What changed in this filing

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Item 1. Financial Statements

2020-08-13 compared with 2020-05-12 · 136 added, 111 removed, 319 unchanged (44% of the section changed)

6 unchanged sentences

Available-for-sale investments

Prepaid expenses and other assets

Other receivables

Prepaid expenses

Total current assets

7 unchanged sentences

Current portion of operating lease liability

Current portion of long-term debt, net of issuance costs and discount

Term loans, net of issuance costs and discount (Note 4)

Grant fund liability

Total current liabilities

4 unchanged sentences

5,000,000 undesignated authorized shares;

Class X Convertible Preferred Stock issued and outstanding shares – 0 and 1,643,961 as of March 31, 2020 (unaudited) and December 31, 2019, respectively

Class X Convertible Preferred Stock issued and outstanding shares – 0 and 1,643,961 as of June 30, 2020 (unaudited) and December 31, 2019, respectively

Common stock, $0.001 par value per share;

10,714,286 authorized shares;

issued and outstanding shares – 9,352,498 and 3,891,787 as of March 31, 2020 (unaudited) and December 31, 2019, respectively

21,425,000 and 10,714,286 authorized shares as of June 30, 2020 and December 31, 2019, respectively;

issued and outstanding shares – 9,383,425 and 3,891,787 as of June 30, 2020 (unaudited) and December 31, 2019, respectively

Additional paid-in capital

9 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

License revenues

4 unchanged sentences

Total operating expenses

Income (loss) from operations

Loss from operations

Total other expense, net

Consolidated net income (loss)

Consolidated net loss

Net loss attributable to noncontrolling interest in Pangu BioPharma Limited

Net income (loss) attributable to aTyr Pharma, Inc.

Basic net income (loss) per share

Shares used in computing basic net income (loss) per share

Diluted net income (loss) per share

Shares used in computing diluted net income (loss) per share

Net loss attributable to aTyr Pharma, Inc.

Net loss per share, basic and diluted

Shares used in computing net loss per share, basic and diluted

See accompanying notes.

aTyr Pharma, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

Three Months Ended March 31,

Consolidated net income (loss)

Three Months Ended June 30,

Six Months Ended June 30,

Consolidated net loss

Other comprehensive gain (loss):

Change in unrealized gain (loss) on available-for-sale investments, net of tax

Comprehensive income (loss)

Comprehensive loss

Comprehensive loss attributable to noncontrolling interest Pangu BioPharma Limited

Comprehensive income (loss) attributable to aTyr Pharma, Inc.

Comprehensive loss attributable to aTyr Pharma, Inc.

common stockholders

2 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

Three Months Ended March 31, 2020 (unaudited)

(in thousands, except share data)

Three and Six Months Ended June 30, 2020 (unaudited)

Preferred Stock

10 unchanged sentences

Balance as of March 31, 2020

Three Months Ended March 31, 2019 (unaudited)

Issuance of common stock upon release of restricted stock units

Issuance of common stock pursuant to employee stock purchase plan

Issuance of common stock from at the market offerings, net of offering costs

Stock-based compensation

Net unrealized gain on investments, net of tax

Balance as of June 30, 2020

Three and Six Months Ended June 30, 2019 (unaudited)

Preferred Stock

8 unchanged sentences

Balance as of March 31, 2019

Issuance of common stock upon release of restricted stock units

Issuance of common stock pursuant to employee stock purchase plan

Issuance of common stock from at the market offerings, net of offering costs

Issuance of common stock from registered direct offering, net of offering costs

Stock-based compensation

Net unrealized gain on investments, net of tax

Balance as of June 30, 2019

See accompanying notes.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Consolidated net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Consolidated net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

3 unchanged sentences

Amortization of right-of-use assets

Loss on disposal of property and equipment

Loss (gain) on disposal of property and equipment

Changes in operating assets and liabilities

Collaboration receivable

Other receivables

Prepaid expenses and other assets

2 unchanged sentences

Operating lease liability

Net cash provided by (used in) operating activities

Grant funding liability

Net cash used in operating activities

Cash flows from investing activities:

5 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock through employee stock purchase plan

Proceeds from issuance of common stock through at the market offerings, net of offering costs

Proceeds from issuance of common stock through registered direct offering, net of offering costs

Proceeds from issuance of common stock through underwritten follow-on offering, net of offering costs

Repayments on borrowings

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

19 unchanged sentences

The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Reverse Stock Split

On June 28, 2019, we filed a Certificate of Amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-14 reverse stock split of our issued and outstanding common stock.

