1 unchanged sentence
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
−Removed: As of the end of the period covered by this annual report on Form 10-K, we carried out an evaluation under the supervision and with the participation of our Disclosure Committee and our management, including our Chief Executive Officer and our Interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e).
+Added: As of the end of the period covered by this annual report on Form 10-K, we carried out an evaluation under the supervision and with the participation of our Disclosure Committee and our management, including our Chief Executive Officer and our Head of Finance, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e).
Disclosure controls are procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, or the Exchange Act, such as this annual report on Form 10-K, is recorded, processed, summarized, and reported within the time periods specified by the United States Securities and Exchange Commission.
−Removed: Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
+Added: Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Head of Finance, as appropriate to allow timely decisions regarding required disclosure.
Our quarterly evaluation of disclosure controls includes an evaluation of some components of our internal control over financial reporting.
We also perform a separate annual evaluation of internal control over financial reporting for the purpose of providing the management report below.
−Removed: The evaluation of our disclosure controls included a review of their objectives and design, our implementation of the controls and the effect of the controls on the information generated for use in this annual report on Form 10-K.
+Added: The evaluation of our disclosure controls included a review of objectives and design, our implementation of the controls and the effect of the controls on the information generated for use in this annual report on Form 10-K.
In the course of the control evaluations, we reviewed data errors or control problems identified and sought to confirm that appropriate corrective actions, including process improvements, were being undertaken.
−Removed: This type of evaluation is performed on a quarterly basis so that the conclusions of management, including our Chief Executive Officer and our Interim Chief Financial Officer, concerning the effectiveness of the disclosure controls can be reported in our periodic reports on Form 10-Q and Form 10-K.
−Removed: The overall goals of our evaluation activities are to monitor our disclosure controls and to modify them as necessary.
+Added: Evaluation of controls is performed on a quarterly basis so that the conclusions of management, including our Chief Executive Officer and our Head of Finance, concerning the effectiveness of the disclosure controls can be reported in our periodic reports on Form 10-Q and Form 10-K.
+Added: The overall goal of our evaluation activities is to monitor our disclosure controls and to modify controls as necessary.
We intend to maintain our disclosure controls as dynamic processes and procedures that we adjust as circumstances merit.
−Removed: Based on our management’s evaluation (with the participation of our Chief Executive Officer and our Interim Chief Financial Officer), as of the end of the period covered by this report, our Chief Executive Officer and our Interim Chief Financial Officer have concluded that our disclosure controls and procedures were effective.
+Added: Based on our management’s evaluation (with the participation of our Chief Executive Officer and our Head of Finance), as of the end of the period covered by this report, our Chief Executive Officer and our Head of Finance have concluded that our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
26 unchanged sentences
Securities Authorized for Issuance under Equity Incentive Plans
−Removed: The following table provides information as of December 31, 2023, with respect to shares of our common stock that may be issued, subject to certain vesting requirements, under our existing equity compensation plans, including our 2023 Equity Incentive Plan (2023 Equity Plan), 2013 Equity Incentive Plan (Amended 2013 Plan), 2010 Employee, Director and Consultant Equity Incentive Plan (2010 Plan), and our 2016 Employee Stock Purchase Plan (2016 ESPP).
+Added: The following table provides information as of December 31, 2024, with respect to shares of our common stock that may be issued, subject to certain vesting requirements, under our existing equity compensation plans, including our 2023 Equity Incentive Plan (2023 Equity Plan), 2013 Equity Incentive Plan (Amended 2013 Plan), and our 2016 Employee Stock Purchase Plan (2016 ESPP).
Plan Category
13 unchanged sentences
(3) Represents 3,919,330 shares of common stock available for issuance under our 2023 Equity Plan and 2,921,164 shares of common stock available for issuance under our 2016 ESPP.
−Removed: No shares are available for future issuance under the Amended 2013 Plan and 2010 Plan.
+Added: No shares are available for future issuance under the Amended 2013 Plan.
Our 2016 ESPP provides for annual increases in the number of shares available for issuance thereunder on the first business day of each fiscal year equal to the lesser of:
62 unchanged sentences
Fourth Amendment to Lease between WLC Three VI, L.L.C.
−Removed: and the Registrant, dated as of November 22, 2023
+Added: and the Registrant, dated as of November 22, 2023 (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K (as filed on March 7, 2024, and incorporated herein by reference))
Amendment No.
20 unchanged sentences
(filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8‑K as filed on December 27, 2022, and incorporated herein by reference).
−Removed: Exclusive License Agreement, effective as of July 7, 2016, between the Massachusetts Eye and Ear Infirmary and Helio Vision, Inc.
−Removed: (filed as Exhibit 10.39 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (as filed on March 12, 2020, and incorporated herein by reference))
−Removed: Amendment Number 1 and Waiver Agreement dated December 20, 2018 by and between Helio Vision, Inc.
−Removed: and the Massachusetts Eye and Ear Infirmary (filed as Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (as filed on March 12, 2020, and incorporated herein by reference))
−Removed: Offer Letter, effective as of November 27, 2019, between the Registrant and Bruce Greenberg (filed as Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (as filed on March 9, 2023, and incorporated herein by reference))
−Removed: Exclusive Option Agreement, between the Registrant and AbbVie Inc., dated as of October 31, 2023
+Added: Third Amendment to Loan and Security Agreement, dated April 29, 2024, by and among the Registrant, Helio Vision, LLC, the several banks and other financial institutions or entities from time to time parties thereto and Hercules Capital, Inc.
+Added: (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K as filed on December 27, 2022, and incorporated herein by reference).
+Added: Fourth Amendment to Loan and Security Agreement, dated September 30, 2024, by and among the Registrant, Helio Vision, LLC, the several banks and other financial institutions or entities from time to time parties thereto and Hercules Capital, Inc.
+Added: (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (as filed on August 1, 2024, and incorporated herein by reference)).
+Added: Fifth Amendment to Loan and Security Agreement, dated October 28, 2024, by and among the Registrant, Helio Vision, LLC, the several banks and other financial institutions or entities from time to time parties thereto and Hercules Capital, Inc.
+Added: Exclusive Option Agreement, between the Registrant and AbbVie Inc., dated as of October 31, 2023 (filed as Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (as filed on March 7, 2024, and incorporated herein by reference))
+Added: Expansion Side Letter Agreement:
+Added: Aldeyra & AbbVie Collaboration Update
Aldeyra Therapeutics, Inc.
2023 Equity Incentive Plan, form of option agreement, and form of RSU agreement thereunder (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (as filed on August 3, 2023, and incorporated herein by reference))
+Added: Aldeyra Therapeutics, Inc.
+Added: Amended and Restated Insider Trading Policy
Subsidiaries of Aldeyra Therapeutics, Inc.
20 unchanged sentences
Form 10-K Summary
−Removed: Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the Commonwealth of Massachusetts, on March 7, 2024.
+Added: Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the Commonwealth of Massachusetts, on February 28, 2025.
ALDEYRA THERAPEUTICS, INC.
4 unchanged sentences
KNOW ALL PERSONS BY THESE PRESENTS , that each person whose signature appears below hereby constitutes and appoints Todd C.
−Removed: Brady and Bruce Greenberg, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
+Added: Brady and Michael Alfieri, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
1 unchanged sentence
Chief Executive Officer and Director
−Removed: March 7, 2024
+Added: February 28, 2025
Brady, M.D., Ph.D.
(principal executive officer)
−Removed: /s/ Bruce Greenberg
−Removed: Senior Vice President of Finance, Interim Chief Financial Officer
−Removed: March 7, 2024
−Removed: Bruce Greenberg
+Added: /s/ Michael Alfieri
+Added: Head of Finance
+Added: February 28, 2025
+Added: Michael Alfieri
(principal financial and accounting officer)
1 unchanged sentence
Chairman of the Board of Directors
−Removed: March 7, 2024
+Added: February 28, 2025
Douglas, Ph.D.
/s/ Ben Bronstein, M.D.
−Removed: March 7, 2024
+Added: February 28, 2025
Ben Bronstein, M.D.
/s/ Martin J.
−Removed: March 7, 2024
+Added: February 28, 2025
/s/ Nancy Miller-Rich
−Removed: March 7, 2024
+Added: February 28, 2025
Nancy Miller-Rich
/s/ Gary Phillips, M.D.
−Removed: March 7, 2024
+Added: February 28, 2025
Gary Phillips, M.D.
/s/ Neal Walker, D.O.
−Removed: March 7, 2024
+Added: February 28, 2025
Neal Walker, D.O.
37 unchanged sentences
As described in Notes 2, 7, and 8 to the consolidated financial statements, the Company’s deferred research and development expenses and accrued research and development expenses totaled approximately $2.2 million and $7.2 million, respectively, as of December 31, 2024.
−Removed: A portion of the accrued research and development expenses and the deferred research & development expenses relate to clinical trial activities.
+Added: A portion of the accrued research and development expenses and the deferred research and development expenses relate to clinical trial activities.
Clinical trial activities pertain to third-party services, including subject-related fees at the sites where the Company’s clinical trials are being conducted and investigator fees, amongst other costs.
1 unchanged sentence
Accrued liabilities are recorded related to those clinical trial expenses for which vendors have not yet billed the Company with respect to services provided that the Company has received.
