What changed in this filing

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Item 1. Financial Statements

2020-08-05 compared with 2020-05-08 · 230 added, 162 removed, 385 unchanged (50% of the section changed)

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Common stock, $ 0.001 par value;

100,000,000 shares authorized as of March 31, 2020 and December 31, 2019;

32,624,725 and 32,558,307 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively

100,000,000 shares authorized as of June 30, 2020 and December 31, 2019;

32,807,519 and 32,558,307 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Accumulated deficit

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ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands except for share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Collaboration revenue

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Total operating expenses

Loss from operations

Income (loss) from operations

Interest and other income, net

Total other income

Loss before income taxes

Income (loss) before income taxes

Income tax benefit

Other comprehensive (loss) income

Net income (loss)

Other comprehensive income

Unrealized gain on marketable securities, net of tax

Comprehensive loss

Net loss per share, basic and diluted

Weighted average common shares outstanding, basic and diluted

Comprehensive income (loss)

Net income (loss) per share, basic

Weighted average common shares outstanding, basic

Net income (loss) per share, diluted

Weighted average common shares outstanding, diluted

See Accompanying Notes to Condensed Consolidated Financial Statements

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

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Stock-based compensation

Net accretion and amortization of investments in marketable securities

Net accretion and amortization of investments in marketable debt securities

Non-cash rent expense

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Proceeds from the exercise of stock options

Proceeds from the issuance of common stock under Employee Stock Purchase Plan (ESPP)

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

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(In thousands except for share amounts)

For the Three Month Period

Comprehensive

Income (Loss)

Stockholders'

Balance as of December 31, 2019

Balance as of March 31, 2020

Issuance of common stock upon exercise of stock options

Issuance of common stock under ESPP

Issuance of shares of common stock for settlement of restricted stock units (RSUs)

Unrealized gain on marketable securities

Unrealized gain on marketable debt securities

Stock-based compensation

Balance as of June 30, 2020

Comprehensive

Stockholders'

Balance as of March 31, 2019

Issuance of common stock upon exercise of stock options

Issuance of common stock under ESPP

Issuance of shares of common stock for settlement of RSUs

Unrealized gain on marketable debt securities, net of tax

Stock-based compensation

Balance as of June 30, 2019

For the Six Month Period

Comprehensive

Income (Loss)

Stockholders'

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Issuance of common stock upon exercise of stock options

Issuance of common stock under ESPP

Issuance of shares of common stock for settlement of RSUs

Reclassification of stock-based awards from equity to accrued expenses

Unrealized gain on marketable debt securities

Stock-based compensation

Balance as of June 30, 2020

Comprehensive

Stockholders'

Balance as of December 31, 2018

Issuance of common stock upon exercise of stock options

Issuance of common stock under ESPP

Issuance of shares of common stock for settlement of RSUs

Settlement of RSUs for cash

Unrealized gain on marketable securities, net of tax

Unrealized gain on marketable debt securities, net of tax

Stock-based compensation

Balance as of March 31, 2019

Balance as of June 30, 2019

See Accompanying Notes to Condensed Consolidated Financial Statements

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a novel class of oral therapeutic candidates targeting chronic hepatitis B virus (HBV) infection and a novel class of oral live microbial biotherapeutic candidates, which are designed to treat disorders associated with the microbiome.

The Company operates in one segment and is headquartered in South San Francisco, California, with operations in South San Francisco, California and Groton, Connecticut.

Prior to January 1, 2020, the Company was headquartered in Carmel, Indiana, and the Company expects to continue maintaining this office for a period of time.

The Company operates in one segment and is headquartered in South San Francisco, California, with operations in California, Connecticut and China.

The Company’s HBV Cure program is pursuing multiple drug candidates that inhibit the HBV lifecycle and block the generation of covalently closed circular DNA (cccDNA), with the aim of increasing the current low cure rates for patients with chronic HBV infection.

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That platform is complemented by a licensed patented delivery system that the Company calls GEMICEL®, which is designed to allow for targeted oral delivery of live biologic and conventional therapies to the lower gastrointestinal (GI) tract.

Using the Company’s microbiome platform, the Company is exploring product candidates for multiple disease indications, including ulcerative colitis (UC), Crohn’s disease and irritable bowel syndrome (IBS) with Allergan Pharmaceuticals International Limited (Allergan) in connection with its Research, Development, Collaboration and License Agreement (the Collaboration Agreement).

Assembly is also exploring the microbiome in connection with immune-mediated and metabolic disorders and oncology, which indications the Company will either pursue internally or in collaboration with other parties.

Using the Company’s microbiome platform, the Company is exploring product candidates for multiple disease indications, including ulcerative colitis (UC), Crohn’s disease and irritable bowel syndrome (IBS) in connection with its Research, Development, Collaboration and License Agreement (the Allergan Collaboration Agreement) with Allergan Pharmaceuticals International Limited (Allergan), which was acquired by AbbVie Inc.

(AbbVie) in May 2020.

In June 2020, AbbVie made a strategic portfolio decision to terminate the Allergan Collaboration Agreement effective on October 10, 2020 (see Note 8).

Assembly is also exploring the microbiome in connection with immune-mediated and metabolic disorders and oncology.