The reverse stock split became effective at 5:00 p.m.

Eastern Time on June 28, 2019 and our common stock began trading on a split-adjusted basis on The Nasdaq Capital Market on July 1, 2019.

The accompanying condensed consolidated financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented.

All issued and outstanding common stock, options and warrants exercisable for common stock, restricted stock units, preferred stock conversions to common stock and per share amounts contained in our condensed consolidated financial statements have been retrospectively adjusted.

Risks and Uncertainties

In December 2019, COVID-19, a novel strain of coronavirus, was first reported in Wuhan, China, has been declared a pandemic by the World Health Organization and has spread to over 100 countries, including the United States.

The global pandemic resulting from the disease known as COVID-19, caused by a novel strain of coronavirus, SARS-CoV-2, has caused national and global economic and financial market disruptions.

The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will continue to cause significant disruptions to the global economy, as well as businesses and capital markets around the world.

3 unchanged sentences

Liquidity and Financial Condition

We have incurred losses and negative cash flows from operations since our inception.

As of March 31, 2020, we had an accumulated deficit of $320.6 million and we expect to continue to incur net losses for the foreseeable future.

We believe that our existing cash, cash equivalents and available-for-sale investments of $49.8 million as of March 31, 2020 will be sufficient to meet our anticipated cash requirements for a period of at least one year from the filing date of this Quarterly Report on Form 10-Q.

Other than the net income generated in the three months ended March 31, 2020, we have incurred losses and negative cash flows from operations since our inception.

As of June 30, 2020, we had an accumulated deficit of $327.0 million and we expect to continue to incur net losses for the foreseeable future.

We believe that our existing cash, cash equivalents and available-for-sale investments, of $41.4 million as of June 30, 2020, will be sufficient to meet our anticipated cash requirements for a period of one year from the filing date of this Quarterly Report.

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years at a minimum.

If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

Accordingly, we will need to raise substantial additional capital to fund our operations.

The amount and timing of our future funding requirements will depend on many factors, including, but not limited to, the pace and results of our preclinical and clinical development efforts and the timing and nature of the regulatory approval process for our product candidates.

If we obt ain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

Accordingly, we will need to raise substantial additional capital to f und our operations.

We anticipate that we will seek to fund our operations through equity offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements, and when we are closer to commercialization of our product candidates potentially through debt financings.

However, we may be unable to raise additional capital or enter into such arrangements when needed on favorable terms or at all.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have recently experienced extreme volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.

As a result of the COVID-19 pandemic and actions taken to slow its s pread, the global credit and financial markets have experienced extreme volatility and disruptions, includ ing diminished liquidity and credit availability, declines in consumer confidence, declines i n economic growth, increases in unemployment rates and un certainty about economic stability.

If the equity and credit markets continue to deteriorate, it may make any additional debt or equity financing more difficult, more costly and more dilutive.

Our failure to raise capital or enter into applicable arrangements when needed would have a negative impact on our financial condition and ability to develop our product candidates.

Our failure to raise capital or enter into applicable arrangeme nts when needed would have a negative impact on our financial condition and ability to develop our product candidates.

Use of Estimates

4 unchanged sentences

Though the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use the best information available to us in our critical accounting estimates.

We follow Accounting Standards Codification (ASC) Topic 842, Leases in recording our operating and financing lease.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

The reclassifications were not material to the condensed consolidated financial statements.

We follow Accounting Standards Codification (ASC) Topic 842, Leases in recording our operating and financing leases.