−Removed: The accrual for these clinical trial expenses is based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study.
−Removed: Payments made by the Company in advance for clinical trial services not yet provided and/or for materials not yet received are recorded as deferred research & development expenses.
+Added: The accrual for these clinical trial expenses is based on such assumptions as total costs incurred to date, the number of subjects and clinical trial sites and length of the study.
+Added: Payments made by the Company in advance for clinical trial services not yet provided and/or for materials not yet received are recorded as deferred research and development expenses.
Actual results may differ from these estimates.
We identified the determination of accrued clinical trial expenses for certain contracts and deferred clinical trial expenses for certain contracts as a critical audit matter.
−Removed: Estimating certain assumptions related to expected total cost, the number of subjects and clinical trial sites and length of the study for certain contracts requires significant judgment due to the subjectivity and uncertainty of these assumptions.
+Added: Estimating accrued and deferred clinical trial expenses for certain contracts requires significant judgment due to the use of subjective assumptions related to total costs incurred to date, the number of subjects and clinical trial sites and length of the study.
Auditing these elements involved especially challenging and subjective auditor judgment due to the nature and extent of auditor effort required to address the matter.
The primary procedures we performed to address this critical audit matter included:
−Removed: • Evaluating the reasonableness of certain assumptions related to expected total cost, the number of subjects and clinical trial sites, and length of the study for certain contracts, by:
−Removed: i) evaluating the consistency of those assumptions for certain contracts with the Company’s press releases and other public information, ii) evaluating the consistency of those assumptions for certain contracts with the Company’s communications with vendors relating to these contracts, iii) interviewing respective clinical operations personnel to obtain information related to the status of the projects, iv) assessing original clinical vendor contract terms and change orders for the certain contracts, including the expected timeline for the related study, v) confirming clinical costs, contracted fees and total amounts billed with the clinical vendors to evaluate the completeness of costs in the estimates and vi) evaluating patient enrollment status.
−Removed: • Testing the completeness and accuracy of the data used in the estimate of certain assumptions for clinical trial expenses for certain contracts, by inspecting on a sample basis invoices received from and payments made by the Company to clinical vendors throughout the year and comparing invoice and payment amounts to the related contract details.
+Added: • Evaluating the reasonableness of certain assumptions related to total costs incurred to date, the number of subjects, and length of the study for certain contracts, by:
+Added: i) confirming total clinical costs incurred to date, contracted fees and total amounts billed with the clinical vendors to evaluate the completeness of costs in the estimates, ii) interviewing respective clinical operations personnel to obtain information related to the progress of the projects, iii) assessing original clinical vendor contract terms and change orders for the certain contracts, including the expected timeline for the related study, iv) evaluating the consistency of those assumptions for certain contracts with the Company’s press releases and other public information and v) evaluating patient enrollment progress.
+Added: • Testing the completeness and accuracy of the clinical costs and total amounts billed with the clinical vendors used in the estimate of accrued and deferred clinical trial expenses for certain contracts by inspecting on a sample basis invoices received from and payments made by the Company to clinical vendors throughout the year and comparing invoice and payment amounts to the related contract details.
/s/ BDO USA, P.C.
1 unchanged sentence
Boston, Massachusetts
−Removed: March 7, 2024
+Added: February 28, 2025
ALDEYRA THERAPEUTICS, INC.
5 unchanged sentences
Total current assets
+Added: Deferred offering costs
Fixed assets, net
4 unchanged sentences
Accrued expenses
−Removed: Current portion of long-term debt
+Added: Current portion of debt
Operating lease liabilities
+Added: Deferred collaboration revenue
Total current liabilities
11 unchanged sentences
Additional paid-in capital
−Removed: Accumulated other comprehensive loss
+Added: Accumulated other comprehensive income
Accumulated deficit
21 unchanged sentences
Years ended December 31,
−Removed: Other comprehensive income (loss):
−Removed: Unrealized loss on marketable securities
+Added: Other comprehensive income:
+Added: Net unrealized gain on marketable securities, net of tax
Reclassification of losses to net loss
−Removed: Total other comprehensive income (loss)
+Added: Total other comprehensive income
Comprehensive loss
11 unchanged sentences
Stock-based compensation
−Removed: Release of restrictions on Helio founders’ shares
Issuance of common stock, exercise
4 unchanged sentences
restricted stock awards
−Removed: Other comprehensive loss
+Added: Common stock withheld for tax obligations on
+Added: option exercise
+Added: Other comprehensive income
Balance, December 31, 2023
7 unchanged sentences
restricted stock awards
−Removed: Common stock withheld for tax obligations on
−Removed: option exercise
Other comprehensive income
18 unchanged sentences
CASH FLOWS FROM INVESTING ACTIVITIES:
−Removed: Acquisitions of fixed assets
Purchases of marketable securities
Maturities of marketable securities
−Removed: Net cash provided by (used in) investing activities
+Added: Net cash (used in) provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
+Added: Issuance costs
Proceeds from exercise of stock options
2 unchanged sentences
Debt end of term charge paid in cash
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities
NET DECREASE IN CASH AND CASH EQUIVALENTS
11 unchanged sentences
and, on March 17, 2014, the Company changed its name to Aldeyra Therapeutics, Inc.
−Removed: Aldeyra, together with its wholly-owned subsidiaries, is a clinical-stage biotechnology company devoted to discovering innovative therapies designed to treat immune-mediated diseases.
+Added: Aldeyra, together with its wholly-owned subsidiaries, is a clinical-stage biotechnology company devoted to discovering innovative therapies designed to treat immune-mediated and metabolic diseases.
The Company’s principal activities to date include research and development activities along with related general business planning, including raising capital.
9 unchanged sentences
There can be no assurance that patents issued to or licensed by the Company will not be challenged, invalidated, circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company.
−Removed: Based on its current operating plan, the Company believes that its cash and cash equivalents will be sufficient to fund the Company’s currently projected operating expenses and debt obligations for at least the next 12 months from the date the financial statements are issued.
+Added: Based on the Company's current operating plan, the Company believes that its cash and cash equivalents will be sufficient to fund the Company’s currently projected operating expenses and debt obligations for at least the next 12 months from the date the financial statements are issued.
The Company’s assessment of its liquidity and capital resources includes an estimate of the financial impacts of these changes.
15 unchanged sentences
Segment Information – Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.
−Removed: The Company views its operations and manages its business in one segment, which is the identification and development of next-generation medicines to improve the lives of patients with immune-mediated diseases.
+Added: The Company views its operations and manages its business in one segment, which is the identification and development of next-generation medicines to improve the lives of patients with immune-mediated and metabolic diseases.
+Added: See Note 16 for more information on the effects of the adoption of segment reporting.
Cash and Cash Equivalents – The Company classifies all highly liquid investments with original maturities of three months or less as cash equivalents and all highly liquid investments with original maturities of greater than three months but less than 12 months as current marketable securities.
The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating.
−Removed: The Company invests its cash primarily in reverse repurchase agreements (RRAs), government securities and obligations, and money market funds.
−Removed: RRAs are collateralized by deposits in the form of ‘Government Securities and Obligations’ for an amount not less than 102 % of their value.
−Removed: The Company does not record an asset or liability related to the collateral as the Company is not permitted to sell or repledge the associated collateral.
−Removed: The Company has a policy that the collateral has at least an A (or equivalent) credit rating.
−Removed: The Company utilizes a third-party custodian to manage the exchange of funds as well as the requirement that collateral received is maintained at 102% of the value of the RRAs on a daily basis.
+Added: The Company invests its cash primarily in government securities and obligations and money market funds.
Marketable Securities – Marketable securities consist of government securities and obligations with original maturities of more than 90 days .
1 unchanged sentence
Management determines the appropriate classification of its investments at the time of purchase and re-evaluates such determination at each balance sheet date.
+Added: At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the decline in fair value below amortized cost is a result of credit losses or other factors, whether the Company expects to recover the amortized cost of the security, the Company’s intent to sell and if it is more likely than not that the Company will be required to sell the securities before the recovery of amortized cost.
+Added: The Company records changes in allowance for expected credit loss in other income (expense).
+Added: There has been no allowance for expected credit losses recorded during any of the periods presented.
Fair Value of Financial Instruments – Financial instruments including cash equivalents and accounts payable are carried in the financial statements at amounts that approximate their fair value based on the short maturities of those instruments.
3 unchanged sentences
Concentration of Credit Risk – Financial instruments that potentially subject the Company to significant concentrations of credit risk principally consist of cash, cash equivalents and marketable securities, if any.
−Removed: The Company places its cash and cash equivalents and marketable securities with financial institutions which management believes have high credit ratings and may hold some amounts exceed federally insured limits.
+Added: The Company places its cash and cash equivalents and marketable securities with financial institutions which management believes have high credit ratings and may hold some amounts exceeding federally insured limits.
As part of its cash and investment management processes, the Company performs periodic evaluations of the credit standing of the financial institutions with whom it maintains deposits.
3 unchanged sentences
Collaborative Arrangements – The Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC 808, Collaborative Arrangements (ASC 808) .
−Removed: This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.
+Added: The ASC 808 assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.