The Company has not derived any revenue from product sales to date and currently has no approved products.

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Food and Drug Administration (FDA) or an applicable foreign regulatory agency.

Since inception, the Company’s operations have been financed primarily through the sale of equity securities, proceeds from the exercise of warrants and stock options, issuance of debt and an upfront payment related to the Collaboration Agreement.

The Company has incurred losses from operations since inception and expects to continue to incur substantial losses for the next several years as it continues its product development efforts.

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The Company cannot assure such funding will be available on reasonable terms, if at all.

Market volatility resulting from the COVID-19 pandemic or other factors could also adversely impact the Company’s ability to access capital when and as needed.

If the Company is unable to generate sufficient revenue from the Collaboration Agreement, secure additional sources of funding or receive full and timely collections of amounts due, it may be necessary to significantly reduce the current rate of spending through reductions in staff and delaying, scaling back, or stopping certain research and development programs, including more costly clinical trials.

Market volatility resulting from the global novel coronavirus disease (COVID-19) pandemic or other factors could also adversely impact the Company’s ability to access capital when and as needed.

If the Company is unable to generate sufficient revenue from its collaborations, secure additional sources of funding or receive full and timely collections of amounts due, it may be necessary to significantly reduce the current rate of spending through reductions in staff and delaying, scaling back, or stopping certain research and development programs, including more costly clinical trials.

ASSEMBLY BIOSCIENCES, INC.

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GAAP and should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2019, which are contained in the Company’s Annual Report on Form 10-K as filed with the SEC on March 4, 2020.

The results for the three months ended March 31, 2020 are not necessarily indicative of results to be expected for the entire year ending December 31, 2020 or future operating periods.

The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the entire year ending December 31, 2020 or future operating periods.

Use of Estimates

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Actual results could differ from those estimates.

Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include revenue recognition, clinical trial accruals, recoverability and useful lives (indefinite or finite) of intangible assets, assessment of impairment of goodwill, provisions for income taxes, amounts receivable and recognized as revenue under the Collaboration Agreement, measurement of operating lease liabilities, and the fair value of stock options, stock appreciation rights, and restricted stock units (RSUs) granted to employees, directors and consultants.

Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include revenue recognition, clinical trial accruals, recoverability and useful lives (indefinite or finite) of intangible assets, assessment of impairment of goodwill, provisions for income taxes, amounts receivable and recognized as revenue under the Allergan Collaboration Agreement, measurement of operating lease liabilities, and the fair value of stock options, stock appreciation rights, and restricted stock units (RSUs) granted to employees, directors and consultants.

The Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions.

It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates and assumptions.

It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ materially from those estimates and assumptions.

Other Risks and Uncertainties

In March 2020, the World Health Organization declared the global novel coronavirus disease (COVID-19) outbreak a pandemic.

To date, the Company’s operations have not been significantly impacted by the COVID-19 outbreak.

However, the Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its condensed consolidated financial condition and operations.

The impact of the COVID-19 coronavirus outbreak on the financial performance of the Company will depend on future developments, including the duration and spread of the outbreak and related governmental advisories and restrictions.

These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

To date, the Company’s operations have not been significantly impacted by the COVID-19 pandemic.

However, the Company cannot at this time predict the specific extent, duration, or full impact the COVID-19 pandemic will have on its business, operations, strategy, prospects and financial condition and results.

The impact of the COVID-19 pandemic on the financial performance of the Company will depend on future developments, including the duration and spread of the outbreak and related governmental advisories and restrictions.

These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain.

If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected.

On March 18, 2020, the Families First Coronavirus Response Act (“FFCR Act”), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) were each enacted in response to the COVID-19 pandemic.

In March 2020, the Families First Coronavirus Response Act (FFCR Act) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) were each enacted in response to the COVID-19 pandemic.

The FFCR Act and the CARES Act contain numerous income tax provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

The FFCR Act and CARES Act did not

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

have a material impact on the Company’s condensed consolidated financial statements as of March 31, 2020;

however, the Company continues to examine the impacts the FFCR Act and CARES Act may have on its business, results of operations, financial condition and liquidity.

Net Loss per Share

Basic net loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period.

Diluted net loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive.

Since the Company has only incurred losses, basic and diluted net loss per share is the same.

In June 2020, Assembly Bill 85 (A.B.

85) was signed into California law.

85 provides for a three-year suspension of the use of net operating losses for medium and large businesses and a three-year cap on the use of business incentive tax credits to offset no more than $ 5.0 million of tax per year.

85 suspends the use of net operating losses for taxable years 2020, 2021 and 2022 for certain taxpayers with taxable income of $ 1.0 million or more.

The carryover period for any net operating losses that are suspended under this provision will be extended.

85 also requires that business incentive tax credits including carryovers may not reduce the applicable tax by more than $ 5.0 million for taxable years 2020, 2021 and 2022.

The FFCR Act, CARES Act and A.B.

85 did not have a material impact on the Company’s condensed consolidated financial statements as of June 30, 2020;

however, the Company continues to examine the impacts the FFCR Act, CARES Act and A.B.

85 may have on its business, results of operations, financial condition and liquidity.

Net Income (Loss) per Share

Basic net income (loss) per common share excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive.