For our long-term operating leases, we recognized a right-of-use asset and a lease liability in our condensed consolidated balance sheets.

2 unchanged sentences

We determine the lease term at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise.

We did not elect the hindsight practical expedient.

We also made accounting policy elections not to apply the recognition requirements under Topic 842 to any of our short-term leases and to account for each separate lease and associated non-lease components as a single lease component for all of our leases.

2 unchanged sentences

We have a noncancelable operating lease that included certain tenant improvement allowances and is subject to base lease payments, which escalate over the term of the lease, additional charges for common area maintenance and other costs.

We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to exclude from our condensed consolidated balance sheets recognition of leases having a term of 12 months or less (short-term leases) and we elected to not separate lease components and non-lease components for our long-term leases.

We do not separate lease and non-lease components for our long-term leases.

Rent expense for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses in our condensed consolidated statements of operations.

3 unchanged sentences

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our agreement, we perform the following steps:

identification of the promised goods or services in the contract;

(ii) determination of whether the promised good s or services are performance obligations including whether they are distinct in the context of the contract;

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the pe rformance obligations;

(iv) allocation of the transaction price to the performance obligations;

and (v) recognition of revenue when (or as) we satisfy each performance obligation.

As part of the accounting for these arrangements, we must develop assumptions that require judgment to determine the stand-alone selling price for ea ch performance obligation identified in the contract.

We use key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

As part of the accounting for these arrangements, we must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified

in the contract.

We use key assumptions to determine the stand-alone sellin g price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

We recognize revenue in one of two ways, over time or at a point in time.

3 unchanged sentences

For example, if a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.

Basic and Diluted Net Income (Loss) Per Share

Basic Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents and adjusted for the weighted average number of common shares outstanding that are subject to repurchase.

Diluted Net Income (Loss) Per Share

For the three months ended March 31, 2020, we had net income available to common stockholders.

As a result, we computed diluted net income per share using the weighted average number of common shares and dilutive common equivalent shares outstanding during the period.

Dilutive common equivalent shares outstanding included 3,006 shares of restricted stock units.

For the three months ended March 31, 2020, the calculation excluded the following common equivalent shares because the effect on diluted earnings per share was anti-dilutive:

Common stock warrants

Common stock options and restricted stock units

Employee stock purchase plan

For the three months ended March 31, 2019, common stock from the following would have had an anti-dilutive effect on net loss per share (in common share equivalents):

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents and adjusted for the weighted average number of common shares outstanding that are subject to repurchase.

Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common stock equivalents outstanding for the period determined using the treasury-stock method.

Dilutive common stock equivalents are comprised of convertible preferred stock, warrants for common stock, options and restricted stock units outstanding under our stock option plan and estimated shares to be purchased under our employee stock purchase plan.

For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding, as the assumed exercise or settlement of stock options, restricted stock units, and warrants, or the conversion of preferred stock are anti-dilutive.

Potentially dilutive securities not considered for the calculation of diluted net loss per share are as follows (in common stock equivalents):

Three and Six Months Ended June 30,

Class X Preferred Stock (if-converted to common stock)

9 unchanged sentences

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes to identify, evaluate, and improve areas of GAAP for which costs and complexity can be reduced while maintaining or

improving the usefulness of the information provided to users of financial statements.

The amendments for Topic 740 simplify the accounting for income taxes by r emoving certain exceptions to the general principles in Topic 740.

2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes to identify, evaluate, and improve areas of GAAP for which costs and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements.

The amendments for Topic 740 simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

7 unchanged sentences

Investment securities are recorded at fair value.