For collaboration arrangements within the scope of ASC 808 that contain units of account, the Company first determines which units of account of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606) , if any, and which units of may be subject to other specific recognition guidance, if any.
4 unchanged sentences
ASC 740 requires a company to recognize deferred tax liabilities and assets for expected future income tax consequences of events that have been recognized in the Company’s financial statements.
−Removed: Under this method, deferred tax assets and liabilities are determined based on temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in the years in which the temporary differences are expected to reverse.
+Added: Under the ASC 740 method, deferred tax assets and liabilities are determined based on temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in the years in which the temporary differences are expected to reverse.
Valuation allowances are provided if based on the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized.
The Company accounts for uncertain tax positions pursuant to ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return.
−Removed: If the tax position meets this threshold, the benefit to be recognized is measured as the tax benefit having the highest likelihood of being realized upon ultimate settlement with the taxing authority.
+Added: If the tax position meets the threshold, the benefit to be recognized is measured as the tax benefit having the highest likelihood of being realized upon ultimate settlement with the taxing authority.
The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes.
1 unchanged sentence
Research and Development Costs – Research and development (R&D) costs are charged to expense as incurred and relate to salaries, employee benefits, stock-based compensation related to employees, consulting services, other operating costs and expenses associated with preclinical and clinical trial activities.
−Removed: Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as prepaid expenses.
+Added: Payments made by the Company in advance for research and development services not yet provided and/or for materials not yet received are recorded as deferred research and development expenses.
Accrued liabilities are recorded related to those expenses for which vendors have not yet billed us with respect to services provided and/or materials that we have received.
2 unchanged sentences
Expense is recorded during the period incurred or in the period in which a milestone is achieved.
−Removed: In order to ensure that the Company has adequately provided for preclinical and clinical expenses during the proper period, the Company maintains an accrual for these expenses.
−Removed: These accruals are assessed on a quarterly basis and are based on such assumptions as expected total cost, the number of subjects and clinical trial sites and length of the study.
+Added: In order to ensure that the Company has adequately provided for preclinical and clinical expenses during the proper
+Added: period, the Company maintains an accrual for these expenses.
+Added: These accruals are assessed on a quarterly basis and are based on such assumptions as total costs incurred to date, the number of subjects and clinical trial sites and length of the study.
Actual results may differ from these estimates and could have a material impact on the Company’s reported results.
The Company’s historical accrual estimates have not been materially different from actual costs.
−Removed: In-process research and development – Assets purchased in an asset acquisition transaction are expensed as in-process research and development (IPR&D) unless the assets acquired are deemed to have an alternative future use, provided that the acquired asset did not also include processes or activities that would constitute a “business” as defined under GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use.
−Removed: Acquired IPR&D payments are immediately expensed in the period in which they are incurred and include upfront payments, as well as transaction fees and subsequent pre-commercial milestone payments.
−Removed: Research and development costs incurred after the acquisition are expensed as incurred.
Stock-Based Compensation – Stock-based payments are accounted for in accordance with the provisions of ASC 718, Compensation – Stock Compensation .
1 unchanged sentence
For restricted stock units, fair value is based on the fair value of the underlying stock on the date of grant.
−Removed: The resulting fair value for restricted stock units and options expected to vest is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the applicable restricted stock units or option.
+Added: The resulting fair value for restricted stock units and options expected to vest is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the applicable restricted stock units or options.
The Company records the effect of forfeitures and cancellations when they occur.
7 unchanged sentences
Comprehensive Loss – Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources.
−Removed: For December 31, 2023, comprehensive loss is equal to the Company’s net loss of $ 37.5 million and a reclassification of losses on marketable securities to net loss of $ 0.1 million.
−Removed: For December 31, 2022, comprehensive loss is equal to the Company's net loss of $ 62.0 million and an unrealized loss on marketable securities of $ 0.1 million.
−Removed: Net Loss Per Share – The Company computes net loss per share in accordance with the two-class method.
−Removed: Under the two-class method, net loss is allocated between common stock and other participating securities based on their participation rights.
−Removed: The Company has determined that the nonvested shares issued to the Helio founders represents a participating security and as such the nonvested shares are excluded from basic earnings per share.
−Removed: Net losses are not allocated to the nonvested stockholders for computing net loss per share under the two-class method because nonvested stockholders do not have contractual obligations to share in the losses of the Company.
−Removed: Basic earnings per share is calculated by dividing net loss allocable to common stockholders by the weighted average number of common stock outstanding during the period, excluding the effects of any potentially dilutive instruments.
+Added: For December 31, 2024, comprehensive loss is equal to the Company’s net loss of $ 55.9 million and an unrealized gain on marketable securities to net loss of $ 0.1 million.
+Added: For December 31, 2023, comprehensive loss is equal to the Company's net loss of $ 37.5 million and reclassification of losses on marketable securities to net loss of $ 0.1 million.
+Added: Net Loss Per Share – Basic earnings per share is calculated by dividing net loss allocable to common stockholders by the weighted average number of common stock outstanding during the period, excluding the effects of any potentially dilutive instruments.
Diluted net loss per share is computed using the more dilutive of (a) the two-class method, or (b) treasury stock method, as applicable, to the potentially dilutive instruments.
The weighted-average number of common shares outstanding gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and restricted stock units, warrants, if any, and nonvested shares.
−Removed: Recent Accounting Pronouncements – In June 2016, the FASB issued (ASU) No.
−Removed: 2016-13, Financial Instruments—Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments (ASU 2016-13).
−Removed: ASU 2016-13 requires that credit losses be reported as an allowance using an expected losses model, representing the entity’s current estimate of credit losses expected to be incurred.
−Removed: The accounting guidance currently in effect is based on an incurred loss model.
−Removed: For available-for-sale debt securities with unrealized losses, this standard now requires allowances to be recorded instead of reducing the amortized cost of the investment.
−Removed: The amendments under ASU 2016-13 are effective for interim and annual fiscal periods beginning after December 15, 2022.
−Removed: The Company adopted this standard as of January 1, 2023, and there was no material impact to the Company's financial statements.
−Removed: In November 2023, the FASB issued ASU No.
+Added: Recent Accounting Pronouncements – In November 2023, the FASB issued ASU No.
2023-07, Segment Reporting (Topic 280):
3 unchanged sentences
The amendments should be applied retrospectively to all prior periods presented in the financial statements.
−Removed: We are evaluating the disclosure requirements related to the new standard.
+Added: The Company adopted ASU 2023-07, which did not have a material impact on the Company's consolidated financial statements.
+Added: See Note 16 for more information on the effects of the adoption of ASU 2023-07.
In December 2023, the FASB issued ASU No.
2 unchanged sentences
The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.
−Removed: The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.
+Added: The disclosure requirements will be applied on a prospective basis, with the option to
+Added: apply them retrospectively.
The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
−Removed: We are evaluating the disclosure requirements related to the new standard.
+Added: The Company is currently evaluating the disclosure requirements related to the new standard.
+Added: In November 2024, the FASB issued ASU No.
+Added: 2024-03, Disaggregation of Income Statement Expenses (ASU 2024-03).
+Added: ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory;
+Added: employee compensation;
+Added: and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included.
+Added: ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.
+Added: Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements.
+Added: The Company is evaluating the disclosure requirements related to the new standard.
HELIO VISION ACQUISITION
On January 28, 2019 (Closing Date), the Company acquired Helio Vision, Inc.
−Removed: As a result of the acquisition, the Company initially issued an aggregate of 1,160,444 shares of common stock to the former securityholders and an advisor of Helio.
−Removed: The founders of Helio were issued 568,627 shares and non-founders were issued 591,817 shares.
−Removed: The Helio founders’ shares were subject to vesting based on continued service to the Company through January 28, 2022.
−Removed: The Company recognized the expense associated with the founders’ restricted shares as research and development compensation expense on a straight-line basis as the shares vested over the three-year period.
−Removed: For the year ended December 31, 2022, the Company recorded $ 0.1 million of research and development compensation expense, for the founders’ restricted shares.
−Removed: There are no further obligations related to founders’ restricted shares.
−Removed: In January 2021, pursuant to the terms of the acquisition agreement, the Company issued 246,562 shares of its common stock to the former securityholders of Helio (January Shares).
−Removed: In addition, the Company, subject to the conditions of the acquisition agreement, is contingently obligated to make additional payments to the former securityholders of Helio as follows:
−Removed: (a) $ 10.0 million of common stock following approval by the FDA of an new drug application (NDA) for the prevention and/or treatment of proliferative vitreoretinopathy or a substantially similar label prior to the 10th anniversary of the Closing Date;
+Added: (Helio) and thereby obtained rights to develop ADX‑2191 for the treatment of proliferative vitreoretinopathy (the Helio Product Candidate) pursuant to an Agreement and Plan of Merger dated as of January 24, 2019 (the Merger Agreement).
+Added: As a result of the acquisition, the Company issued an aggregate of 1,407,006 shares of common stock to the former securityholders and an advisor of Helio, including 246,562 shares issued in January 2021, pursuant to the terms of the acquisition agreement.