In December 2019, the Company sold 6,287,878 shares of common stock as well as pre-funded warrants to purchase up to 2,424,242 shares of common stock (see Note 6).

The pre-funded warrants are exercisable for shares of common stock at a price of $ 0.001 per share.

The shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, they are fully vested, and are exercisable after the original issuance date.

A reconciliation of the numerators and the denominators of the basic and diluted net loss per common share computations is as follows (in thousands, except per share amounts):

Three Months Ended March 31,

Weighted average common shares outstanding for diluted net (loss) income per share

Net (loss) income per share:

Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share because including them would have been antidilutive are as follows:

Three Months Ended March 31,

The shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date.

A reconciliation of the numerators and the denominators of the basic and diluted net income (loss) per common share computations is as follows (in thousands, except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

Shares used in per share calculation - basic

Dilutive effect of securities

Shares used in per share calculation - diluted

Net income (loss) per share:

Securities excluded from the computation of diluted income (loss) per share because including them would have been antidilutive are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Warrants to purchase common stock

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Unvested RSUs

As of June 30, 2020, 145,000 performance-based RSUs granted by the Company were excluded from the table above because they are subject to contingencies that were not achieved as of this date.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Adoption of Recent Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350):

In January 2017, the Financial Accounting Standards Board (FASB) issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment (ASU 2017-04), which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.

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In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates (ASU 2019-10), which deferred the effective

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

date of this standard for all entities except SEC filers that are not smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Effective Dates (ASU 2019-10), which deferred the effective date of this standard for all entities except SEC filers that are not smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017.

The Company early adopted ASU 2017-04 effective January 1, 2020.

The adoption of this standard had no impact on the Company’s condensed consolidated financial statements.

The adoption of this standard had no material impact on the Company’s condensed consolidated financial statements.

On January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements.

The adoption of this standard had no impact on the Company’s condensed consolidated financial statements and related disclosures.

The adoption of this standard had no material impact on the Company’s condensed consolidated financial statements and related disclosures.

On January 1, 2020, the Company adopted ASU 2018-18, Collaborative Arrangements (Topic 808):

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In December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12).

The ASU eliminates certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which eliminates certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

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The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

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Early adoption is permitted.

The Company is currently evaluating this new accounting standard but currently does not expect the adoption of this standard to have a material impact on its condensed consolidated financial statements and related disclosures.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company is evaluating this new accounting standard but currently does not expect the adoption of this standard to have a material impact on its condensed consolidated financial statements and related disclosures.

Note 3 – Investments in Marketable Securities

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Investments in marketable securities consisted of the following (in thousands):

March 31, 2020

June 30, 2020

Cash equivalents

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Total cash equivalents and investments

Gross unrealized gain (loss) is pre-tax.

ASSEMBLY BIOSCIENCES, INC.

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Gross unrealized gain (loss) is pre-tax.

The contractual term to maturity of short-term marketable securities held by the Company as of March 31, 2020 is less than one year .

There were no long-term marketable securities held by the Company as of March 31, 2020.

Realized gains and losses for the three months ended March 31, 2020 and 2019 were not significant.

None of the Company’s investments have been in a continuous unrealized loss position for more than 12 months as of March 31, 2020.

The contractual term to maturity of short-term marketable securities held by the Company as of June 30, 2020 is less than one year .

There were no long-term marketable securities held by the Company as of June 30, 2020.

Realized gains and losses for the three and six months ended June 30, 2020 and 2019 were not significant.

None of the Company’s investments have been in a continuous unrealized loss position for more than 12 months as of June 30, 2020.

The following tables present the fair value of the Company’s financial assets measured at fair value on a recurring basis (in thousands):

March 31, 2020

June 30, 2020

Cash equivalents

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Money market fund

U.S and foreign corporate debt securities

U.S and foreign commercial paper

and foreign corporate debt securities

and foreign commercial paper

Total cash equivalents

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Property and equipment, net

Depreciation expense was $ 0.1 million for both the three months ended March 31, 2020 and 2019 and was recorded in both research and development expense and general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

Depreciation expense was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020, respectively and $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2019, respectively and was recorded in both research and development expense and general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

Primarily all of property and equipment of the Company is located in the U.S.

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Total accrued expenses

Accrued restructuring charges relate to the Company’s decision to relocate its headquarters and key personnel to South San Francisco, California as approved by the Board of Directors in November 2019 and effective January 1, 2020.

Accrued restructuring charges relate to the Company’s decision to relocate its headquarters to South San Francisco, California as approved by the Board of Directors in November 2019 and effective January 1, 2020.

The Company accrued restructuring charges of $ 2.1 million in 2019 related to one-time severance payments and other employee-related costs associated with the relocation plan.

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Note 6 – Stockholders’ Equity

The Company is authorized to issue 5,000,000 shares of preferred stock as of March 31, 2020 and December 31, 2019, respectively.

As of March 31, 2020 and December 31, 2019, no shares of preferred stock were issued and outstanding.

The Company is authorized to issue 100,000,000 shares of common stock as of March 31, 2020 and December 31, 2019, respectively.

The Company is authorized to issue 5,000,000 shares of preferred stock as of June 30, 2020 and December 31, 2019, respectively.