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As such, fair v alue is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

13 unchanged sentences

for Identical

As of March 31, 2020

As of June 30, 2020

Cash equivalents

Available-for-sale investments, short-term:

Available-for-sale investments:

Asset-backed securities

1 unchanged sentence

Corporate debt securities

Total short-term investments

United States Treasury

Total available-for-sale investments

Total assets measured at fair value

5 unchanged sentences

Cash equivalents

Available-for-sale investments, short-term:

Available-for-sale investments:

Asset-backed securities

1 unchanged sentence

Corporate debt securities

Total short-term investments

Total available-for-sale investments

Total assets measured at fair value

As of March 31, 2020 and December 31, 2019, available-for-sale investments are detailed as follows (in thousands):

March 31, 2020

Available-for-sale investments, short-term:

As of June 30, 20 20 and December 31, 20 19 , available-for-sale investments are detailed as follows (in thousands):

June 30, 2020

Available-for-sale investments:

Asset-backed securities

1 unchanged sentence

Corporate debt securities

United States Treasury

December 31, 2019

Available-for-sale investments, short-term:

Available-for-sale investments:

Asset-backed securities

1 unchanged sentence

Corporate debt securities

As of March 31, 2020, all of our available-for-sale investments had a variety of effective maturity dates of less than one year.

As of March 31, 2020, four out of ten of the available-for-sale investments were in gross unrealized loss positions.

As of June 30, 2020, all of our available-for-sale investments have a variety of effective maturity dates of less than one year.

As of June 30, 2020, four out of seventeen of the available-for-sale investments are in gross unrealized loss positions.

At each reporting date, we perform an evaluation of impairment to determine if any unrealized losses are other-than-temporary.

Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, and our intent and ability to hold the investment until recovery of its amortized cost basis.

We intend, and have the ability, to hold our investments in unrealized loss positions until their amortized cost basis has been recovered.

We intend, and have the ability, to hold our investments in unrealized loss positions, if any, until their amortized cost basis has been recovered.

License and Other Agreements

2 unchanged sentences

CSL reimburses us for all research and development activities.

The research and

develop ment activities will be performed in six phases by both parties.

The research and development activities will be performed in six phases by both parties.

The first phase totaling $0.6 million was funded in May 2019 and future phases will be funded on a quarterly basis.

In June 2020, the CSL Agreement was amended to extend the work on the first phase of the research program through September 30, 2020.

As a result of the extension, CSL is obligated to provide $0.2 million of additional funding for research and development activities.

In June 2020, we recorded a receivable and related contract liability related to the amendment.

As of June 30, 2020, $0.2 million receivable is included in other receivables.

In addition, CSL will pay a total of up to $4.25 million per synthetase program ($17.0 million if all four synthetase programs advance) in option fees based on achievement of research milestones and CSL’s determination to continue development.

As of March 31, 2020, no research milestone has been met.

As of June 30, 2020, no research milestone has been met.

Moreover, aTyr will grant CSL an option to negotiate licenses for worldwide rights to each investigational new drug (IND) candidate that emerges from this research collaboration.

7 unchanged sentences

We concluded that the performance obligations are interrelated and do not have a standalone basis.

CSL has the right to terminate the research collaboration upon 45 days notice, which is considered to be the legally enforceable contract term.

Therefore, during the first phase of research services, we have a 45 day performance obligation and all research services beyond the initial 45 days performance obligation are considered a material right.

In addition, each phase of research services represents a separate customer option since CSL must provide written notice of its intent to advance to the next phase.

right to terminate the research collaboration upon 45 days notice, which is considered to be the legally enforceable contract term.

Therefore, during the first phase of research services, we have a 45 day p erformance obligation and all research services beyond the initial 45 days performance obligation are considered a material right.

In addition, each phase of research services represents a separate customer option since CSL must provide written notice of i ts intent to advance to the next phase .

Under the CSL Agreement, CSL is obligated to pay us for the costs incurred by us under the research programs.

The payment of $0.6 million for the first phase of the research program received in May 2019 was considered fixed consideration and we will recognize revenue on the payment for the research service performance obligation as the services are performed.

The payment of $0.6 million for the first phase of the research program received in May 2019 as well as the $0.2 million related to the amendment in June 2020 were considered fixed consideration and we will recognize revenue on the payment for the research service performance obligation as the services are performed.

We are utilizing a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize.

9 unchanged sentences

Accordingly, the milestones are fully constrained and we will not recognize revenue related to these amounts until we have received notification from CSL that they would like to proceed with the next phase of a research program.