+Added: In addition, the Company, subject to the conditions of the acquisition agreement, was contingently obligated to make additional payments to the former securityholders of Helio as follows:
+Added: (a) $ 10.0 million of common stock following approval by the FDA of a new drug application (NDA) for the prevention and/or treatment of proliferative vitreoretinopathy or a substantially similar label prior to the 10th anniversary of the Closing Date;
and (b) $ 2.5 million of common stock following FDA approval of an NDA for an indication (other than proliferative vitreoretinopathy or a substantially similar label) prior to the 12th anniversary of the Closing Date (the shares of common stock issuable pursuant to the preceding clauses (a) and (b) are referred to herein as the Milestone Shares), provided that in no event shall the Company be obligated to issue more than an aggregate of 5,248,885 shares of common stock in connection with the Helio acquisition.
+Added: During the year ended December 31, 2024, the Company ceased development of the Helio Product Candidate for the treatment of proliferative vitreoretinopathy.
+Added: As a result, subject to the terms and conditions of the Merger Agreement, the Helio Product Candidate and related intellectual property rights may revert to an entity designated by the representative of the former Helio stockholders.
Additionally, in the event of certain change of control or divestitures by the Company, certain former convertible noteholders of Helio will be entitled to a tax gross-up payment in an amount not to exceed $ 1.0 million in the aggregate.
2 unchanged sentences
Accordingly, the Milestone Shares are evaluated under FASB ASC Topic 450, Contingencies (ASC 450) and the Company will record a liability related to the Milestone Shares if the milestones are achieved, and the obligation to issue the Milestone Shares becomes probable.
−Removed: At such time, the Company will record the cost of the Milestone Shares issued to the founders as compensation expense and to the Helio non-founders as an IPR&D expense if there is no alternative future use.
−Removed: No other milestones related to the remaining Milestone Shares are considered probable of being achieved as of December 31, 2023 .
+Added: At such time, the Company will record the cost of the Milestone Shares issued to the Helio founders as a compensation expense and to the other former securityholders of Helio as an in-process research and development expense if there is no alternative future use.
+Added: No milestones related to the remaining Milestone Shares are considered probable of being achieved as of December 31, 2024 .
NET LOSS PER SHARE
6 unchanged sentences
CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES
−Removed: At December 31, 2023, cash and cash equivalents were comprised of:
−Removed: Estimated Fair
−Removed: Cash and Cash
−Removed: Money market funds
−Removed: Total cash and cash equivalents
−Removed: There were no marketable securities held at December 31, 2023.
At December 31, 2024, cash, cash equivalents, and marketable securities were comprised of:
4 unchanged sentences
government agency securities
−Removed: Available for sale (1)
+Added: Available for sale marketable securities (1)
Total cash, cash equivalents, and current marketable securities
1 unchanged sentence
The contractual maturities of all cash equivalents and available for sale securities were less than one year at December 31, 2024.
+Added: At December 31, 2023, cash, cash equivalents, and marketable securities were comprised of:
+Added: Estimated Fair
+Added: Money market funds
+Added: Total cash and cash equivalents
+Added: There were no marketable securities held at December 31, 2023.
FAIR VALUE MEASUREMENTS
1 unchanged sentence
Valuation techniques used to measure fair value are performed in a manner to maximize the use of observable inputs and minimize the use of unobservable inputs.
−Removed: ASC 820, Fair Value Measurements , establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:
+Added: ASC 820, Fair
+Added: Value Measurements , establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:
Level 1 – Quoted prices in active markets that are accessible at the market date for identical unrestricted assets or liabilities.
6 unchanged sentences
Money market funds (a)
+Added: U.S government agency securities (b)
Total assets at fair value
1 unchanged sentence
Money market funds (a)
−Removed: government agency securities (b)
Total assets at fair value
1 unchanged sentence
government agency securities are recorded at fair market value, which are determined based on the most recent observable inputs for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable.
+Added: There were no liabilities measured at fair value at December 31, 2024 or December 31, 2023.
+Added: Financial instruments including clinical trial prepayments to contract research organizations and accounts payable are carried in the consolidated financial statements at amounts that approximate their fair value based on the short maturities of those instruments.
+Added: The carrying amount of the Company’s term loan under the Hercules Credit Facility (as defined in Note 9) approximates market rates currently available to the Company.
PREPAID EXPENSES AND OTHER CURRENT ASSETS
2 unchanged sentences
Prepaid insurance expenses
−Removed: Other current receivables
Miscellaneous prepaid expenses and other current assets
18 unchanged sentences
and (iv) following the satisfaction of certain conditions, which conditions were satisfied in April 2021, further extended the expiration of the interest-only period and the deadline for drawing down the Fourth Loan Tranche to May 1, 2023 .
+Added: Repayment of the aggregate outstanding principal balance of the term loan, in monthly installments, was to commence upon expiration of the interest-only period and continue through October 1, 2023 (Maturity Date).
The First Amendment was determined to be a modification in accordance with FASB ASC Topic 470 Debt, and did not result in extinguishment.
On December 22, 2022, the Company entered into the Second Amendment to the Loan and Security Agreement (Second Amendment), which became effective as of December 31, 2022 (Second Amendment Effective Date).
−Removed: The Second Amendment, among other things, (i) extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from May 1, 2023 to May 1, 2024;
−Removed: (ii) extended the maturity date from October 1, 2023 to October 1, 2024 (Maturity Date);
−Removed: (iii) extended the availability of the Fourth Loan Tranche commitment of $ 20 million from May 1, 2023 to May 1, 2024 ;
+Added: The Second Amendment, among other things, (i) extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement were to be made from May 1, 2023 to May 1, 2024;
+Added: (ii) extended the Maturity Date from October 1, 2023 to October 1, 2024;
+Added: (iii) extended the availability of the Fourth Loan Tranche commitment of $ 20 million, which remained conditioned on approval by the Lenders’ investment committee, from May 1, 2023 to May 1, 2024 ;
and (iv) amended the Prepayment Charge (as defined therein) to equal 0.75 % of the amount prepaid during the 12-month period following the Second Amendment Effective Date, and 0 % thereafter.
−Removed: The ability to draw the Fourth Loan Tranche remains conditioned on approval by the Lenders’ investment committee.
In addition, a supplemental end of term charge of $ 292,500 (Supplemental End of Term Charge) shall be due on the earlier of (a) the Maturity Date, as amended, or (b) repayment of the aggregate amount of advances under the Loan and Security Agreement.
−Removed: The existing end of term charge of $ 1,042,500 (End of Term Charge) remained due on the earlier of (A) October 1, 2023 or (B) repayment of the aggregate amount of advances under the Loan and Security Agreement, and was paid on October 2, 2023.
−Removed: Repayment of the aggregate outstanding principal balance of the term loan, in monthly installments, commences in May 2024 upon expiration of the interest-only period and continues through the Maturity Date, as amended.
−Removed: The Second Amendment was determined to be a modification in accordance with FASB ASC Topic 470, Debt and did not result in extinguishment.
−Removed: In connection with the Hercules Credit Facility, the Company incurred a commitment charge of $ 25,000 , transaction costs of $ 273,186 , a fee of $ 375,000 upon closing, the End of Term Charge, which was paid in October 2023, and the Company will be required to pay the Supplemental End of Term Charge.
−Removed: The Company paid the End of Term Charge on October 2, 2023 in the amount of $ 1,042,500 .
+Added: The initial end of term charge of $ 1,042,500 (End of Term Charge) was paid on October 2, 2023.
+Added: On April 29, 2024, the Company entered into the Third Amendment to the Loan and Security Agreement (Third Amendment).
+Added: The Third Amendment, among other things, extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement were to be made from May 1, 2024 to October 1, 2024.
+Added: On May 1, 2024, the Fourth Loan Tranche commitment expired unutilized.
+Added: The Second and Third Amendments were determined to be modifications in accordance with FASB ASC Topic 470 Debt, and did not result in extinguishment.
+Added: On September 30, 2024, the Company entered into the Fourth Amendment to the Loan and Security Agreement (Fourth Amendment).
+Added: The Fourth Amendment, among other things, (i) extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from October 1, 2024 to April 1, 2026;
+Added: (ii) extended the Maturity Date from October 1, 2024 to April 1, 2026;
+Added: and (iii) amended the term loan interest rate to be the greater of (a) the Prime Rate (as defined in the Loan and Security Agreement) plus 3.10%, or (b) 11.10 % .
+Added: In addition, a supplemental end of term charge of $ 300,000 (Second Supplemental End of Term Charge) shall be due on the earlier of (a) the Maturity Date, as amended, or (b) repayment of the aggregate amount of advances under the Loan and Security Agreement.
+Added: The Supplemental End of Term Charge of $ 292,500 was paid on October 1, 2024.
+Added: The Fourth Amendment was determined to be a modification in accordance with FASB ASC Topic 470 Debt, and did not result in extinguishment.
+Added: On October 28, 2024, the Company entered into the Fifth Amendment to the Loan and Security Agreement (Fifth Amendment).
+Added: The Fifth Amendment introduces, among other things, new definitions to include holding investments in a wholly owned subsidiary structured as a Massachusetts Security Corporation.
