What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-10 · 71 added, 41 removed, 282 unchanged (28% of the section changed)

3 unchanged sentences

(In thousands, except share and per-share amounts)

September 30,

Current assets:

20 unchanged sentences

200,000,000 shares authorized;

52,657,661 and 49,199,845 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

52,858,920 and 49,199,845 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

8 unchanged sentences

Total other income (expense), net

Other comprehensive income — unrealized (loss) gain on short-term investments

Net loss before income taxes

Income tax expense (benefit)

Other comprehensive income — unrealized gain (loss) on short-term investments

Comprehensive loss

19 unchanged sentences

Balance at June 30, 2023

Stock-based compensation

Vesting of restricted stock awards including withholding, net

Issuance of common stock in at-the-market offerings, net

Issuance of common stock from Employee Stock Purchase Plan

Unrealized loss on short-term investments

Balance at September 30, 2023

The accompanying notes are an integral part of the unaudited consolidated financial statements.

19 unchanged sentences

Balance at June 30, 2022

Stock-based compensation

Exercise of stock options

Vesting of restricted stock awards including withholding, net

Issuance of common stock in at-the-market offerings, net

Issuance of common stock from Employee Stock Purchase Plan

Other increase

Unrealized loss on short-term investments

Balance at September 30, 2022

The accompanying notes are an integral part of the unaudited consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

51 unchanged sentences

Summary of Significant Accounting Policies

During the six months ended June 30, 2023, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC, except for the recently adopted accounting standard for ASU No.

During the nine months ended September 30, 2023, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC, except for the recently adopted accounting standard for ASU No.

2016-13 as disclosed below.

17 unchanged sentences

The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade.

As of June 30, 2023, none of the unrealized losses on the Company’s short-term investments are a result of credit loss, and therefore, the unrealized losses were recognized in OCI.

Due to a full valuation allowance, the Company did not record an income tax expense (benefit) for either of the three and six months ended June 30, 2023 or 2022.

The Company calculates its quarterly income tax provision based on an estimated, annual effective tax rates applied to ordinary income (or loss) and other known items computed and recognized as they occur.

As of September 30, 2023, none of the unrealized losses on the Company’s short-term investments are a result of credit loss, and therefore, the unrealized losses were recognized in OCI.

During the three and nine months ended September 30, 2022, the Company recorded a total of $ 0.2 million income tax benefit related to interest received and receivable on income tax refunds.

Other than the tax benefit related to interest, the Company did not record an income tax expense (benefit) for either of the three and nine months ended September 30, 2023 or 2022 due to a full valuation allowance.

The Company calculates its quarterly income tax provision based on an estimated, annual effective tax rate applied to ordinary income (or loss) and other known items computed and recognized as they occur.

The Company’s total provision is based on the United States statutory rate, increased by state and foreign taxes and reduced by a full valuation allowance on the Company’s deferred tax assets.

7 unchanged sentences

Fair Value Measurements

The Company’s assets measured at fair value on a recurring basis as of June 30, 2023 consisted of the following (in thousands):

Fair Value Measurement at June 30, 2023

The Company’s assets measured at fair value on a recurring basis as of September 30, 2023 consisted of the following (in thousands):

Fair Value Measurement at September 30, 2023

Cash equivalents - money market funds

6 unchanged sentences

The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

Short-term investments with quoted prices as of June 30, 2023 as shown below (in thousands):

June 30, 2023

Short-term investments with quoted prices as of September 30, 2023 as shown below (in thousands):

September 30, 2023

Amortized Cost

14 unchanged sentences

Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired.

During the six months ended June 30, 2023 and year ended December 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

During the nine months ended September 30, 2023 and year ended December 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

Operating Leases

The Company’s operating leases consist of leases for office and laboratory space in the United States, which expire in April 2025.

Rent expense under the Company’s operating leases was $ 0.1 million and $ 0.3 million during the three and six months ended June 30, 2023.

During the three and six months ended June 30, 2022, rent expense under the Company’s operating leases was $ 0.1 million and $ 0.2 million, respectively.

Rent expense under the Company’s operating leases was $ 0.1 million and $ 0.4 million during the three and nine months ended September 30, 2023.