For the three months ended March 31, 2020, we recognized $0.2 million as license revenue under the CSL Agreement.

For each of the three months ended June 30, 2020 and 2019, we recognized $0.1 million as license revenue under the CSL Agreement.

For the six months ended June 30, 2020 and 2019, we recognized $0.3 million and $0.1 million, respectively, as license revenue under the CSL Agreement.

Kyorin Pharmaceutical Co., Ltd.

1 unchanged sentence

(Kyorin) for the development and commercialization of ATYR1923 for interstitial lung diseases (ILDs) in Japan.

Under the collaboration and license agreement with Kyorin (Kyorin Agreement), K yorin received an exclusive right to develop and commercialize ATYR1923 in Japan for all forms of ILDs.

Under the collaboration and license agreement with Kyorin (Kyorin Agreement), Kyorin received an exclusive right to develop and commercialize ATYR1923 in Japan fo r all forms of ILDs.

We received an $8.0 million upfront payment and we are eligible to receive an additional $167.0 million in the aggregate upon achievement of certain development, regulatory and sales milestones, as well as tiered royalties ranging from the mid-single digits to mid-teens on net sales in Japan.

8 unchanged sentences

We determined that the relative stand-alone selling price was $7.9 million when the license was delivered to Kyorin in January 2020.

We determined that the relative standalone selling price for

the free clinical trial material to be provided by us to Kyorin was $0.1 million , using the “expected cost plus a margin” approach.

As of March 31, 2020, we recognized $ 7.9 mill ion as license revenue under the Kyorin Agreement.

We expect to recognize $0.1 million in revenue for the free clinical trial material upon delivery to Kyorin.

We determined that the relative standalone selling price was $0.1 million for the free clinical trial material delivered to Kyorin in June 2020, using the “expected cost plus a margin” approach.

For the three months and six months ended June 30, 2020, we recognized $0.1 million and $8.0 million as license revenue under the Kyorin Agreement.

Both the milestones and royalty payments under the Kyorin Agreement are variable consideration.

4 unchanged sentences

Hong Kong University of Science and Technology

In March 2020, our subsidiary, Pangu BioPharma, together with the Hong Kong University of Science and Technology (HKUST) was awarded a grant of approximately $750,000 to build a high-throughput platform for the development of bi-specific antibodies.

The two-year project is being funded by the Hong Kong Government’s Innovation and Technology Commission under the Partnership Research Program (PRP).

The two-year project is being funded by the Hong Kong Government’s Innovation and Technology Commi ssion (ITC) under the Partnership Research Program (PRP).

The PRP aims to support research and development projects undertaken by companies in collaboration with local universities and public research institutions.

1 unchanged sentence

The research grant agreement between Pangu BioPharma, HKUST and the Government of the Hong Kong Special Administration Region is effective April 1, 2020.

We determined that the grant with ITC falls under the contributions guidance under Subtopic 958-605, Not-for-Profit Entities-Revenue Recognition , which is outside the scope of Topic 606, as ITC is not receiving reciprocal value for its contributions.

All contributions received from the grant agreement are recorded as a contra-expense as opposed to revenue on the condensed consolidated statement of operations.

Contra-expense for the three and six months ended June 30, 2020 were immaterial.

Debt, Commitments and Contingencies

9 unchanged sentences

The material adverse change clause covers a material impairment in the perfection or priority of the Lenders’ lien in the underlying collateral or in the value of such collateral, material adverse change in business operations or condition or material impairment of our prospects for repayment of any portion of the remaining debt obligation.

As of March 31, 2020, the carrying value of our Term Loans consisted of $5.3 million principal outstanding less the debt issuance costs of $0.1 million and the accretion of the final maturity payment of $1.8 million.

As of June 30, 2020, the carrying value of our Term Loans consisted of $3.3 million principal outstanding less the debt issuance costs of $36,000 and the accretion of the final maturity payment of $1.8 million.