+Added: In connection with the Hercules Credit Facility, the Company has incurred;
+Added: a commitment charge of $ 25,000 , transaction costs of $ 273,186 , a fee of $ 375,000 upon closing, the End of Term Charge, which was paid in October 2023, and the Supplemental End of Term Charge, which was paid in October 2024.
+Added: In addition, the Company will be required to pay the Second Supplemental End of Term Charge.
The fees and transaction costs are amortized to interest expense from 2019 through the Maturity Date using the effective interest method.
−Removed: The End of Term Charge was amortized to interest expense from 2019 through October 2023, and the Supplemental End of Term Charge is amortized to interest expense from December 2022 through the Maturity Date, both using the effective interest method.
+Added: Using the effective interest method, the End of Term Charge was amortized to interest expense from 2019 through October 2023, the Supplemental End of Term Charge was amortized to interest expense from December 2022 through October 2024, and the Second Supplemental End of Term Charge is amortized to interest expense from September 2024 through the Maturity Date.
The effective interest rate was 12.4 % at December 31, 2024.
−Removed: At the Company’s option, the Company may elect to prepay all, but not less than all, of the outstanding term loan by paying the entire principal balance and all accrued and unpaid interest thereon plus all fees and other amounts due under the Loan and Security Agreement as of the date of such prepayment, including a prepayment charge equal to 0.75 % of the principal amount being prepaid during the 12-month period following the Second Amendment Effective Date, and 0 % thereafter.
−Removed: Following the effective time of the First Amendment and the Second Amendment and as of December 31, 2023 , an aggregate of $ 35 million, subject to the terms and conditions of the Loan and Security Agreement, may be made available to the Company for borrowing, $ 15 million of which was funded prior to the date of the First Amendment.
+Added: At the Company’s option, the Company may elect to prepay all, but not less than all, of the outstanding term loan by paying the entire principal balance and all accrued and unpaid interest thereon, plus all fees and other amounts due under the Loan and Security Agreement as of the date of such prepayment.
+Added: As of December 31, 2024 , $ 15 million has been funded under the Loan and Security Agreement and no additional amounts were available to the Company for borrowing.
Long-term debt consisted of the following:
Term loan payable
−Removed: End of term charge
+Added: Supplemental end of term charge
Unamortized debt issuance costs
1 unchanged sentence
Total long-term debt
−Removed: Future principal payments, including the End of Term Charge, are as follows for the years ending December 31:
+Added: Future principal payments, including the Supplemental End of Term Charge, are as follows for the years ending December 31:
The Loan and Security Agreement also contains certain events of default, representations, warranties and non-financial covenants of the Company.
6 unchanged sentences
2024 Jefferies Sales Agreement
−Removed: In March 2021, the Company entered into an Open Market Sales Agreement SM with Jefferies LLC (Jefferies), as sales agent (2021 Jefferies Sales Agreement), pursuant to the 2021 Jefferies Sales Agreement, the Company may offer and sell, from time to time through Jefferies, shares of common stock providing for aggregate sales proceeds of up to $ 100.0 million.
−Removed: The Company has no obligation to sell any shares under the 2021 Jefferies Sales Agreement, and could at any time suspend solicitations and offers under the 2021 Jefferies Sales Agreement.
−Removed: No sales had been made pursuant to the 2021 Jefferies Sales Agreement as of December 31, 2023.
−Removed: No current or deferred tax provision expenses for federal and state income taxes have been recorded as the Company has incurred losses since inception for tax purposes.
+Added: In August 2024, the Company entered into an Open Market Sales Agreement SM with Jefferies LLC (Jefferies), as sales agent (the 2024 Jefferies Sales Agreement), under which the Company has the ability to offer and sell, from time to time through Jefferies, shares of common stock providing for aggregate sales proceeds of up to $ 75.0 million.
+Added: As of December 31, 2024 , no shares of common stock were sold under the 2024 Jefferies Sales Agreement.
+Added: No current or deferred tax provision expense has been recorded for federal income taxes as the Company has incurred losses since inception for tax purposes and maintains a full valuation allowance against net deferred tax assets.
+Added: During 2024, the Company recorded a $ 1,000 state current tax provision for liability due from the Company's Massachusetts Security Corporation.
+Added: There is no deferred tax provision expense recorded for state income taxes because the Company has a full valuation allowance against net deferred tax assets.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
−Removed: In assessing the realizability of net deferred taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740), the Company considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized.
−Removed: Based on the weight of available evidence, primarily the incurrence of net losses since inception, anticipated net losses in the near future, reversals of existing temporary differences and expiration of various federal and state attributes, the Company does not consider it more likely than not that some or all of the net deferred taxes will be realized.
−Removed: Accordingly, a 100 % valuation allowance has been applied against net deferred tax assets.
−Removed: As of December 31, 2023, the Company had federal and state income tax net operating loss (NOL) carryforwards of approximately $ 250.6 million and $ 242.5 million , respectively.
−Removed: Federal NOL carryforwards generated through December 31, 2017 and state NOL carryforwards will expire at various dates through 2043 .
−Removed: The federal NOL carryforwards generated during the year ended December 31, 2018 and thereafter will carryforward indefinitely.
−Removed: As of December 31, 2023, the Company had federal and state research and development tax credit carryforwards of approximately $ 10.1 million and $ 2.1 million , respectively, which will expire at various dates through 2043 .
−Removed: Additionally, as of December 31, 2023, the Company had a federal orphan drug tax credit carryforward of approximately $ 2.1 million that expires in 2043 .
−Removed: On August 16, 2022 President Biden signed into law the Inflation Reduction Act (IRA).
−Removed: From a tax perspective, the IRA provisions includes a new corporate alternative minimum tax (CAMT) of 15% on adjusted financial statement income (AFSI) for corporations with over $1 billion in profits, a new excise tax on corporate stock buybacks and increased funding for IRS enforcement.
−Removed: A company’s AFSI can be reduced by net operating losses, foreign tax credits, general business credits and depreciation for property under Section 197.
−Removed: To determine its US federal income tax liability, a company will need to compute taxes under both systems — the regular tax system and the CAMT system.
−Removed: The company then will pay the larger amount as its tax liability in any given year.
−Removed: The Company does not expect to fall into the CAMT system.
−Removed: The IRA provisions have no impact on the Company’s financial statements for the period ended December 31, 2023.
+Added: The components of the income tax benefit for the years ended December 31, 2024 and 2023, are as follows:
+Added: Years ended December 31,
+Added: Deferred Taxes
+Added: Total income tax benefit
+Added: A reconciliation of the federal statutory tax rate of 21 % to the Company’s effective income tax rates are as follows:
+Added: Years ended December 31,
+Added: Statutory tax rate
+Added: State taxes, net of federal benefits
+Added: Federal research and development credits
+Added: Change in valuation allowance
+Added: Stock-based compensation
+Added: Effective tax rate
Significant components of the Company’s deferred tax assets and liabilities at December 31, 2024 and 2023 are as follows:
11 unchanged sentences
( 121,486,475
+Added: ( 104,842,857
Deferred tax assets, net
1 unchanged sentence
Right of use asset
+Added: Unrealized gain
The change in valuation allowance of $ 16.6 million from December 31, 2023 to December 31, 2024 was primarily the result of an increase in capitalized R&D expenses, net operating losses, and tax credits.
−Removed: The components of the income tax benefit for the years ended December 31, 2023 and 2022, are as follows:
−Removed: Years ended December 31,
−Removed: Deferred Taxes
−Removed: Total income tax benefit
−Removed: Future changes in federal and state tax laws pertaining to net operating loss carryforwards may also cause limitations or restrictions from us claiming such net operating losses.
−Removed: If the net operating loss carryforwards become unavailable to us or are fully utilized, our future taxable income will not be shielded from federal and state income taxation absent certain U.S.
−Removed: federal and state tax credits, and the funds otherwise available for general corporate purposes would be reduced.
−Removed: Under Section 382 and 383 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs and certain other tax assets to offset future taxable income.
+Added: In assessing the realizability of net deferred taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740), the Company considers whether some portion or all the deferred tax assets are more likely than not to be unrealized.
+Added: Based on the weight of available evidence, primarily the incurrence of net losses since inception, anticipated net losses in the near future, reversals of existing temporary differences, and expiration of various federal and state attributes, the Company does not consider some or all net deferred taxes more likely than not to be realized.
+Added: Accordingly, a 100 % valuation allowance has been applied against net deferred tax assets.
+Added: As of December 31, 2024, the Company had federal and state income tax net operating loss (NOL) carryforwards of approximately $ 272.0 million and $ 262.9 million, respectively.
+Added: Federal NOL carryforwards generated through December 31, 2017 and state NOL carryforwards will expire at various dates through 2044 .
+Added: The federal NOL carryforwards generated during the year ended December 31, 2018 and thereafter will carryforward
+Added: indefinitely.
+Added: As of December 31, 2024, the Company had federal and state research and development tax credit carryforwards of approximately $ 12.1 million and $ 2.8 million, respectively, which will expire at various dates through 2044 .
+Added: Additionally, as of December 31, 2024, the Company had a federal orphan drug tax credit carryforward of approximately $ 2.4 million which expire at various dates through 2044 .
+Added: Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs and certain other tax assets to offset future taxable income or tax due.
