immediately to the terms, conditions and restrictions of this Agreement and the Plan.

2.5 Rights with Regard to Shares. Grantee will have the right to vote the Shares issued and held under this Agreement, to receive and retain any cash dividends paid thereon and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Shares, subject to, and except as otherwise provided in, this Agreement.

2.6 Tax Consequences. Grantee represents that Grantee (a) has reviewed with Grantee’s tax advisors the federal, state, local and foreign tax consequences of the receipt and ownership of the Shares and the transactions contemplated by this Agreement, and (b) is relying solely on such advisors and not on any statements or representations of the Company or any of its employees, counsel or agents. Grantee understands that Grantee (and not the Company) shall be responsible for Grantee’s own tax liability that may arise as a result of this grant of the Shares and/or the transactions contemplated by this Agreement. Grantee understands that Section 83 of the Internal Revenue Code of 1986, as amended, (the “Code”) taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of the respective date(s) that any restrictions on the Shares lapse pursuant to Section 2.2 of this Agreement. Grantee understands that Grantee may elect to be taxed at the time the Shares are issued rather than when and as the vesting period expires by filing an election under Section 83(b) of the Code with the Internal Revenue Service within 30 days after the date of issuance of the Shares.

GRANTEE ACKNOWLEDGES THAT IT IS GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO DETERMINE WHETHER TO MAKE AN ELECTION UNDER SECTION 83(b) AND, IF SO, TO FILE SUCH ELECTION IN A TIMELY MANNER.

2.7 No Implied Agreements. Grantee acknowledges and agrees that nothing set forth in this Agreement or the Plan shall confer upon Grantee the right to continue in the service of the Company in any capacity or affect any right the Company may have to terminate Grantee’s services at any time, with or without cause.

3. Escrow of Shares. The Shares may be represented by stock certificate(s) or may be uncertificated and maintained by the Company in book entry form, as the Company shall determine. The parties acknowledge and agree that any certificate(s) representing the Shares issued under this Agreement shall be held by the Company or its designee together with a stock assignment executed by Grantee in blank. Grantee hereby irrevocably constitutes and appoints the President and each Vice President of the Company as Grantee’s attorneys-in-fact and agents for the term of the escrow, each of whom shall have the authority with respect to such securities to execute all documents and instruments that such officer deems necessary or appropriate to make such securities negotiable and to complete any transaction contemplated by this Agreement. Promptly upon Grantee’s written request after the earliest to occur of (i) the lapse or termination of all restrictions on the Shares, (ii) the cessation of Grantee’s continuous service as a director of the Company, or (iii) the consummation of a Change of Control of the Company, the Company will deliver to Grantee a certificate representing the number of Shares that have vested and have not been forfeited or relinquished to the Company pursuant to this Agreement.

4. Right of First Refusal; Repurchase Right; Joinder to Stockholders Agreement. The provisions of Section 9 of the Plan shall be applicable to any shares of Common Stock issued under this Agreement. As a condition to the vesting of the Shares or any portion thereof, the Grantee shall enter into a written joinder to the any stockholders agreement that exists at that time if required by the Company’s Board of Directors.

5. Restrictive Legends. The certificates representing the Shares shall have endorsed thereon the following legends, as well as any legends contemplated by the agreements referred to in Section 4 hereof:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE. THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING A VESTING SCHEDULE, FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST TRANSFER CONTAINED IN A RESTRICTED STOCK AGREEMENT BETWEEN GENEOS THERAPEUTICS, INC. AND THE HOLDER AND THE GENEOS THERAPEUTICS, INC. 2016 EQUITY INCENTIVE PLAN, COPIES OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.

6. Investment Representations. The Shares are being issued to Grantee by the Company in reliance upon the representations and warranties of Grantee set forth in this Section 6. Grantee acknowledges, represents and warrants that:

(a) the Shares are being acquired by Grantee for Grantee’s own account for investment purposes and not with a view to, or for sale in connection with, the distribution thereof, nor with any present intention of distributing or selling any of the Shares;

(b) Grantee has been advised that the Shares have not been registered under the Securities Act of 1933, as amended, (the “Act”) and therefore the transfer of the Shares is prohibited in the absence of (i) registration under the Act of the offer, sale or other disposition of the shares or (ii) a determination by counsel acceptable to the Company that such offer, sale or other disposition may be made without registration under the Act or other applicable statutes; and

(c) Grantee understand that there are substantial restrictions on the transferability of the Shares and there is no active public market for the Shares, and, accordingly, it may not be possible to liquidate the Shares in the case of emergency.