During the three and nine months ended September 30, 2022, rent expense under the Company’s operating leases was $ 0.1 million and $ 0.4 million, respectively.

Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation.

4 unchanged sentences

The Company has determined that the lease renewal option is not reasonably certain of being exercised.

The cash paid for operating lease liabilities for each of the six months ended June 30, 2023 and 2022 was $ 0.3 million.

The cash paid for operating lease liabilities for each of the nine months ended September 30, 2023 and 2022 was $ 0.4 million.

Supplemental other information related to the operating leases balance sheet information is as follows (in thousands):

June 30, 2023

September 30, 2023

December 31, 2022

6 unchanged sentences

Accrued expenses and other current liabilities consist of the following (in thousands):

June 30, 2023

September 30, 2023

December 31, 2022

8 unchanged sentences

The Company’s other long-term liabilities are summarized as follows (in thousands):

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

The Amended and Restated Certificate of Incorporation, as amended (“Charter”), authorizes the Company to issue 200,000,000 shares of common stock, par value $ 0.0001 per share.

As of June 30, 2023, the Company had 52,657,661 shares of common stock issued and outstanding .

As of September 30, 2023, the Company had 52,858,920 shares of common stock issued and outstanding .

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

1 unchanged sentence

The Charter also authorizes the Company to issue 1,000,000 shares of preferred stock, par value $ 0.0001 per share.

As of June 30, 2023, the Company had no shares of preferred stock issued and outstanding .

As of September 30, 2023, the Company had no shares of preferred stock issued and outstanding .

At-the-Market Offerings

3 unchanged sentences

The Company capitalized approximately $ 0.2 million of other offering costs which will offset the proceeds received from the shares sold under the 2023 Agreement.

During the six months ended June 30, 2023, the Company sold 3,364,631 shares of common stock under the 2023 Agreement resulting in approximately $ 13.4 million in proceeds, net of $ 0.4 million commission and other offering costs.

As of June 30, 2023, $ 136.2 million remained available to be sold under the 2023 Agreement.

As of June 30, 2023, there was $ 0.2 million deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

During the nine months ended September 30, 2023, the Company sold 3,536,284 shares of common stock under the 2023 Agreement resulting in approximately $ 13.9 million in proceeds, net of $ 0.4 million commission and other offering costs.

As of September 30, 2023, $ 135.7 million remained available to be sold under the 2023 Agreement.

As of September 30, 2023, there was $ 0.2 million in deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

On February 25, 2021, the Company entered into an Equity Distribution Agreement (the “2021 Agreement”) with Piper Sandler & Co., Evercore Group L.L.C.

2 unchanged sentences

Under the 2021 Agreement, the Company sold 10,004,869 shares of common stock resulting in approximately $ 121.0 million in proceeds, net of $ 4.0 million commission and other offering costs.

As of June 30, 2023, there were no remaining shares available under the 2021 Agreement.

As of September 30, 2023, there were no remaining shares available under the 2021 Agreement.

Public Offering

5 unchanged sentences

On January 24, 2022, 760,870 of the Pre-Funded Warrants were exercised, resulting in the issuance of 760,870 shares of common stock.

As of June 30, 2023, there were 869,566 remaining Pre-Funded Warrants unexercised.

As of June 30, 2023, including the remaining 869,566 Pre-Funded Warrants, there were 1,015,166 outstanding warrants with a weighted-average exercise price of $ 0.66 and weighted-average contractual term of 0.4 years.

As of September 30, 2023, there were 869,566 remaining Pre-Funded Warrants unexercised.

Subsequent to September 30, 2023, the remaining Pre-Funded Warrants were net cashless exercised, and currently no Pre-Funded Warrants remain available for exercise (see Note 11 Subsequent Events).

As of September 30, 2023, including the remaining 869,566 Pre-Funded Warrants, there were 1,015,166 outstanding warrants with a weighted-average exercise price of $ 0.66 and weighted-average contractual term of 0.2 years.

Stock-Based Compensation

1 unchanged sentence

The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years .

As of June 30, 2023, there was $ 19.5 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 3.0 years.

During the six months ended June 30, 2023, the Company granted 1,506,226 stock options with a weighted average exercise price of $ 10.91 and per share weighted average grant date fair value of $ 8.85 .