As of June 30, 2020 and December 31, 2019, no shares of preferred stock were issued and outstanding.

The Company is authorized to issue 100,000,000 shares of common stock as of June 30, 2020 and December 31, 2019, respectively.

Sale of Common Stock and Pre-Funded Warrants

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In connection with the filing of this Registration Statement, the Company entered into a sales agreement under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 75.0 million through “at the market offerings” (ATM).

As of March 31, 2020, no shares have been sold under the ATM program and $ 21.4 million remains available for sale under this Registration Statement.

As of June 30, 2020, no shares have been sold under the ATM program and $ 21.4 million remains available for sale under this Registration Statement.

In December 2019, the Company sold to various investors an aggregate of 6,287,878 shares of common stock at a public offering price of $ 16.50 per share, which included the exercise in full by the underwriters of their option to purchase 1,136,363 additional shares of common stock, and pre-funded warrants to purchase 2,424,242 shares of common stock at a public offering price of $ 16.499 per warrant.

The Company received aggregate net proceeds of $ 134.7 million from the offering and the option exercise, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

The pre-funded warrants are exercisable immediately upon issuance at an exercise price of $ 0.001 per share.

Per their terms, the outstanding pre-funded warrants to purchase shares of the Company’s common stock generally may not be exercised if the holder’s ownership of the Company’s common stock would exceed 19.99 % following such exercise.

The pre-funded warrants became immediately exercisable upon issuance at an exercise price of $ 0.001 per share, but under their terms, the outstanding pre-funded warrants to purchase shares of the Company’s common stock generally may not be exercised if the holder’s ownership of the Company’s common stock would exceed 19.99 % following such exercise.

The exercise price and number of shares of common stock issuable upon the exercise of the pre-funded warrants (Warrant Shares) are subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the pre-funded warrant agreements.

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Both the pre-funded warrants and the Warrant Shares are registered securities.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The pre-funded warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date using a relative fair value allocation method.

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The Company valued the pre-funded warrants at issuance, concluding their sales price approximated their fair value, and allocated net proceeds from the sale proportionately to the common stock and pre-funded warrants of which $ 37.5 million was allocated to the pre-funded warrants and recorded as a component of additional paid-in-capital.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Common Stock Warrants

As of, March 31, 2020 and December 31, 2019 the following warrants to purchase shares of the Company’s common stock were issued and outstanding:

As of June 30, 2020 and December 31, 2019 the following warrants to purchase shares of the Company’s common stock were issued and outstanding:

Exercise Price

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December 16, 2019

There were no warrants exercised during the three months ended March 31, 2020 or 2019.

There were no warrants exercised during the three and six months ended June 30, 2020 or 2019.

Note 7 – Stock Plans and Stock-Based Compensation

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Employee Stock Purchase Plan (the 2018 ESPP) pursuant to which the Company reserved 400,000 shares of its common stock for issuance in connection with purchases by employees pursuant to this plan.

In May 2019, the Company’s stockholders approved an amendment to the 2018 Plan that increased the aggregate shares of common stock reserved under the 2018 Plan to 3,000,000 .

As of March 31, 2020, the Company had awards outstanding under the following shareholder-approved plans:

In May 2019, the Company’s stockholders approved an amendment to the 2018 Plan that increased the aggregate number of shares of common stock reserved under the 2018 Plan to 3,000,000 .

In June 2020, the Company’s stockholders approved an amendment to the 2018 Plan that increased the aggregate number of shares of common stock reserved under the 2018 Plan to 4,600,000 .

As of June 30, 2020, the Company had awards outstanding under the following shareholder-approved plans:

2010 Equity Incentive Plan (the 2010 Plan), which has been frozen;

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Shares of common stock underlying awards that are forfeited under the 2010 Plan on or after June 2, 2016 will become available for issuance under the 2014 Plan.

As of March 31, 2020, the Company also had awards outstanding under the Assembly Biosciences, Inc.

As of June 30, 2020, the Company also had awards outstanding under the Assembly Biosciences, Inc.

2017 Inducement Award Plan (the 2017 Plan), the Assembly Biosciences, Inc.

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Stock Options

A summary of the Company’s option activity and related information for the three months ended March 31, 2020 is as follows:

A summary of the Company’s option activity and related information for the six months ended June 30, 2020 is as follows:

Outstanding as of December 31, 2019

Outstanding as of March 31, 2020

Options vested and exercisable as of March 31, 2020

The weighted-average grant-date fair value of options granted was $ 9.74 and $ 13.71 during the three months ended March 31, 2020 and 2019, respectively.

The total intrinsic value of options exercised during the three months ended March 31, 2020 and 2019 was $ 0.2 million and $ 0.3 million, respectively.

A summary of the Company’s RSUs and related information for the three months ended March 31, 2020 is as follows:

Outstanding as of June 30, 2020

Options vested and exercisable as of June 30, 2020

The weighted-average grant-date fair value of options granted was $ 10.52 and $ 12.68 during the six months ended June 30, 2020 and 2019, respectively.

The total intrinsic value of options exercised during the six months ended June 30, 2020 and 2019 was $ 1.0 million and $ 0.7 million, respectively.