7. Miscellaneous.

7.1 Governing Law; Entire Agreement; Amendments. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware as they apply to contracts entered into and wholly to be performed within such state by residents thereof. This Agreement, the Plan and any stockholders agreement referred to in Section 4 constitute the entire agreement of the parties with respect to the subject matter hereof and supersedes in their entirety all prior undertakings and agreements of the Company and Grantee with respect to the subject matter hereof, and may not be modified adversely to Grantee’s interest except by means of a writing signed by the Company and Grantee and otherwise in accordance with the terms of the respective agreements.

7.2 Assignment. The rights and benefits of the Company under this Agreement shall be transferable by the Company to single or multiple assignees, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Grantee under this Agreement may not be assigned without the prior written consent of the Company.

7.3 No Waiver. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties hereunder are cumulative and shall not constitute a waiver of either party’s right to assert all other remedies available to it under law or otherwise.

7.4 Further Assurances. Grantee agrees upon the request of the Company or its successors from time to time to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement or to acknowledge or document any action taken or proposed to be taken hereunder.

7.5 Notices. All notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made on the date of delivery when delivered personally, on the next business day if sent by overnight courier, and on the fifth succeeding business day after being mailed by certified mail, whichever is earlier, to the persons entitled or required to receive the same, at the addresses set forth below or to such other address as either party may designate by like notice.

If to the Company, at its principal office address.

If to Grantee, to the address set forth on the signature page to this Agreement.

7.6 Severability. In the event that any provision in this Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement.

7.7 Counterparts; Electronic Transmission. This Agreement may be executed by the parties in separate counterparts, each of which counterpart when executed and delivered shall be deemed to be an original and both of which counterparts taken together shall constitute one and the same agreement. Any executed counterpart may be delivered by facsimile or electronic transmission. The execution of this Agreement by any party hereto shall not become effective until counterparts have been executed and delivered by both parties.

(Signature page follows.)

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

GENEOS THERAPEUTICS, INC.

By:

Title:

[Name of Grantee]

Grantee’s address:

____________________________________

____________________________________

Grantee’s Social Security Number:

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, _________________, hereby sell, assign and transfer unto ___________________________ (_____________) shares of the Common Stock of GENEOS Therapeutics, Inc. standing in my name on the books of said corporation represented by Certificate No. ____ herewith, and I hereby irrevocably constitute and appoint ____________________, attorney, to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

This Stock Assignment may be used in accordance with the Restricted Stock Agreement dated _____________, 20__ between GENEOS Therapeutics, Inc. and the undersigned.

Dated:

Name of Witness (please print or type) [Name of Grantee]

Signature of Witness

INSTRUCTIONS : Please do not fill in the blanks other than the signature line.

Exhibit 31.1

Certification of CEO Pursuant to

Securities Exchange Act Rules 13a-15(e) and 15d-15(e)

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, J. Joseph Kim, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Inovio Pharmaceuticals, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date:	November 8, 2016	/s/ J. J OSEPH K IM
		J. Joseph Kim President, Chief Executive Officer and Director (Principal Executive Officer)

Exhibit 31.2

Certification of CFO Pursuant to

Securities Exchange Act Rules 13a-15(e) and 15d-15(e)

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Peter Kies, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Inovio Pharmaceuticals, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date:	November 8, 2016	/s/ P ETER K IES
		Peter Kies Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Inovio Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the quarter ending September 30, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	November 8, 2016	/s/ J. J OSEPH K IM
		J. Joseph Kim President, Chief Executive Officer and Director (Principal Executive Officer)

Date:	November 8, 2016	/s/ P ETER K IES
		Peter Kies Chief Financial Officer (Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not filed with the Securities and Exchange Commission as part of the Form 10-Q or as a separate disclosure document and is not incorporated by reference into any filing of Inovio Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.