Information related to stock options outstanding as of June 30, 2023 is as follows:

As of September 30, 2023, there was $ 17.9 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 2.7 years.

During the nine months ended September 30, 2023, the Company granted 1,760,026 stock options with a weighted average exercise price of $ 9.71 and per share weighted average grant date fair value of $ 7.86 .

Information related to stock options outstanding as of September 30, 2023 is as follows:

Weighted-Average

4 unchanged sentences

Value (In thousands)

Vested and expected to vest

Restricted Stock Units (RSUs)

During the six months ended June 30, 2023, the Company granted 319,700 shares of RSUs with a weighted average grant date fair value of $ 13.20 which vest over four years .

As of June 30, 2023, the Company had unvested RSUs of 620,417 shares with total unrecognized compensation expense of $ 5.6 million, which the Company expects to recognize over a weighted average period of approximately 3.0 years.

During the six months ended June 30, 2023, the Company issued 60,667 shares of unrestricted common stock as a result of the vesting of 98,768 RSUs net of 38,101 shares of common stock withheld to satisfy tax withholding obligations.

During the nine months ended September 30, 2023, the Company granted 319,700 shares of RSUs with a weighted average grant date fair value of $ 13.20 which vest over four years .

As of September 30, 2023, the Company had unvested RSUs of 618,543 shares with total unrecognized compensation expense of $ 5.1 million, which the Company expects to recognize over a weighted average period of approximately 2.7 years.

During the nine months ended September 30, 2023, the Company issued 61,928 shares of unrestricted common stock as a result of the vesting of 100,642 RSUs net of 38,714 shares of common stock withheld to satisfy tax withholding obligations.

2019 Employee Stock Purchase Plan (ESPP)

Under the ESPP, employees purchased 13,215 shares for $ 0.1 million during the six months ended June 30, 2023.

During the three and six months ended June 30, 2023, the Company recognized compensation expense of $ 0.1 million and $ 0.2 million, respectively.

During the three and six months ended June 30, 2022, the Company recognized compensation expense of $ 47,000 and $ 0.1 million, respectively.

Under the ESPP, employees purchased 41,560 shares for $ 0.2 million during the nine months ended September 30, 2023.

During the nine months ended September 30, 2023 and 2022, the Company recognized compensation expense of $ 0.1 million and $ 0.2 million, respectively.

Stock-based Compensation Expense

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 and 2022 as follows (in thousands):

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023 and 2022 as follows (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

1 unchanged sentence

Net Loss Per Share

Because the Company has reported a net loss attributable to common stockholders for the six months ended June 30, 2023 and 2022, basic and diluted net loss per share attributable to common stockholders in each period are the same.

Because the Company has reported a net loss attributable to common stockholders for the nine months ended September 30, 2023 and 2022, basic and diluted net loss per share attributable to common stockholders in each period are the same.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average numbers of shares of common stock outstanding for the period.

3 unchanged sentences

Potential common shares issuable upon conversion, vesting or exercise of unvested restricted stock, RSUs, common stock warrants, and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows:

Six Months Ended

Nine Months Ended

September 30,

Common stock warrants

7 unchanged sentences

As part of the agreement, the Company is obligated to make payments of up to $ 80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma Inc.

(the “Sales Milestone”) within ten years following the approval of a new drug application filed with the FDA.

(the “Sales Milestone”) within ten years following the approval of a new drug application filed with the U.

Food and Drug Administration (the “FDA”).

The contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies .

1 unchanged sentence

The Company is a party in various contracts and subject to disputes, litigation, and potential claims arising in the ordinary course of business none of which are currently reasonably possible or probable of material loss.

Subsequent Events

On October 18, 2023, warrant holders exercised the remaining 869,566 Pre-Funded Warrants in a net cashless exercise and were issued 869,530 shares of common stock in a net cashless exercise (see Note 7 Common Stock).

In addition, in October 2023, 95,600 various other warrants with a weighted-average exercise price of $ 5.31 expired unexercised.

The only remaining outstanding 50,000 warrants have an exercise price of $ 3.21 and have a maturity date of March 12, 2024.

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.

What changed 10-Q

Item 1. Financial Statements