A summary of the Company’s RSUs and related information for the six months ended June 30, 2020 is as follows:

Value Per RSU

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Nonvested as of December 31, 2019

Nonvested as of March 31, 2020

Nonvested as of June 30, 2020

Includes 157,500 RSUs that have vested but are subject to deferred settlement, which have a weighted average remaining contractual term of 1.7 years.

The total fair value of RSUs vested and settled during the three months ended March 31, 2020 and 2019 as $ 2.4 million and $ 2.2 million, respectively.

The total intrinsic value of RSUs vested and settled during the three months ended March 31, 2020 and 2019 was $ 1.5 million and $ 1.3 million, respectively.

As of March 31, 2020, RSUs outstanding include 45,000 RSUs granted in December 2017 and 100,000 RSUs granted in September 2019 to executives of the Company, each with performance-based conditions.

The total fair value of these awards is $ 0.7 million and $ 1.2 million, respectively.

The performance conditions upon which these awards will vest are not yet deemed probable of being met, and accordingly no compensation expense has been recognized as of March 31, 2020 for these awards.

The total fair value of RSUs vested and settled during the six months ended June 30, 2020 and 2019 was $ 3.1 million and $ 2.9 million, respectively.

The total intrinsic value of RSUs vested and settled during the six months ended June 30, 2020 and 2019 was $ 1.6 million and $ 1.3 million, respectively.

As of June 30, 2020, RSUs outstanding include 45,000 RSUs granted in December 2017 and 100,000 RSUs granted in September 2019 to executives of the Company with performance-based conditions vesting conditions.

As of June 30, 2020, the performance condition for the 45,000 RSUs granted in December 2017 was deemed probable of being met and was subsequently achieved in July 2020.

The Company recognized $ 0.7 million as a cumulative catch-up adjustment of stock-based compensation expense for this award for the three and six months ended June 30, 2020.

The remaining 100,000 awards with an aggregate fair value of $ 1.2 million vest upon performance conditions not yet deemed probable and accordingly no stock-based compensation expense has been recognized as of June 30, 2020.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Employees purchased 42,266 and 36,804 shares of common stock under the 2018 ESPP during the six months ended June 30, 2020 and 2019, respectively.

Valuation Assumptions

The fair value of the stock options granted or modified during the periods indicated was estimated using the Black-Scholes option pricing model, based on the following assumptions:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Exercise price

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$15.22 - $57.33

$14.45 - $20.52

$15.22 - $57.33

Expected volatility

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66.2% - 83.0%

66.38% - 82.24%

66.2% - 83.2%

Risk-free rate

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2.17% - 2.47%

0.36% - 1.44%

2.17% - 2.65%

Expected term (years)

4 unchanged sentences

The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

As of March 31, 2020, there was $ 34.5 million of total unrecognized stock-based compensation related to outstanding equity awards which is expected to be recognized over a weighted average remaining amortization period of 1.8 years.

Note 8 - Collaboration Agreement

In January 2017, the Company entered into the Collaboration Agreement with Allergan to develop and commercialize select microbiome gastrointestinal disease therapies.

Pursuant to the Collaboration Agreement, the Company granted to Allergan an exclusive worldwide license to certain of its intellectual property, including its intellectual property arising under the Collaboration Agreement, to develop and commercialize licensed compounds for UC, Crohn’s disease, and two compounds for IBS.

Allergan and the Company also agreed to collaborate on research and development activities with respect to the licensed compounds in accordance with a mutually agreed upon research and development plan.

Per the terms of the Collaboration Agreement, Allergan can select backups and additional target indications to add to the licenses granted for additional consideration and also has the ability to enter into a contract manufacturing agreement with the Company for compound supply at cost plus an agreed upon margin.

In addition, the Company will participate on a Joint Development Committee (JDC) and Joint Patent Committee (JPC).

Includes the reversal of previously recognized stock-based compensation expense of $ 3.6 million related to forfeited awards resulting from the departure of one of the Company’s former officers during the period.

As of June 30, 2020, there was $ 32.2 million of total unrecognized stock-based compensation related to outstanding equity awards which is expected to be recognized over a weighted average remaining amortization period of 1.8 years.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - Collaboration Agreement

Termination of Allergan Collaboration Agreement

In January 2017, the Company entered into the Allergan Collaboration Agreement with Allergan to develop and commercialize select microbiome gastrointestinal disease therapies.

Pursuant to the Allergan Collaboration Agreement, the Company granted to Allergan an exclusive worldwide license to certain of its intellectual property, including its intellectual property arising under the Allergan Collaboration Agreement, to develop and commercialize licensed compounds for UC, Crohn’s disease, and two compounds for IBS.

Per the terms of the Allergan Collaboration Agreement, Allergan could select backups and additional target indications to add to the licenses granted for additional consideration and also had the ability to enter into a contract manufacturing agreement with the Company for compound supply at cost plus an agreed upon margin.

In addition, the Company participated in a Joint Development Committee (JDC) and Joint Patent Committee (JPC).

Allergan had the right to terminate the Allergan Collaboration Agreement at any time upon advance written notice.

In June 2020, following its acquisition of Allergan, AbbVie, on behalf of Allergan, gave written notice of termination of the Allergan Collaboration Agreement, effective 120 days following the delivery of notice, on October 10, 2020.