In general, an ownership change occurs if the aggregate stock ownership of certain stockholders increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years).
5 unchanged sentences
Any future ownership changes, including those resulting from any recent or future financing activities, may cause our existing tax attributes to have additional limitations.
+Added: Future changes in federal and state tax laws pertaining to net operating loss carryforwards may also impose limitations or restrictions on claiming such net operating losses.
+Added: If the net operating loss carryforwards become unavailable to the Company or are fully utilized, the Company's future taxable income will not be shielded from federal and state income taxation, absent certain U.S.
+Added: federal and state tax credits, and the funds otherwise available for general corporate purposes would be reduced.
+Added: On August 16, 2022 President Biden signed into law the Inflation Reduction Act (IRA).
+Added: From a tax perspective, the IRA provisions includes a new corporate alternative minimum tax (CAMT) of 15% on adjusted financial statement income (AFSI) for corporations with over $1 billion in profits, a new excise tax on corporate stock buybacks, and increased funding for IRS enforcement.
+Added: A company’s AFSI can be reduced by net operating losses, foreign tax credits, general business credits, and depreciation for property under Section 197.
+Added: To determine US federal income tax liability, a company will need to compute taxes under both systems — the regular tax system and the CAMT system.
+Added: The company then will pay the larger amount as its tax liability in any given year.
+Added: The Company does not expect to fall into the CAMT system.
+Added: The IRA provisions have no impact on the Company’s financial statements for the period ended December 31, 2024 and 2023.
As of December 31, 2024 , the Company is subject to tax in the U.S.
1 unchanged sentence
The Company is open to examination for the tax years ended December 31, 2023, 2022, and 2021.
−Removed: In addition, any loss years remain open to the extent that losses are available for carryover to future years.
−Removed: A reconciliation of the federal statutory tax rate of 21 % to the Company’s effective income tax rates are as follows:
−Removed: Years ended December 31,
−Removed: Statutory tax rate
−Removed: State taxes, net of federal benefits
−Removed: Federal research and development credits
−Removed: Change in valuation allowance
−Removed: Stock-based compensation
−Removed: Effective tax rate
+Added: In addition, any years remain open to the extent that losses or tax credits are available for carryover to future years.
STOCK INCENTIVE PLAN
−Removed: The Company approved the 2013 Equity Incentive Plan in October 2013.
−Removed: On June 30, 2023, the 2013 Equity Incentive Plan was replaced by the 2023 Equity Incentive Plan (2023 Equity Plan).
−Removed: Prior to its replacement by the 2023 Equity Plan, the 2013 Equity Incentive Plan was amended in June 2016 and June 2018, (Amended 2013 Plan).
−Removed: The Amended 2013 Plan provides for the granting of stock options, restricted stock units (RSU), stock appreciation rights, and stock units to certain employees, members of the board of directors and consultants of the Company.
−Removed: The aggregate number of common shares that previously could have been issued under the Amended 2013 Plan automatically increase on the first business day of each year by a number of shares equal to the lower of (a) 6 % of the total number of shares of common stock outstanding on the last calendar day of the prior fiscal year, or (b) a number of shares of common stock determined by the Company’s board of directors.
−Removed: As of December 31, 2023, options to purchase 5,724,105 shares of common stock at a weighted average exercise price of $ 6.35 per share and 944,497 shares of common stock underlying restricted stock units remained outstanding under the Amended 2013 Plan.
−Removed: In May 2023, the Company's Board of Directors authorized the 2023 Equity Plan to replace the Amended 2013 Plan.
+Added: The Company approved the 2013 Equity Incentive Plan in October 2013, which was amended in June 2016 and June 2018 (the Amended 2013 Plan).
+Added: The Amended 2013 Plan provided for the granting of stock options, restricted stock units (RSU), stock appreciation rights, and stock units to certain employees, members of the board of directors and consultants of the Company.
+Added: In May 2023, the Company's board of directors approved the 2023 Equity Incentive Plan (the 2023 Equity Plan) to replace the Amended 2013 Plan.
On June 30, 2023, the Company's stockholders approved the 2023 Equity Plan at the Company's 2023 annual meeting of stockholders.
Pursuant to the 2023 Equity Plan, the Company will not make any further grants under the Amended 2013 Plan following June 30, 2023, though awards previously granted under the Amended 2013 Plan will remain outstanding.
−Removed: The 2023 Equity Plan is effective for a period of ten years after June 30, 2023, and a total of 5,450,000 additional shares of the Company’s common stock, in addition to shares of the Company’s common stock that are subject to awards granted under the Amended 2013 Plan that are outstanding as of such date and that are subsequently forfeited, cancelled or expire before being exercised or settled in full and thereupon become available for grant under the 2023 Equity Plan, are authorized for issuance under the 2023 Equity Plan.
−Removed: As of December 31, 2023, options to purchase 144,711 shares of common stock at a weighted average exercise price of $ 8.39 per share remained outstanding under the 2023 Equity Plan.
+Added: The 2023 Equity Plan is effective for a period of ten years after June 30, 2023, and a total of 5,450,000 shares of the Company’s common stock, in addition to shares of the Company’s common stock that are subject to awards granted under the Amended 2013 Plan that are outstanding as of such date and that are subsequently forfeited, cancelled, or expire before being exercised or settled in full, are authorized for issuance under the 2023 Equity Plan.
+Added: As of December 31, 2024, options to purchase 2,313,500 shares of common stock at a weighted average exercise price of $ 3.97 per share remained outstanding under the 2023
As of December 31, 2024, there were 3,919,330 shares of common stock available for grant under the 2023 Equity Plan.
−Removed: In 2020 and 2022 the Company granted cash awards under its Management Cash Incentive Plan, as amended (the Management Cash Incentive Plan).
−Removed: The Management Cash Incentive Plan provides its participants with the opportunity to earn cash incentive awards for the achievement of goals relating to the performance of the Company and was adopted in 2016.
−Removed: The cash awards vest in four annual installments from the date of grant and entitle the employees to receive a cash payment, on the earlier of (i) four years from the date of grant or (ii) a change of control, equal in value to the amount by which the then value of the Company’s common stock exceeds the base value.
+Added: In 2022, the Company granted cash awards under the Management Cash Incentive Plan, as amended (the Management Cash Incentive Plan).
+Added: The Management Cash Incentive Plan, which was adopted in 2016, provides participants with the opportunity to earn cash incentive awards for the achievement of goals relating to the performance of the Company.
+Added: The cash awards, which are equal in value to the amount by which the then value of the Company’s common stock on the Nasdaq Capital Market (Nasdaq) exceeds the base values, vest in four annual installments from the date of grant based on continued service and entitle employees to receive a cash payment on the earlier of (i) four years from the date of grant, or (ii) a change of control .
As of December 31, 2024 , $ 0.3 million was accrued as compensation expense for vested cash awards.
There was no unrecognized expense as of December 31, 2024.
−Removed: In 2022, the Company granted performance cash settled bonus awards (CSBUs) under its Management Cash Incentive Plan.
−Removed: Subject to and conditioned upon the acceptance by the FDA of the Company's submission of an NDA for reproxalap (Performance Criteria), the awards will vest in four annual installments from the date of grant and entitle the employees to receive a cash payment for each vested CSBU, on the earlier of (i) four years from the date of grant or (ii) a change of control, equal in value of the closing price per share of the Company's common stock on the Nasdaq Capital Market on the payment date.
−Removed: As of December 31, 2023 , $ 1.5 million was accrued as compensation expense for CSBUs as the Performance Criteria was deemed probable and was met in February 2023.
+Added: In 2022, the Company granted performance cash settled bonus awards (CSBUs) under the Management Cash Incentive Plan.
+Added: As the performance criteria had been met, the awards, which are equal in value to the closing price per share of the Company's common stock on Nasdaq on the payment date, will vest in four annual installments from the date of grant based on continued service, and entitle employees to receive cash payments for each vested CSBU, on the earlier of (i) four years from the date of grant or (ii) a change of control.
+Added: As of December 31, 2024 , $ 2.9 million was accrued as compensation expense for CSBUs as the Performance Criteria was met in February 2023.
There was no unrecognized expense as of December 31, 2024.
1 unchanged sentence
The Company’s share-based awards are accounted for as equity instruments, except for cash awards and CSBUs, which are accounted for as liabilities.
−Removed: The amounts included in the consolidated statements of operations relating to stock-based compensation associated with the two equity incentive plans, cash awards, CSBUs, and Helio founders’ shares are as follows:
+Added: The amounts included in the consolidated statements of operations relating to stock-based compensation associated with the two equity incentive plans, cash awards , and CSBUs are as follows:
Years ended December 31,
8 unchanged sentences
The exercise price for options granted under the Amended 2013 Plan and the 2023 Equity Plan must be at a price no less than 100 % of the fair market value of a common share on the date of grant.
−Removed: The following table summarizes option activity under the incentive plans for the year ended December 31, 2023:
+Added: The table below summarizes activity relating to stock options under the incentive plans for the year ended December 31, 2024:
Average Remaining
24 unchanged sentences
Expected volatility is estimated using the historical volatility of the Company.
−Removed: The Company has estimated the expected life of its employee stock options using the “simplified” method, whereby, the expected life equals the average of the vesting term and the original contractual term of the option for service-based awards since the Company doesn’t have sufficient historical or implied data of its own.