We intend to pay our Term Loans in full, including the final maturity payment by the fourth quarter of 2020.

2 unchanged sentences

In connection with the second tranche, we issued warrants to the Lenders to purchase an aggregate of 1,489 shares of our common stock with an exercise price of $50.37 per share.

In connection with the third tranche, we issued warrants to each of the Lenders to purchase an aggregate of 1,433 shares of our common stock with an exercise price of $51.98 per share.

In connection with the third tranche, we issued warrants to each of SVB and Solar to purchase an aggregate of 1,443 shares of our common stock with an exercise price of $51.98 per share.

The warrants are immediately exercisable and have a maximum contractual term of seven years.

1 unchanged sentence

Facility Leases

Future minimum payments under the non-cancelable facility lease and reconciliation to the operating lease liability as of March 31, 2020 were as follows (in thousands):

Future minimum payments under the non-cancelable facility lease and reconciliation to the operating lease liability as of June 30, 2020 were as follows (in thousands):

Operating Lease

3 unchanged sentences

Long-term operating lease liability

For each of the three months ended March 31, 2020 and 2019, we recorded an operating lease cost of $0.2 million.

As of March 31, 2020, the weighted-average remaining lease term was 3.2 years and the weighted-average discount rate was 9.6%.

For each of the three months ended June 30, 2020 and 2019 , we recorded an operating lease cost of $0.2 million.

For each of the six months ended June 30, 2020 and 2019, we recorded an operating lease cost of $0.

As of June 30, 2020, the weighted-average remaining lease term was 2.9 years and the weighted-aver age discount rate was 9.6%.

Stockholders’ Equity

3 unchanged sentences

Wainwright is entitled to a commission at a fixed rate equal to 3% of the gross proceeds.

During 2019, we sold an aggregate of 611,687 shares of common stock at an average price of $5.43 per common share for net proceeds of $3.0 million under the ATM Offering Program.

We did not utilize the ATM Offering Program during the three months ended March 31, 2020.

During 2019, we sold an aggregate of 611,687 shares of common stock at an average price of $5.43 per share for gross proceeds of $3.3 million under the ATM Offering Program.

During the six months ended June 30, 2020, we sold an aggregate of 23,148 shares of common stock at an average price of $4.49 per share for gross proceeds of $0.1 million under the ATM Offering Program.

Underwritten Follow-On Public Offering

4 unchanged sentences

Common stock reserved for future issuance is as follows:

March 31, 2020

June 30, 2020

Common stock warrants

Common stock options and restricted stock units

Shares available under the 2015 Plan

Shares available under the 2015 ESPP

Equity Incentive Plans

The following table summarizes our stock option activity under all equity incentive plans for the three months ended March 31, 2020:

Shares available under the 2015 equity incentive plan

Shares available under the employee stock purchase plan

The following table summarizes our stock option activity under all equity incentive plans for the six months ended June 30, 2020:

Stock Options

2 unchanged sentences

Canceled/forfeited/expired

Outstanding as of March 31, 2020

Outstanding as of June 30, 2020

The assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Expected term (in years)

2 unchanged sentences

103.3% – 109.7

97.2% – 101.0

102.2% – 109.7

97.2% – 101.0

Expected dividend yield

The following table summarizes our restricted stock unit activity under all equity incentive plans for the three months ended March 31, 2020:

The following table summarizes our restricted stock unit activity under all equity incentive plans for the six months ended June 30, 2020:

Number of Outstanding

2 unchanged sentences

Balance as of December 31, 2019

Balance as of March 31, 2020

Balance as of June 30, 2020

Stock-based Compensation

The allocation of stock-based compensation for all options, including performance options with a market condition, 2015 ESPP and restricted stock units is as follows (in thousands):

The allocation of stock-based compensation for all options, including performance options with a market condition, employee stock purchase plan and restricted stock units is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

Subsequent Events

Through August 12, 2020, we sold an aggregate of 228,194 shares of common stock at a weighted average price of $4.11 per share through our ATM Offering Program for gross proceeds of $0.9 million.

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