Upon termination, the licenses granted by the Company and its know-how will revert to the Company.

Under the terms of the Allergan Collaboration Agreement, AbbVie is obligated to continue to reimburse the Company for certain research and development costs through October 10, 2020.

Upon effectiveness of the termination, such reimbursements will cease.

Due to the delivery of the termination notice, the Company determined that there were no further enforceable rights and obligations under the Allergan Collaboration Agreement beyond June 2020 and the remaining $ 36.0 million of deferred revenue was recognized in the period.

History of the Allergan Collaboration Agreement

Allergan paid the Company an upfront non-refundable payment of $ 50.0 million, which was received in 2017.

Additionally, the Company is eligible to receive variable consideration in the form of research and development cost reimbursements, up to $ 631.0 million related to seven development milestones and up to $ 2.14 billion related to 12 commercial development and sales milestones in connection with the successful development and commercialization of licensed compounds.

In addition, the Company is eligible to receive tiered royalties at rates ranging from the mid-single digits to the mid-teens based on net sales.

Allergan and the Company have agreed to share research and development costs up to an aggregate of $ 75.0 million through proof-of-concept (POC) studies on a ⅔, ⅓ basis, respectively, and Allergan has agreed to assume all post-POC development costs.

In the event any pre-POC development costs exceed $ 75.0 million in the aggregate, the Company may elect either (a) to fund ⅓ of such costs in excess of $ 75.0 million or (b) to allow Allergan to deduct from future development milestone payments ⅓ of the development costs funded by Allergan in excess of $ 75.0 million plus a premium of 25 %.

The Company has an option to co-promote the licensed programs in the U.S.

and China, subject to certain conditions set forth in the Collaboration Agreement.

Allergan may terminate the Collaboration Agreement at any time upon 90 days’ (prior to the initiation of the first POC trial of a licensed product) or 120 days’ (after the initiation of the first POC trial of a licensed product), as applicable, advance written notice to the Company.

Unless terminated early, the Collaboration Agreement has a term that ends on the earlier of the (i) the period when POC studies have been completed and no further licensed compounds or licensed products are in development, and (ii) expiration of the last to exist valid claim covering the manufacture, use and sale of the licensed products.

The Collaboration Agreement also contains customary provisions for termination by either party, including in the event of breach of the Collaboration Agreement, subject to cure.

Upon termination for convenience, the licenses granted by the Company and its know-how all revert to the Company.

The Company concluded that Allergan is a customer, and the contract is not subject to accounting literature on collaborative arrangements.

In addition, the Company was eligible to receive tiered royalties at rates ranging from the mid-single digits to the mid-teens based on net sales.

Allergan and the Company agreed to share research and development costs up to an aggregate of $ 75.0 million through proof-of-concept (POC) studies on a ⅔, ⅓ basis, respectively, and Allergan agreed to assume all post-POC development costs.

In the event any pre-POC development costs exceed $ 75.0 million in the aggregate, the Company could have elected either (a) to fund ⅓ of such costs in excess of $ 75.0 million or (b) to allow Allergan to deduct from future development milestone payments ⅓ of the development costs funded by Allergan in excess of $ 75.0 million plus a premium of 25 %.

The Company had an option to co-promote the licensed programs in the U.S.

and China, subject to certain conditions set forth in the Allergan Collaboration Agreement.

The Company concluded that Allergan was a customer, and the contract was not subject to accounting literature on collaborative arrangements.

This is because the Company granted to Allergan licenses to its intellectual property and research and development services, all of which are outputs of the Company’s ongoing activities, in exchange for consideration.

The Company identified the following material promises under the Collaboration Agreement:

The Company identified the following material promises under the Allergan Collaboration Agreement:

(1) grant of licenses to intellectual property for the four initial indications, inclusive of the related technology know-how (Licenses) and (2) the obligation to perform research development services through POC (Development Services).

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Allergan’s selection of backups or additional target indications to add to the licenses granted for additional consideration and ability to enter into a contract manufacturing agreement with the Company for compound supply at cost plus an agreed upon margin were not considered to be performance obligations as the Company concluded the options were not offered at a discount that exceeds discounts available to other customers, and therefore were not material rights.

The grant of additional licensing rights upon option exercises and contract manufacturing agreements will be accounted for as separate contracts when they occur.

The Company concluded the Licenses each were considered to be functional as they have significant standalone functionality and were capable of being distinct.

However, the Company determined that each of the Licenses individually were not distinct from the Development Services within the context of the agreement.

This is because Allergan is dependent on the Company to execute the Development Services, which it is uniquely able to perform, in order for Allergan to benefit from the Licenses.

As such, the Company determined that it has four performance obligations under the Collaboration Agreement associated with the grant of the four compound Licenses combined with the performance of the Development Services for each of the four compound indications.

The Company determined that the four performance obligations will be performed over the duration of the contract, which began in February 2017 and ends upon completion of the Development Services which is currently estimated to occur in 2025.

The Company is using a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize.

The Company believes this is the best measure of progress because other measures do not reflect how the Company transfers its performance obligation to Allergan.