+Added: The Company has estimated the expected life of its employee stock options using the “simplified” method, whereby, the expected life equals the average of the vesting term and the original contractual term of the option for service-based awards since the Company does not have sufficient historical or implied data of its own.
The risk-free interest rates for periods within the expected life of the option are based on the yields of zero-coupon United States Treasury securities.
3 unchanged sentences
Terms of RSUs agreements, including vesting requirements, are determined by the board of directors or its compensation committee, subject to the provisions of the Amended 2013 Plan and the 2023 Equity Plan.
−Removed: RSUs granted by the Company typically vest over a four year period stock share price on the date of grant to estimated fair value.
+Added: granted by the Company typically vest over a four year period and are based on the stock share price on the date of grant to estimated fair value.
In the event that the employees’ employment with the Company terminates any unvested shares are forfeited and revert to the Company.
3 unchanged sentences
Outstanding at December 31, 2023
−Removed: Exercised/Released
+Added: Settled in common stock
Outstanding at December 31, 2024
−Removed: The weighted-average fair value of RSUs granted was $ 6.76 and $ 4.64 per share for the years ended December 31, 2023 and December 31, 2022, respectively.
+Added: There were no RSUs granted during the year ended December 31, 2024.
+Added: The weighted-average fair value of RSUs granted was $ 6.76 per share for the year ended December 31, 2023.
The total fair value of RSUs vested was $ 1.7 million and $ 2.0 million for the years ended December 31, 2024 and 2023, respectively.
−Removed: As of December 31, 2023, the outstanding RSUs had unamortized stock-based compensation of $ 3.6 million with a weighted-average remaining recognition period of 2.53 years and an aggregate intrinsic value of $ 3.3 million.
+Added: As of December 31, 2024, the outstanding RSUs had unamortized stock-based compensation expense of $ 1.9 million with a weighted-average remaining recognition period of 1.63 years and an aggregate intrinsic value of $ 2.7 million.
Employee Stock Purchase Plan
5 unchanged sentences
Participating employees purchase stock under the 2016 ESPP at a price equal to the lower of 85 % of the closing price on the applicable offering commencement date or 85 % of the closing price on the applicable offering termination date.
−Removed: The fair value of the purchase rights granted under this plan was estimated on the date of grant using the Black-Scholes option-pricing model using assumptions as shown below:
+Added: The fair value of the purchase rights granted under the 2016 ESPP plan was estimated on the date of grant using the Black-Scholes option-pricing model using assumptions as shown below:
Expected dividend yield
22 unchanged sentences
Through December 31, 2024 , the Company had not experienced any losses related to these indemnification obligations and no material claims were outstanding.
−Removed: The Company currently does not expect significant claims related to these indemnification obligations, and consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.
+Added: The Company currently does not expect significant claims related to these indemnification obligations, consequently concluded that the fair value of these obligations is negligible, and no related reserves were established.
In-License Agreements
MEEI Agreement
−Removed: The Company is developing ADX-2191 pursuant to an Exclusive License Agreement with Massachusetts Eye and Ear Infirmary (MEEI) originally entered into in July 2016 between MEEI and Helio Vision, Inc., as amended, (MEEI Agreement).
−Removed: The Company assumed the MEEI Agreement in connection with its 2019 acquisition of Helio Vision.
−Removed: Pursuant and subject to the MEEI Agreement, the Company obtained an exclusive, worldwide license from MEEI to develop and commercialize ADX-2191 under certain patents and patent applications, and other licenses to intellectual property (MEEI Patent Rights).
+Added: The Company was developing ADX‑2191 for the treatment of proliferative vitreoretinopathy pursuant to an Exclusive License Agreement with Massachusetts Eye and Ear Infirmary (MEEI), originally entered into in July 2016 between MEEI and Helio Vision, Inc., as amended, (the MEEI Agreement).
+Added: The Company assumed the MEEI Agreement in connection with the 2019 acquisition of Helio Vision.
+Added: Pursuant to the MEEI Agreement, the Company obtained an exclusive worldwide license from MEEI to develop and commercialize ADX‑2191 under certain patents and patent applications, in addition to other licenses to intellectual property (the MEEI Patent Rights).
The Company has agreed to use commercially reasonable efforts to develop ADX‑2191, and to meet certain specified effort and achievement benchmarks by certain dates.
−Removed: In consideration for the rights licensed under the MEEI Agreement, Helio Vision issued MEEI a number of shares of its preferred stock and Helio Vision agreed to pay non-creditable non-refundable license maintenance fees to MEEI of $ 15,000 on each of the second and third anniversary of the MEEI Agreement, $ 25,000 on each of the fourth and fifth anniversary of the MEEI Agreement and $ 35,000 on the sixth and each subsequent anniversary of the MEEI Agreement during the term of such agreement.
−Removed: In addition, Helio Vision was obligated to make future sales-dependent milestone payments to MEEI of up to the low seven figures in the aggregate, as well as royalty payments to MEEI at a rate which, as a percentage of net sales, is in the low single digits for products that incorporate or use the MEEI Patent Rights in the United States and as a percentage in the low single digits for products that incorporate or use the MEEI Patent Rights outside the United States.
−Removed: The Company is also obligated under the MEEI Agreement to pay MEEI a percentage of certain sublicense revenue that it receives in connection with entering into any sublicensing arrangements with any third parties, at a percentage rate which tiers downward from low-double digits to mid-single digits based on the date of the sublicense.
−Removed: Following the Company’s acquisition of Helio Vision, the Company became obligated to make any future payments owed under the MEEI Agreement.
+Added: In consideration for the rights licensed under the MEEI Agreement, Helio Vision issued MEEI a number of shares of preferred stock and Helio Vision agreed, during the term of the agreement, to pay non-creditable non-refundable license maintenance fees to MEEI of $ 15,000 on each of the second and third anniversary of the agreement, $ 25,000 on each of the fourth and fifth anniversary of the agreement, and $ 35,000 on the sixth and each subsequent anniversary of the agreement.
+Added: In addition, Helio Vision was obligated to make future sales-dependent milestone payments to MEEI of up to low seven figures in the aggregate, as well as royalty payments to MEEI at a rate which, as a percentage of net sales, is in the low single digits for products that incorporate or use the MEEI Patent Rights.
+Added: Helio is also obligated under the MEEI Agreement to pay MEEI a percentage of certain sublicense revenue at a percentage rate that descends from low-double digits to mid-single digits based on the date of the sublicense.
+Added: Following the Company’s acquisition of Helio Vision, the Company became obligated to make any future payments previously owed by Helio under the MEEI Agreement.
There is no additional equity consideration issuable under the MEEI Agreement.
1 unchanged sentence
The Company may terminate the MEEI Agreement with timely written notice to MEEI.
−Removed: MEEI has the right to terminate the MEEI Agreement if it, subject to certain specified cure periods, ceases all business operations with respect to licensed products, fails to pay amounts due under the MEEI Agreement, fail to comply with certain due diligence obligations, defaults in our obligation to maintain insurance, one of our officers is convicted of a felony relating to the manufacture, use, sale or importation of licensed products, we materially breach any provisions of the MEEI Agreement or in the event of its insolvency or bankruptcy.
−Removed: In the event of an early termination of the MEEI Agreement, all rights licensed and developed by the Company under the MEEI Agreement may revert back to MEEI.
+Added: MEEI has the right to terminate the MEEI Agreement, subject to certain specified cure periods, in the event of the Company’s insolvency or bankruptcy or if the Company ceases all business operations with respect to licensed products;
+Added: the Company fails to pay amounts due under the MEEI Agreement;
+Added: the Company fails to comply with certain due diligence obligations;
+Added: the Company does not maintain specific levels of insurance;
+Added: one of the Company's officers is convicted of a felony relating to the manufacture, use, sale or importation of licensed products;
+Added: or the Company materially breaches any provisions of the MEEI Agreement or in the event of insolvency or bankruptcy.
+Added: In the event of an early termination of the MEEI Agreement, all rights licensed and developed by the Company under the MEEI Agreement will revert to MEEI.
The Company has agreed to indemnify MEEI for certain claims that may arise under the MEEI Agreement.
8 unchanged sentences
The lawsuit seeks, among other things, compensatory damages on behalf of herself and all persons and entities that purchased or otherwise acquired the Company's securities between January 7, 2021 and October 16, 2023, as well as attorneys’ fees and costs.
−Removed: On March 4, 2024, defendants filed a motion to dismiss the amended complaint.
+Added: On March 4, 2024, defendants filed a motion to dismiss the amended complaint, which was fully briefed as of May 20, 2024.
+Added: Oral argument on the motion to dismiss was heard on July 24, 2024.
The Company disputes the plaintiff's claims and intends to vigorously defend the suit.
At this time, the Company cannot reasonably predict the outcome or estimate potential losses, if any, that could result from this matter.
−Removed: On October 25, 2023, a purported stockholder of the Company filed a derivative complaint in Middlesex Superior Court of the Commonwealth of Massachusetts, captioned Evan Leglar v.
−Removed: Brady, et al.