In applying the cost-based input method of revenue recognition, the Company measures costs incurred relative to budgeted costs to fulfill the four performance obligations.

These costs consist primarily of third-party contract costs and internal labor costs.

Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations.

The grant of additional licensing rights upon option exercises and contract manufacturing agreements were to be accounted for as separate contracts when or if they occurred.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company concluded the Licenses each were considered to be functional as they ha d significant standalone functionality and were capable of being distinct.

However, the Company determined that each of the Licenses individually were not distinct from the Development Services within the context of the agreement.

This is because Allergan wa s dependent on the Company to execute the Development Services, which it wa s uniquely able to perform, in order for Allergan to benefit from the Licenses.

As such, the Company determined that it ha d four performance obligations under the Allergan Collaboration Agreement associated with the grant of the four compound Licenses combined with the performance of the Development Services for each of the four compound indications.

The Company determined that the four performance obligations would have been performed over the duration of the contract, which began in February 2017 and ended upon receipt of the termination notice .

The Company used a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize.

The Company believe d this was the best measure of progress because other measures do not reflect how the Company transfers its performance obligation to Allergan.

In applying the cost-based input method of revenue recognition, the Company measure d costs incurred relative to budgeted costs to fulfill the four performance obligations.

These costs consist ed primarily of third-party contract costs and internal labor costs.

Revenue was recognized based on actual costs incurred as a percentage of total budgeted costs as the Company complete d its performance obligations.

To allocate transaction price among the four performance obligations, the Company estimated their standalone selling price (SSP) using an income-based valuation approach for the estimated value a licensor of the compounds would receive considering the stage of the compounds’ development.

The Company believes that a change in the assumptions used to determine its best estimate of selling price for the four performance obligations would not have a significant effect on the allocation of consideration received to the four performance obligations.

The transaction price at the inception of the agreement and upon adoption of ASC 606 was limited to $ 50.0 million upfront payment.

A change in the assumptions used to determine its best estimate of selling price for the four performance obligations would not have had a significant effect on the allocation of consideration received to the four performance obligations.

The transaction price at the inception of the agreement and upon adoption of the revenue from contracts with customers guidance was limited to $ 50.0 million upfront payment.

Of this amount, the Company allocated $ 12.5 million to each of the four performance obligations.

Research and development cost reimbursement payments are included in the transaction price in the reporting period that the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods.

The variable consideration related to the remaining development and commercialization milestone payments has not been included in the transaction price as these were fully constrained at September 30, 2019.

As part of the Company’s evaluation of the development and commercialization milestones constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals which are not within its control and uncertain at this stage.

Any variable consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Allergan.

The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Any variable consideration related to sales-based milestones (including royalties) would have been recognized when the related sales occur as they were determined to relate predominantly to the license granted to Allergan.

The Company re-evaluated the transaction price in each reporting period and as uncertain events were resolved or other changes in circumstances occur.

The Company did not incur any significant incremental costs of obtaining the Allergan contract.

For the three months ended March 31, 2020 and 2019, the Company recognized $ 4.1 million and $ 3.9 million, respectively, in revenue associated with the Collaboration Agreement.

Short-term and long-term deferred revenue contract liabilities related to the Collaboration Agreement were $ 6.7 million and $ 29.3 million at March 31, 2020 and $ 6.4 million and $ 30.6 million at December 31, 2019.

On the unaudited condensed consolidated balance sheets, contract asset balances of $ 3.1 million and $ 3.4 million were recorded as accounts receivable from collaboration as of March 31, 2020 and December 31, 2019, respectively.

For the six months ended June 30, 2020 and 2019, the Company recognized $ 43.5 million and $ 7.0 million, respectively, in revenue associated with the Allergan Collaboration Agreement.

Short-term and long-term deferred revenue contract liabilities related to the Allergan Collaboration Agreement were $ 6.4 million and $ 30.6 million at December 31, 2019.

There were no deferred revenue contract liabilities as of June 30, 2020 due to the Company recognizing a cumulative catch-up adjustment of the remaining deferred revenue balance during the three months ended June 30, 2020 for the determined completion of the Company’s performance obligations under the Allergan Collaboration Agreement upon receipt of the notice of termination from AbbVie.

On the unaudited condensed consolidated balance sheets, contract asset balances of $ 3.3 million and $ 3.4 million were recorded as accounts receivable from collaboration as of June 30, 2020 and December 31, 2019, respectively.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents changes in the Company’s contract liabilities (in thousands):

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Contract liabilities:

Deferred revenue

Three Months Ended March 31, 2019

Six Months Ended June 30, 2019

Contract liabilities:

Deferred revenue

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Collaboration revenue recognized in the period from

1 unchanged sentence

Performance obligations satisfied in previous period

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - Milestones and Research Agreements

5 unchanged sentences

The Company is also required to pay diligence maintenance fees each year to the extent that the royalty, sublicensing, and milestone payments to IURTC are less than such fees for that year.

Amounts paid in the three months ended March 31, 2020 and 2019 were insignificant.

Amounts paid in the six months ended June 30, 2020 and 2019 were insignificant.

Microbiome Targeted Colonic Delivery Platform

6 unchanged sentences

Therabiome must pay the Company royalties on annual net sales of any product Therabiome is permitted to develop using the intellectual property in the low double to mid-double-digit percentages, depending on the level of development or involvement the Company had in the product.

No amounts were accrued for this agreement as of and for the three months ended March 31, 2020.

A regulatory milestone was determined to have occurred and $ 0.1 million was paid under this agreement as of and during the three months ended March 31, 2019.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

No amounts were accrued for this agreement as of and for the six months ended June 30, 2020.

Two regulatory milestones were determined to have occurred under this agreement and $ 0.3 million was accrued and included in accrued expenses during the six months ended June 30, 2019.

Note 10 - Leases

1 unchanged sentence

The Company leases office space for corporate, administrative and laboratory functions in South San Francisco, California under a sub-sublease that expires in December 2023.

The Company also leases office space in Carmel, Indiana under a lease agreement that expires in August 2023 as well as office and laboratory space in Groton, Connecticut under a lease that expires in March 2021.

The Company also leases office space in Carmel, Indiana under a lease agreement that expires in August 2023, which the Company has subleased.

The Company also leases office and laboratory space in Groton, Connecticut under a lease that expires in March 2021.

The Company’s China subsidiary leases office space in Shanghai that expires in May 2021 and rents lab space in Shanghai under a lease agreement that expires in December 2020.

5 unchanged sentences

The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At March 31, 2020, the Company had operating lease liabilities of $ 11.8 million and ROU assets of $ 11.5 million, which were included in the condensed consolidated balance sheet.

At June 30, 2020, the Company had operating lease liabilities of $ 11.1 million and ROU assets of $ 10.8 million, which were included in the condensed consolidated balance sheet.

The following summarizes quantitative information about the Company’s operating leases (in thousands):

Three Months Ended

March 31, 2020

Three Months Ended

March 31, 2019

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease cost

2 unchanged sentences

Total lease cost

Three Months Ended

March 31, 2020

Three Months Ended

March 31, 2019

Six Months Ended June 30,

Operating cash flows from operating leases

ROU assets exchanged for new operating lease liabilities

As of March 31, 2020 and December 31, 2019, the weighted-average remaining lease term for operating leases was 3.4 years and 2.7 years, respectively.

As of both March 31, 2020 and December 31, 2019, the weighted-average discount rate for operating leases was 9.4 % .

As of March 31, 2020, the maturities of the Company’s operating lease liabilities were as follows (in thousands):

Nine months ended December 31, 2020

Year Ended December 31, 2021

Year Ended December 31, 2022

Year Ended December 31, 2023

As of June 30, 2020 and December 31, 2019, the weighted-average remaining lease term for operating leases was 3.3 years and 2.7 years, respectively.

As of June 30, 2020 and December 31, 2019, the weighted-average discount rate for operating leases was 9.5 % and 9.4 %, respectively.

ASSEMBLY BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2020, the maturities of the Company’s operating lease liabilities were as follows (in thousands):

Six months ending December 31, 2020

Year Ending December 31, 2021

Year Ending December 31, 2022

Year Ending December 31, 2023

present value discount

Operating lease liabilities

Note 11 – Subsequent Events

On July 17, 2020, the Company entered into a Collaboration Agreement (China Collaboration Agreement) with BeiGene, Ltd.

(BeiGene), granting BeiGene an exclusive, royalty-bearing license to develop and commercialize the Company’s novel core inhibitor product candidates ABI-H0731, ABI-H2158 and ABI-H3733 for chronic HBV infection (the Licensed Product Candidates) in the People’s Republic of China, Hong Kong, Taiwan and Macau (the Territory).

Pursuant to the terms of the China Collaboration Agreement, the Company received an upfront cash payment of $ 40.0 million from BeiGene, and the Company is eligible to receive up to approximately $ 500.0 million in cash milestone payments, comprised of up to $ 113.8 million for development and regulatory milestones and up to $ 385.0 million in net sales milestones.

In addition, the Company is eligible to receive tiered royalties at percentages ranging from the mid-teens to the low thirties of net sales.

BeiGene also agreed to pay all development and regulatory costs for the Licensed Product Candidates in the Territory up to an aggregate of $ 45.0 million.

Development and regulatory costs for the Licensed Product Candidates for the Territory in excess of $ 45.0 million will be shared equally by the Company and BeiGene.

The China Collaboration Agreement also contains provisions such as representations and warranties of the parties, terms as to governance of the collaboration, commercialization and regulatory responsibilities of the parties, and manufacturing and supply, including potential adjustments in the event supply costs exceed certain levels.

In addition, during the term of the China Collaboration Agreement, neither party will commercialize any competing products in the Territory.

If, after ABI-H2158 and ABI-H3733 reach the end of Phase 2 clinical trials, the Company and BeiGene are unable to mutually agree on the terms of a Phase 3 global study, BeiGene may elect to terminate the China Collaboration Agreement solely as it relates to that compound, as applicable.

Such a termination would result in the Company regaining all rights to the applicable compound in the Territory.

In addition, BeiGene may terminate the China Collaboration Agreement for convenience at any time upon 90 days’ advance written notice to us.

The China Collaboration Agreement also contains customary provisions for termination by either party, including in the event of breach of the China Collaboration Agreement, subject to cure.

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