−Removed: 2381-cv-02980), against certain of the Company’s executive officers and directors, and naming the Company as a nominal defendant.
−Removed: The derivative complaint alleges, purportedly on behalf of the Company, breaches of fiduciary duty and unjust enrichment claims against all defendants.
−Removed: The claims are based on substantially identical allegations as the complaint in the Securities Class Action.
−Removed: The lawsuit seeks, among other things, an award of damages and
−Removed: restitution in favor of the Company, certain changes to the Company’s corporate governance, and attorneys’ fees and costs.
−Removed: On November 14, 2023, the plaintiff voluntarily dismissed all claims without prejudice.
In addition, from time to time, the Company is subject to litigation and claims arising in the ordinary course of business but, except as stated above, the Company is not currently a party to any material legal proceedings and the Company is not aware of any pending or threatened legal proceedings against them that the Company believes could have a material adverse effect on the Company's business, operating results, cash flows, or financial condition.
1 unchanged sentence
The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term.
−Removed: As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.
−Removed: In November 2023, the Company entered into a lease amendment extending the lease by 12 months through December 31, 2024 and contains two options to extend the term of the lease for an additional 12 months each.
+Added: As the Company’s lease does not provide an implicit rate, the Company, in determining the present value of the lease payments, uses an incremental borrowing rate based on the information available at the lease commencement date.
+Added: In November 2023, the Company entered into a lease amendment that extended the lease by 12 months through December 31, 2024 and contained two options to extend the term of the lease for an additional 12 months each.
Each option shall be exercisable, if at all, by giving a nine-month written notice to the landlord.
−Removed: As of December 31, 2023 the Company believes it is probable that it will extend the option into December 2025, which had an immaterial impact to the balance sheet as of December 31, 2023.
+Added: In April 2024, the Company extended the option to extend the term of the lease for an additional 12 months (into December 2025).
+Added: The extension was included in the December 31, 2023 financials.
For the years ended December 31, 2024 and 2023 , right of use assets obtained in exchange for lease obligations were $ 0.3 million and $ 0.5 million, respectively.
1 unchanged sentence
The weighted average discount rate used for leases as of December 31, 2024 is 9.1 %.
−Removed: The weighted average lease term as of December 31, 2023 is 2.0 years.
+Added: The weighted average lease term as of December 31, 2024 is 1.0 year.
The operating lease expense for the year ended December 31, 2024 was $ 0.3 million .
5 unchanged sentences
Non-current operating lease liabilities
−Removed: The Company’s gross future minimum payments under all non-cancelable operating leases as of December 31, 2023 are:
+Added: The Company’s gross future minimum payments under all non-cancellable operating leases as of December 31, 2024 are:
Operating Lease Obligations
−Removed: SIGNIFICANT AGREEMENTS
+Added: OPTION AGREEMENT
AbbVie Option Agreement
On October 31, 2023 (the Option Agreement Effective Date), the Company entered into an exclusive option agreement (the Option Agreement) with AbbVie Inc.
−Removed: (AbbVie), pursuant to which we granted AbbVie an exclusive option (the Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with the Company to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by the Company in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by the Company in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement).
+Added: (AbbVie), pursuant to which the Company granted AbbVie an exclusive option (the Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with the Company to develop, manufacture, and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by the Company in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by the Company in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement).
AbbVie has paid the Company a non-refundable payment of $ 1.0 million in consideration of the Option (the Option Payment).
On December 21, 2023, pursuant to the Option Agreement, AbbVie extended the period during which it may exercise the Option (the Exercise Period Extension) by paying the Company a non-refundable payment of $ 5.0 million (the Option Extension Fee).
−Removed: As a result of the Exercise Period Extension, AbbVie may exercise the Option by delivering written notice to the Company at any time during the period following the Option Agreement Effective Date until the earlier of (a) the tenth (10th) business day after the date, if any, that the Company receives approval from the U.S.
−Removed: Food and Drug Administration of the NDA for reproxalap in dry eye disease (the FDA Decision) and (b) the date that is eighteen (18) months after the Option Agreement Effective Date.
If the Collaboration Agreement is entered into, the Option Payment and the Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.
−Removed: For the twelve months ended December 31, 2023, the Company recognized zero collaboration revenue and $ 6.0 million of deferred collaboration revenue related to the Option Agreement and Exercise Period Extension.
−Removed: The Company concluded, using ASC 606 by analogy for recognition considerations as the Option Agreement was not considered to be a vendor-customer relationship, that the transaction price is $ 6.0 million (the Transaction Price), and all other amounts are excluded from the Transaction Price as they relate to fees that can only be achieved subsequent to the exercise of the Option.
−Removed: The Transaction Price was allocated to the single unit of account, the Option to enter into a future Collaboration Agreement which is a material right, as the Option Extension Fee and the Option Payment are creditable against the upfront payments payable by AbbVie if the Collaboration Agreement is entered into.
+Added: On November 15, 2024, the Company entered into the Expansion Side Letter (the Expansion Letter) with AbbVie, which amended certain terms of the Option Agreement.
+Added: The Expansion Letter makes certain changes to the Option Agreement, among other things, providing that the Company will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the Option and entry into the Collaboration Agreement, such that 60 % of our allowable expenses will be reimbursed by AbbVie in the event of exercise.
+Added: If AbbVie does not deliver a written notice of exercising the Option and the Company and AbbVie do not execute the Collaboration Agreement, the Company will remain solely responsible for such launch activities costs.
+Added: AbbVie has also independently initiated pre-commercialization planning activities.
+Added: In addition, the Exercise Period (as defined in the Option Agreement) was further modified to ten (10) business days following the date, if any, that the Company receives approval from the U.S.
+Added: Food and Drug Administration of the NDA for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide the Company notice in case AbbVie determines that it will not exercise the Option.
+Added: Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay the Company a $ 100 million upfront cash payment, less the Option Payment and the Option Extension Fee.
+Added: In addition, the Company would be eligible to receive up to approximately $ 300 million in regulatory and commercial milestone payments, inclusive of a $ 100 million milestone payment payable if the FDA Decision is received prior to or after the execution.
+Added: In the United States, the Company would share profits and losses with AbbVie from the commercialization of reproxalap according to a split of 60 % for AbbVie and 40 % for the Company.
+Added: Outside of the United States, the Company would be eligible to receive tiered royalties on net sales of reproxalap.
+Added: As of February 28, 2025, AbbVie has not exercised the Option.
+Added: As of December 31, 2023, the Company had recognized no collaboration revenue and had $ 6.0 million of deferred long-term collaboration revenue related to the Option Agreement and Exercise Period Extension.
+Added: During the three months ended September 30, 2024, the deferred collaboration revenue was reclassified from a long-term liability to a current liability due to the Option expiring pursuant to the terms of the Option Agreement in less than one year.
+Added: Although the Option Agreement was not considered to be a vendor-customer relationship, the Company used FASB ASC Topic 606, Revenue from Contracts with Customers , to conclude that the $ 6.0 million liability would be considered a transaction price (the Transaction Price), and all other amounts due to the Company under the Collaboration Agreement would be excluded from the Transaction Price, since such amounts relate to fees that can only be achieved subsequent to the exercise of the Option.
+Added: Because the Option Extension Fee and the Option Payment are creditable against the Collaboration Agreement payments due to the Company, the Transaction Price was allocated to a single unit of account, specifically, the Option to enter into a future Collaboration Agreement which is considered a material right.
The Company concluded that all other performance obligations were immaterial promises in the context of the Option Agreement and did not represent additional units of account.
−Removed: The Company will begin to recognize revenue when the Option is exercised or when the Option expires.
+Added: The Company will begin to recognize revenue if and when the Option is exercised or when the Option expires.
+Added: SEGMENT REPORTING
+Added: The Company operates through a single operating and reportable segment focused on the discovery and development of innovative therapies designed to treat immune-mediated and metabolic diseases.
+Added: The segment's approach is to develop pharmaceuticals that modulate protein systems, instead of directly inhibiting or activating single protein targets, with the goal of optimizing multiple pathways at once while minimizing toxicity.
+Added: The Company's late-stage product candidates are reproxalap, a RASP modulator for the potential treatment of dry eye disease and allergic conjunctivitis, and ADX‑2191, a novel formulation of intravitreal methotrexate for the potential treatment of retinitis pigmentosa.
+Added: The Company's preclinical RASP platform includes ADX‑248, ADX‑743, ADX‑631, ADX‑246, and other product candidates in development for inflammatory and metabolic diseases.
+Added: The Company's tangible assets are held in the United States.
+Added: The Company manages all business activities on a consolidated basis.
+Added: The Company's chief operating decision maker is the Chief Executive Officer.
+Added: The accounting policies of the operating segment are the same as those described in Note 2, Summary of Significant Accounting Policies.
+Added: The chief operating decision maker evaluates the performance of the operating segment and allocates resources based on net income (loss) that also is reported on the consolidated income statement as net loss.
+Added: The measure of the operating segment assets is reported on the consolidated balance sheet as total assets.
+Added: The chief operating decision maker uses net income (loss) to monitor budget versus actual results and to analyze cash flows in assessing performance of the segment and allocating resources.
+Added: The significant expenses are presented on the Company’s Consolidated Statements of Operations.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.